POLITICS

Angry East Siders confront Providence City Councilors over homestead exemption

Madeleine List
mlist@providencejournal.com
Providence City Councilman John J. Igliozzi walks through the center aisle of a room full of angry East Siders as explains the Providence City Council proposal to bring back the homestead exemption. [The Providence Journal / Kris Craig]

PROVIDENCE — About 120 East Side residents crowded into the Central Congregational Church on Monday night to express their frustration over a City Council proposal to implement a graduated homestead exemption tax structure in Providence.

During a meeting punctuated by shouts and interruptions, residents voiced their concern to City Council members in attendance about a proposal they say would raise their tax bills.

“It hurts downtown, it hurts Fox Point, it hurts all of the East Side,” said Sharon Steele, acting president of the Jewelry District Association. “This whole idea of pitting one neighborhood against another neighborhood is a very bad idea.”

The proposal, brought forward by Finance Committee Chairman John Igliozzi, is to create a tax rate of $24.56 per $1,000 of value and give homeowners who live in their homes a 40% exemption on the first $350,000 of a home’s value, and a 28% exemption on assessed value above $350,000. This would replace the flat tax rates proposed by the mayor of $15.35 per $1,000 of valuation for owner-occupied homes and $24.56 per $1,000 for non-owner-occupied homes.

The homestead exemption, according to Igliozzi, would help mitigate some of the impact to low-income areas of the city where homeowners are facing proportionally large increases to their tax bills based on a recent property revaluation.

But residents of the East Side, where homes are more expensive, said their properties also increased dramatically in value during the revaluation and the graduated homestead exemption would cause their tax bills to spike even higher.

“We’re creating a nightmare in order to alleviate a bad dream,” said Bruce Shaw, 67, who has lived on the East Side for 40 years.

Brett Smiley, who is Gov. Gina Raimondo's chief of staff, said at the meeting that Providence did away with the homestead exemption during former mayor Angel Taveras's administration because a flat tax rate is simpler and makes it easier for prospective home buyers to compare with tax rates in other cities and towns. A better approach to the issue of rising taxes would be to increase the city's tax base.

"The solution to the city's fiscal problems is not a group of people paying more but more people paying less," he said.

The median price of a home on the East Side this April was $727,500, compared with $570,000 for all of 2018, according to Housing Works at Roger Williams University. The median price of a home in the rest of the city, without the East Side, in April was $196,000, compared with $168,000 in 2018.

Shaw suggested that the city place a cap on property value increases to avoid such inflated numbers in the future.

“Nobody, I think, should have to face the reality of, 'Wow my house just got revalued, I have to move now to be able to afford next year’s taxes,'” he said.

Members of City Council leadership who support the homestead exemption proposal say the structure will cause tax bills to be lower for most city residents when compared with the mayor’s proposal.

With the graduated homestead exemption, those who own homes are valued at up to $500,000 would have tax bills that were on average $113 or $213 lower than they would be under the mayor’s proposal, according to numbers sent by City Council spokesman Billy Kepner. About 89% of owner-occupied properties, or 18,567 homes, fall within that price range.

Owners of properties valued between $500,000 and $750,000 would pay on average $370 more than they would under the mayor’s proposal. Owners of those valued between $75,001 and $1 million would pay an average of $966 more. About 9% of homes in the city, or about 1,948 properties, fall in the $500,000-to-$1-million range.

Homes worth more than $1 million, which make up 1% of properties, or 348 homes, would pay on average $2,204 more under the homestead exemption structure compared with the mayor's plan.

“The bottom line is, I have a moral and ethical obligation to help the people who have the biggest economic challenge, no matter where they are in the city,” Igliozzi said.

Residents and City Council members representing the East Side said they were also disappointed with the way council leadership handled the rollout of the proposal.

“We shouldn’t be discussing a change in our tax structure two weeks before we should be putting the bills out,” said Ward 2 City Councilwoman Helen Anthony.

mlist@providencejournal.com

(401) 277-7121

On Twitter: @madeleine_list