Target 12 on WPRI.com

Elorza proposes no change to property tax rate, new COVID funding in FY21 budget

Providence

PROVIDENCE, R.I. (WPRI) — Providence Mayor Jorge Elorza is proposing to keep the city’s residential and commercial property tax rates steady in the upcoming budget year, while creating a new exemption — pending General Assembly approval — for small businesses that pay tangible taxes.

The budget plan for the fiscal year that starts July 1 also includes some increased spending such as $150,000 for local health centers to do COVID-19 testing, $300,000 for eviction assistance for tenants and $100,000 for professional development, according to a summary provided by the mayor’s office. It also continues funding some of Elorza’s top priorities including $20,000 for doulas, $40,000 for access to menstrual products, $350,000 for expanded Pre-K and $350,000 for after-school programming.

While the proposal basically level-funds city government from the prior year, it counts on state aid from Gov. Gina Raimondo’s original budget proposal in January, before the coronavirus pandemic’s impacts on state revenue. The General Assembly has not yet reconvened to discuss and amend the state budget, which could result in decreased aid to Providence.

“We do understand that the landscape can be changing very quickly and very radically,” Elorza told reporters in a Zoom call Tuesday evening. “We don’t know what kind of support there’s going to be for our and other municipalities from the state and federal government. We also don’t know how long it’s going to be until life gets back to normal and we start seeing the level of revenue … that we have received in previous years.”

Elorza is planning to give his annual budget address on Wednesday night via Facebook Live rather than holding the traditional public speech in the City Council chambers.

The budget was expected to be submitted to the City Council at a 5:30 meeting Tuesday night, but the meeting was abruptly canceled 20 minutes before it was set to start.

“Unfortunately, the budget articles were not made available to the public prior to our meeting,” Council President Sabina Matos said in a statement. “During these restrictive times, it’s paramount that the public be given every opportunity to scrutinize and engage with its government. To that end, I have decided to postpone the meeting and will reschedule once the budget ordinances are made available for public vetting.”

The council rescheduled a meeting for May 1 to receive the budget.

“The proposed budget was submitted to City Council in a timely manner and in accordance with the requirements detailed in the City Charter,” responded Patricia Socarras, Elorza’s press secretary. “We share a similar goal in supporting public participation, as all budgets, including the proposed FY21 budget, are accessible through our open budgets portal upon submission to the City Council for review and subject to a public process after submission.”

The mayor’s proposal calls for a $24.56 per $1,000 residential property tax rate, with a 40% homestead exemption for those who live in their homes, which remains unchanged from the current year.

The commercial rate is also proposed to stay the same at $36.50 per $1,000 in real estate value.

In a potential boost to small businesses, Elorza is proposing to partly take advantage of Gov. Gina Raimondo’s proposal to decrease the tangible tax, which is paid on the value of items inside a business. If approved by the General Assembly, Providence would not levy the tax on businesses with less than $10,000 worth of tangible property.

The rate would otherwise remain the same, at $55.80 per $1,000 in tangible property. Businesses with more than $10,000 worth of tangible property would still have to pay the tax on the full value of their property, and would not be able to exempt the first $10,000.

At $506.8 million, the city’s budget proposal — not including schools — represents a .15% increase from the current year’s budget.

Elorza’s budget does not include a total dollar figure for schools, because the state took control of the Providence Public School District in November, including its budget.

Instead, Elorza proposes appropriating $134 million for the city’s portion of school funding, a $4 million increase from last year. It is not yet clear what the total school budget will be including state funds, but last year — when the schools were still under city control — the state contributed $256 million.

Laura Hart, a spokesperson for the Providence school department, said the schools budget will be presented to the Providence School Board in late May or June. Hart said the department also looks forward to “reviewing” the budget with the City Council, though R.I. Education Commissioner Angélica Infante-Green has the final say.

Asked about the concept of appropriating millions of taxpayer dollars for the schools without yet seeing a plan for how to spend it, Elorza said the city knew it was signing up for that when leaders declined to object to the state takeover.

“It’s clear that what we do on the city side is we appropriate the amount, and then how those dollars are spent, that’s something that comes under the purview of the state,” Elorza said. “We knew that going in.”

“We have faith and confidence at this point, there’s been nothing to suggest otherwise, that they will be allocating the dollars responsibly,” he added.

The mayor’s proposal doesn’t make any planned payment to the rainy day fund, amid financial concerns because of the COVID-19 pandemic.

While some revenues are expected to decrease as the pandemic continues, the property tax levy will get a little boost by the expiration of the Manchester Street Power Station’s tax stabilization agreement, which gave the property a tax cut for two decades.

Elorza’s aides say it’s also possible the city would apply for a line of credit if cash flows decline. No specific numbers have been released for revenue shortfalls in the 4th quarter of the current fiscal year, but the Elorza administration says they’ve received 87% of property tax collection from what would normally be expected in April. (Taxes were due April 24, but the city extended a grace period to June 30 where no late fees or interest will be applied.)

Some of the specific proposals in the new budget plan — including summer learning, summer internship programs, after-school activities and more — may or may not be canceled or modified depending on public health guidance due to the pandemic.

The budget also funds a new police academy — for $1.5 million — to train and recruit around 50 new Providence police officers in the upcoming year.

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

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Providence

Download Mobile Apps from WPRI 12
DOWNLOAD APPS NOW: Apple App Store | Google Play Store
Watch 12 on 12: The Mafia Tapes - Only on WPRI.com
PINPOINT WEATHER // Quick Links:

Dan Yorke State of Mind: Dan's Daily Update

DYSOM 9/17/2020: Lt. Governor Dan McKee

More Dan Yorke State of Mind

Don't Miss

Viewer Pa on WPRI.com

LIVE CAMS on WPRI.com

More Live Cams

Community Events & Happenings

More Community

The Border Report Tour

More Border Report Tour