News Summary
Homeowners in Providence may face a significant tax increase due to a newly passed tax levy aimed at addressing funding shortfalls in the city. Mayor Brett Smiley has indicated that about 80% of the city’s revenue comes from property taxes, and the proposed increase would primarily fund a $15 million settlement with the Rhode Island Department of Education. The average single-family homeowner could see an annual tax increase of approximately $160, depending on property values. The budget will be discussed in a public hearing, and there are available exemptions for certain residents.
Providence homeowners may face a tax increase as a result of a recently passed tax levy bill by the General Assembly that aims to address significant funding shortfalls within the city. As part of an effort to balance the city’s budget, Mayor Brett Smiley emphasized that about 80% of Providence’s revenue derives from property taxes, necessitating the tax hike.
The newly proposed tax increase is specifically aimed at funding a $15 million settlement with the Rhode Island Department of Education. This settlement arises from a five-year legal dispute concerning the adequacy of financial support provided for the troubled Providence Public Schools. Mayor Smiley has warned residents that the city must choose between raising taxes, finding new revenue sources, or making substantial budget cuts to alleviate ongoing financial pressures.
If the proposed tax adjustment is incorporated into the final budget, it is estimated that the average owner-occupied single-family homeowner in Providence could see an annual tax increase of approximately $160, translating to around $15 a month. This increase, however, will vary depending on the property’s value. Homeowners with properties valued below the city average of $500,000 would experience a smaller increase, while those owning higher-value homes would encounter a more significant hike.
Criticism of the proposed city budget has come from Majority Leader Frank Ciccone, who decried the reliance on state intervention to enhance revenue, arguing that imposing an additional tax burden on local taxpayers who are already facing challenges is unacceptable. Mayor Smiley also expressed his concerns about the timing of the tax proposal, noting that the budget is being submitted later than in previous years.
Residents can utilize a tax calculator available on the city’s website to gauge their specific potential tax increases based on their property values. Furthermore, there are relief exemptions that some residents may qualify for, including disabled individuals, veterans, and seniors aged 65 and older. However, it is important for these individuals to formally apply for such exemptions, as they are not assigned automatically.
The city council is anticipated to make adjustments to the budget prior to its final adoption, with a public hearing scheduled for June 30 at 5:30 p.m. in the city council chamber. Under the revised budget plan, single-family homeowners would face a 6% tax increase, whereas multifamily properties without owner-occupied units could see an average increase of 13%. This increase is particularly concerning for multifamily property owners who may choose to transfer the additional tax costs onto their tenants, potentially worsening the existing housing affordability crisis in the city.
In a related financial development, Mayor Smiley recently announced a new bond rating upgrade, which he attributed to the city’s prudent financial management practices. However, to implement the tax increases, the City Council must formally ratify the budget twice before it becomes effective. Due to the delay in tax bill distributions, property owners can expect their tax bills later than usual this summer, with a grace period granted for the first-quarter tax payments due on July 1.
As Providence homeowners prepare for potential tax increases, the understanding of the implications of the city budget and related financial adjustments becomes crucial for residents navigating their financial responsibilities in the coming months.
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Additional Resources
- GoLocal Prov
- Wikipedia: Providence, Rhode Island
- Boston Globe
- Google Search: Providence tax hike
- Turn to 10
- Google Scholar: Providence tax levy
- Law360
- Encyclopedia Britannica: tax levy
- Rhode Island Current
- Google News: Providence homeowners tax increase
