PROVIDENCE, R.I. (WPRI) – It’s too soon to say whether Providence residents will see a tax increase in Mayor Jorge Elorza’s next budget, but one thing is clear: property values across Rhode Island’s capital city are on the rise.
An appraiser hired by the city told the City Council Finance Committee Tuesday he expects residential property values to grow by about 10% when new assessments are unveiled next month, just in time for city officials to use as they craft a tax-and-spending plan for the fiscal year that begins July 1.
Stephen Ferreira, a project manager for Vision Government Solutions Inc., told the committee a preliminary analysis shows “there has been some consistency” in the appreciation of values across property classes and throughout the city. The city is planning to mail new assessments to property owners by the end of March.
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Rhode Island law requires cities and towns to conduct statistical property revaluations every three years and full revaluations every nine years. Providence’s last statistical revaluation came during the 2012-13 fiscal year. (Gov. Gina Raimondo has proposed changing the schedule to statistical revaluations every five years and full revaluations every 15 years.
State law also limits the amount a municipality can increase taxes in any one year at 4% of the entire levy, meaning that the city could be forced to reduce tax rates in order to remain under the cap. (Even if the rates go down, City Council President Luis Aponte has said it is likely the majority of property owners will see a tax increase next fiscal year.)
Providence’s owner-occupied rate is currently $19.25 per $1,000 of assessed value and its rental-property rate is $33.10 per $1,000. The city’s commercial tax rate is $36.75 per $1,000 and the car tax rate is $60 per $1,000 of value, with the first $1,000 exempt.
Ferreira said it was too early to discuss commercial values. City officials have held the line on the $36.75 per $1,000 rate for commercial properties since 2012.
The city’s total tax levy for the current fiscal year is $351.8 million, meaning that a maximum tax increase would generate about $14 million in new revenue.
Although the Elorza administration has said it believes it will end the current fiscal year with a balanced budget, officials have said they are projecting a $5.9-million gap in the budget that takes effect July 1. That figure can only be reduced by spending cuts or an increase in revenue.
The city is also working on a plan to eliminate its $13.4-million cumulative deficit, a shortfall that can only be reduced by running annual budget surpluses over the next several years.