Legislation would give Providence OK for homestead tax exemption
PROVIDENCE - Providence representatives have introduced legislation in the House and Senate that, if passed, would enable the city to implement a graduated homestead exemption into its tax structure.
The bills, H 6232 and S 985, would give Providence the authority to apply the homestead exemption but would not require it to do so.
The homestead exemption was first proposed publicly last week by city Finance Committee Chairman John Igliozzi as an alternative to the city’s current system of flat tax rates for owner-occupied and non-owner occupied properties. The city solicitor issued an opinion stating that the graduated homestead exemption would be illegal without proper authority from the state.
Igliozzi’s proposal, which has been controversial among residents of the East Side where home values are higher on average than they are in the rest of the city, would create a flat 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.
Members of the Providence delegation who sponsored the bills said they have not formed their own opinions on whether the graduated homestead exemption is the best option for the city, but believe city leaders should have the authority to implement it if they choose.
“We’re just giving them the tool to be able to do what is best for the entire city,” said Sen. Ana Quezada, D-Providence, who introduced the Senate version of the bill along with Senators Frank Ciccone and Samuel Bell. “I’m very confident that they will do that.”
State Rep. Daniel McKiernan, D-Providence, who introduced the bill on the House side along with Representatives Anastasia Williams, Joseph Almeida, Charlene Lima and Mario Mendez, said he feels the homestead exemption is a good idea, though he would defer to city leaders to decide whether or not it should be implemented.
“I think it’s an important bill for many neighborhoods in the city of Providence,” he said. “I think Providence needs to be an attractive place for younger families to settle down and buy a house, and this is an important step in that direction.”
Igliozzi and other members of the City Council leadership have said that the graduated homestead exemption would lessen the tax burden on more economically disadvantaged areas of the city.
But residents of the East Side and the City Council members that represent them say the plan unfairly targets their neighborhoods and would cause their tax bills to go up dramatically.
Igliozzi has also said that he and other members of the Finance Committee are working to cut the mayor’s budget - a move that would lower the tax rate for everyone in the city. For every $1 million cut from the budget, Igliozzi said about 20 cents would be shaved off the tax rate.
At a Finance Committee meeting on Tuesday, City Council Majority Leader Jo-Ann Ryan suggested multiple areas of the budget to cut or reduce, including proposed salary increases and new positions, a program to purchase washing machines for city schools and funding for PVDFest and a statewide ad campaign for the city.
The City Council has until July 31 to pass the budget for the fiscal year that begins on July 1. But Elorza press secretary Victor Morente said if the budget is not passed by June 30, the city will be in a $13-million deficit by July 15, and many city services and programs will be affected.
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