R.I. cities and towns lose tax-relief battle

PBN Staff

06/25/2007

STATE HOUSE – The Rhode Island League of Cities and Towns has lost its battle for a property-tax relief measure that would have allowed cities and towns to levy new fees.
The mayors of Johnston, North Providence, Pawtucket, Providence and Warwick, the the town manager of East Greenwich and the town administrators of North Smithfield and West Warwick all had gathered in the State House Rotunda on Wednesday to lobby on behalf of the measure.
But their bill was defeated early Saturday. “That’s when they finally banged the gavel,” said Daniel L. Beardsley Jr., the league’s executive director.
“The House had defeated a series of proposals to increase education aid” in the preceding days and hours, he recalled in a telephone interview with Providence Business News. Then, after a long hot night and a “contentious debate,” he said, “the House leadership withdrew the municipal aid package.”
“I think it went down for a lot of reasons,” Beardsley said. He cited as a major factor the widespread perception of the bill as a Providence bail-out measure.
“Notwithstanding the fact that many of these bills would have benefited communities across the state … they believed this was legislation benefiting the City of Providence. … It was a backlash.”
In fact, Beardsley said, the tax-relief bill was enabling legislation that would have given the same benefits to any city or town that decided to adopt them.
In a statement after Wednesday’s rally, the league said the tax-relief bill would allow communities to charge fees to private firms and tax-exempt institutions for maintaining private alarm equipment; to raise their fees for real estate transactions; to levy fees that would “more broadly and fairly” distribute the cost of fire-hydrant rental, rather than relying on taxes from which nonprofit users are exempt; and to charge cable companies “a modest fee for their use of public right-of-way,” as 48 states already do.
“Obviously, everyone knew from the get-go that it was going to be a difficult year at best,” Beardsley said. But the tax-relief measure’s defeat “leaves the communities with the mandate of 2006 (S 3050) to [limit] the property tax levies … but without the tools to do so.”
The League of Cities and Towns supported the law, which limits property-tax increases to 5.5 percent in fiscal 2007, 5.25 percent in fiscal 2008 and so on, lowering the ceiling by 0.25 percent per year until it reaches a limit of 4 percent in fiscal 2013, Beardsley said.
The message at the time was that, “while local officials would like to lower their tax rates, they need certain tools,” he said, adding: “You can do with less if you have the tools in place to manage lower revenue, but without those tools, it’s going to become impossible.”
Beardsley foresees “the perfect fiscal storm.”
“We’ve got the front created by 3050, the front created by municipal CEOs trying to balance the budget without the tools to balance that budget, and the third front, … outcries by the citizenry … Understandably, they want lower taxes. But they also want to keep or expand …municipal services,” he said.
“I don’t feel good about the outcome.”

Additional information is available at www.rilin.state.ri.us and www.rileague.org. A statement regarding the league’s Wednesday rally can be viewed at .

PBN Branded Content