Controversial Providence tax plan is off the table for this year

Providence

PROVIDENCE, R.I. (WPRI) — A tax plan that would have billed homeowners differently depending on their home values in Providence is off the table for this year, though city leaders plan to try again next year.

Rhode Island House leadership made the final call, declining to take up enabling legislation this session because it was too late to vet the proposal. The General Assembly is set to adjourn for the year on Friday.

“Along with many of my neighbors and constituents, I could not support the proposed two-tiered residential tax plan,” said Rep. Chris Blazejewski, D-Providence, who is a member of Speaker Nicholas Mattiello’s leadership team. “The proposal sought major last-minute changes to Providence’s tax structure without sufficient public input and professional analysis, and unfortunately set neighborhoods against one another.”

The Senate approved the measure Tuesday night. It would have allowed the city to bring back the homestead exemption in a graduated way, giving home values below $350,000 a larger tax exemption than more expensive homes.

It’s a different tax structure than the current one in Providence, which sets one rate for owner occupied homes and a higher rate for non-owner occupied homes.

Finance Chairman John Igliozzi, the champion of the graduated homestead plan, said he would regroup and re-introduce the plan next year. The city’s legal team said enabling legislation was required to implement his plan.

In the meantime, with the July 1 start of the fiscal year looming, Igliozzi said his committee would “cut the budget” and come up with a tax rate and a uniform homestead exemption.

A proposal with numbers has not yet been put forward by the council. Democratic Mayor Jorge Elorza proposed two tax rates in April that the council has been considering: $15.35 per $1,000 for owner occupied and $24.56 per $1,000 for non-owner occupied.

Igliozzi’s proposal, which was supported by Council President Sabina Matos, would have used just the $24.56 rate but with a 40% homestead exemption for people who live in their homes valued up to $350,000, and a 28% exemption above that.

The plan had residents of the East Side, where there are many higher-value homes, worried about their tax bills. Some decried the process, arguing there was not enough time to study a significant change in tax policy before the budget was due.

News that the House wouldn’t consider the enabling legislation began to spread before the Senate even took up the bill Tuesday.

“For some reason the House decides they’re not going to hear the bill,” said Sen. Frank Ciccone, D-Providence, on the Senate floor. “I wonder what agreements were made there with the mayor.”

He dismissed concerns from Elorza that the city needed an agreement on a tax-and-spending plan soon, or the city will run out of money.

“It won’t be the first time Providence had its tax bills come out late,” Ciccone said.

The Senate vote was 33-2. Senators Gayle Goldin and Josh Miller, Democrats who each represent parts of Providence, voted against the bill.

“We’re encouraged that the House agrees this proposal needs more time and consideration,” said Emily Crowell, Elorza’s communications director. “We will continue to work with the City Council to finalize a budget that works for all residents and neighborhoods.”

The council’s Finance Committee is scheduled to meet Wednesday night at 5 p.m.

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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