PROVIDENCE, R.I. (WPRI) – Residents of Providence’s East Side neighborhoods expressed grave concerns at a community meeting Monday night about a proposal by Providence City Council leadership to change tax policy in the city.
The meeting at Central Congregational Church was called in reaction to an announcement last week that council leaders were considering moving to a single tax rate and bringing back the homestead exemption, but implementing it in a graduated system that would tax higher-valued homes differently.
People who stood and spoke at the meeting described the plan — put forward by Council Finance Chairman John Igliozzi — as “scattershot at best,” a “nightmare,” and a “very bad idea.”
“I actually make out financially under Councilman Igliozzi’s plan,” said Steven Cahill, who said he just bought a home in Mount Hope. “But I’m still against it.” He said the proposal has pitted wards against each other and “has politics written all over it.”
Igliozzi’s proposal, which has the backing of Council President Sabina Matos, would set one fixed residential property tax rate of $24.56 per $1,000. For those who live in their homes, it would apply a 40% homestead exemption to home values less than $350,000. Homes valued above $350,000 would get a 28% exemption.
Mayor Jorge Elorza’s competing proposal would keep the current system of two different rates, with a $24.56 rate for non-owner occupied homes and a $15.35 rate for owner-occupied homes.
The council’s finance team says 86% of Providence homeowners will have a lower tax bill under Igliozzi’s plan than Elorza’s, though most will still get a tax increase from last year.
Igliozzi announced his alternate plan at a last-minute early morning news conference last week. He and Matos have argued it provides a fairer approach to the tax hike caused in part by the revaluation that took place earlier this year, since many lower-income neighborhoods saw huge home value spikes.
Whether a homeowner gets a tax cut or an increase under the plan depends on their home value, how much it went up during the revaluation, and whether it exceeds the $350,000 threshold in the graduated exemption plan. Some of the more valuable homes in the city are on the East Side.
Residents decried the process, protesting that a proposal to upend the way the city taxes its residents was revealed just weeks before tax bills are typically sent out. The new fiscal year begins July 1.
“You guys can’t handle it,” said Aronda Kirby, who lives in the Wayland neighborhood. “None of us can handle it two and a half weeks before the budget is to be signed.”
“Get your [expletive] together and come back to us next year with a good plan,” Kirby added.
“I think there’s pretty clear consensus that rushing into this is absolute folly,” said Peter Avonti of Fox Point. “There seems to be a consensus that transparency and simplicity in the tax code is valued.”
A man who declined to provide his name also stood to speak, telling the council members at the front of the room that his tax bill would increase by $10,000 under Igliozzi’s plan.
“I’m retired,” the man said. “It doesn’t matter how much money someone has or doesn’t have. It’s the surprise of this.”
“Responsible communities do not slip a proposal out under the cover of darkness,” said Jim DeRentis, a prominent real estate agent and husband of Gov. Gina Raimondo’s chief of staff, Brett Smiley. The couple lives in Ward 2 on the East Side.
Smiley also weighed in: “The solution to the city’s fiscal problems is not a group of people paying more, but more people paying less,” he said.
A lobbying campaign has already begun over the tax proposal. DeRentis’s firm, Residential Properties, has hired former Raimondo spokesperson Mike Raia to make the public case against it. Meanwhile the council’s new lobbyist, Peter Baptista, is working to marshal support for it at the State House.
East Side Councilors Nirva LaFortune, Seth Yurdin and Helen Anthony, all of whom have criticized the plan, sat at the front of the room during Monday night’s meeting. Igliozzi sat next to them, often standing to defend it.
“I take offense to this ‘last-second’ stuff,” Igliozzi said. “We’ve been meeting for more than a month, downtown, in public.”
Anthony, who represents Ward 2 and is on the Finance Committee, said the meetings have been all been about the mayor’s proposal, not Igliozzi’s.
“It was announced at the press conference last week but we have not been talking about it,” Anthony said.
At one point, Yurdin stood and began reciting numbers from Igliozzi’s tax bill, apparently mimicking a strategy Igliozzi has been using to illustrate the tax increases residents of the West End and Silver Lake would receive under Elorza’s plan.
Igliozzi argued Elorza had provided an “untenable” budget proposal, and suggested that cuts could be made to spending in order to solve the tax problem.
“Anyone got budget cut suggestions?” he asked the crowd.
Elorza proposed $15 million more in revenue, including $12.2 million in increased property taxes. State law bars municipalities from raising taxes citywide by more than 4% in one year.
Matos lamented the fact that the mayor’s budget is presented in late April, barely two months before the start of the new fiscal year.
“I wish we had a process where the City Council sits down with the mayor to develop the budget before he drops the budget on us,” Matos said.
Councilman David Salvatore, who represents Ward 14, called out from the back of the room to ask Matos if she would put the proposal on hold rather than “ram it through.”
She replied by suggesting they support a charter change so the mayor has to give the council the budget proposal at the beginning of the year.
In an interview after the meeting, Igliozzi said he was willing to look at other options than the graduated exemption plan.
“No one wants higher taxes,” Igliozzi said. “It further seems to support the idea that we should cut the budget first.” He said one option could be to apply a single homestead exemption rate “to help out all homeowners across the city,” no matter the home value.
He did not back off the graduated plan, though, saying it needs to be “fleshed out” and further discussed.
He also asserted that the council could delay passage of the budget until the end of July.
Providence got rid of the homestead exemption in 2013 during Mayor Angel Taveras’ administration as a way to simplify the tax structure. The city’s law department says Igliozzi’s plan to return to the homestead model would require General Assembly action, and could still be unconstitutional because of the graduated rate.