Providence City Council taps study commission to mull ‘alternative revenue streams’

THE PROVIDENCE CITY COUNCIL on Thursday appointed a study commission to explore new the city's tax system and make recommendations for potential changes./PBN SCREENSHOT

PROVIDENCE – The City Council on Thursday unanimously approved a nine–member commission to study the municipal tax system and make recommendations on ways to soften the impact of rising costs to residents. 

The commission is expected to wrap up its work before the end of the calendar year, with council action at its first meeting in January.

According to the resolution, introduced by City Council President Rachel Miller, the advisory body will “Consider alternative revenue streams that diversify city revenue to reduce the burden on property owners,” before issuing a report with recommendations to the council within 120 days. 

The resolution goes on to say that “a robust review of national best practices… is necessary to develop a more equitable and fair tax structure for the people of Providence.”

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Appointed were council members Jo-Ann Ryan, Sue AnderBois, and Pedro Espinal; CEO and President of the R.I. Public Expenditure Council, Micheal DiBiase; Providence Chief Financial Officer, Lawrence Mancini; Brown University researcher Tom Sgouros; former executive of the nonprofit West Elmwood Housing Development Corp., Sharon Conard-Wells; local realtor Jane Driver; and real estate attorney with Adler Pollock and Sheehan, Robert I. Stolzman. 

In addition to studying the city’s tax and levy structure and current rates for commercial and residential properties, the commission is also charged with conducting a review of exemptions, state tax enabling law, and the citywide property revaluation process. 

In a statement, Ryan said Thursday the commission may seek legislative changes from the General Assembly when it begins the 2024 session sometime in January. 

In a Thursday statement, Miller said the commission “will hear from the community, review our tax and revenue structure…with the goal of making Providence’s tax burden more equitable across all our neighborhoods.” 

The city’s fiscal 2024 budget increased residential property taxes to $18.35 per $1,000 of assessed value, a 55-cent increase, and cuts the levy on commercial properties from $35.40 to $35.10 per $1,000 of assessed value. It also cut the owner-occupied tax exemption by 11%.  

“We are looking forward to collaborating with the City Council on this incredibly important work,” said Mayor Brett P. Smiley in a statement after the vote. “We are glad the council has initiated this commission to ensure we have a balanced tax strategy that supports the long-term growth of the city.” 

During the meeting, Ryan said an important part of the commission’s task will be identifying new, as-yet-undefined revenue streams.

“Quite frankly, we can’t continue to rely on property taxes to float our budget…we have to come up with a fiscally prudent mechanism for charging taxes,” she said. “Anytime we want to increase services we have to look for tax revenue. So, we have to make some changes.” 

The commissions’ appointment comes amid the city’s effort to restructure annual contributions from large nonprofits like universities and hospitals. On Thursday the council formally received  proposals to significantly increase so-called payment in lieu of taxes agreements with Brown University, Johnson & Whales, RISD, and Providence College, which if approved would net the city $$223.4 million over 20 years.

Those proposals now head to the finance committee, which is scheduled to hold a public hearing on Sept. 26 and may vote on Sept. 28, according to a city press release. 

Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com 

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