Providence City Council agrees to back property tax hike above state cap, but within limits
Providence City Councilors are seen on Nov. 22, 2024, at an event which saw the release of the city's comprehensive plan at the West Broadway Neighborhood Association. The terms of the city's settlement with the state's education department were released the same day and the city is currently determining how to meet the $15 million payment it needs to make. From left to right are Majority Leader Pedro Espinal, President Rachel Miller, President Pro Tempore Juan Pichardo and Councilman Oscar Vargas. (Photo by Alexander Castro/Rhode Island Current)
The Providence City Council unanimously passed a resolution Thursday night supporting the possibility of a property tax hike above the 4% state cap for the next fiscal year as the capital city looks to meet its legal obligation to its public schools under the terms of a settlement reached last fall with the state.
But the council is viewing the measure as a last-ditch maneuver and wants a ceiling to stop any possible increase from soaring too high.
'It was amended in committee,' Councilwoman Jo-Ann Ryan, the resolution's sponsor, said at Thursday's meeting, sounding hoarse. 'We had a healthy discussion. That's why I lost my voice.'
Under state law, Rhode Island municipalities may not raise property taxes by more than 4% in any given year, forcing towns and cities to seek approval from the General Assembly for any increases beyond that threshold. Middletown, New Shoreham and Warren all applied for and were granted cap exemptions for fiscal year 2025. Both New Shoreham and Middletown saw tax cap increases of over 9%, while Warren was allowed to raise its tax cap by a little over 5%.
Providence's resolution was shaped by the City Council's Committee on Finance during its March 13 meeting, and it would specify a maximum 8% raise if enacted.
'Some people were uncomfortable with no cap on that,' Ryan said.
A bill introduced Feb. 7 by Rep. Scott Slater, a Providence Democrat, seeks to authorize the city of Providence to increase the levy beyond the 4% cap, but it did not specify any limit to the increase — a point of contention at the council's Finance Committee meeting, which influenced Ryan's resolution.
Slater's bill was slated for a House committee hearing on March 3, but was postponed and has not been rescheduled since.
Slater is collaborating with city officials to iron out some changes in the language, House spokesperson Larry Berman said via email Friday afternoon.
Slater did not immediately respond to a request for comment Friday.
The omen of an atypically higher tax increase is a sour reminder of the legal battle between the Rhode Island Department of Education (RIDE) and the city that ended in November with a settlement in which the city must pay $15 million to cover deficits in the school department's budget for fiscal years 2024 and 2025. The city must budget additional money through fiscal year 2027, per an arrangement molded by the Crowley Act — the same statute that gave RIDE control of the city's underperforming schools in 2019.
'I think it's good that we are paying the students of our city the money that they deserve because of past actions,' Councilor Miguel Sanchez said in the council chamber. 'We can't change that. We've got to deal with the reality that's before us.'
Multiple stakeholders in the city, including city councilors and Providence Mayor Brett Smiley, have voiced their desire to see the schools return to local control by June. RIDE has proposed but not committed to a timeline of 2026 instead, one year shorter than a takeover extension approved last year. A return to local control, however, would not nullify the $15 million debt the city owes its schools, RIDE Commissioner Angélica Infante-Green noted in February.
'What I want to be very clear on is that this is not an 8% tax increase on our residents,' Sanchez said. 'This is something that is allowing our state legislature to approve a resolution on behalf of the mayor's office, and now going to be on behalf of us, to have a little bit more flexibility going into budget season.'
Sanchez underscored that, even if the hike is approved, the council's 15 members will need to work together to avoid enacting too high an increase.
'We are going to be seeking other sources of revenue in order to balance this thing out,' Majority Leader Pedro Espinal said of the upcoming budget, usually released by the mayor in April. 'This to me today, this is just an additional step as we look for solutions to balance our budget.'
Councilwoman Althea Graves co-sponsored the resolution but did so with some reticence.
'The people in the city know that we too are going through the same thing that they are. We live here in this city, our tax rate is going to go up just like everybody else's,' Graves said, adding that she was not too keen on even the 4% levy. She added she didn't want to see rec centers closed, community programming cut, or garbage picked up biweekly.
'Those are some of the dire things that could happen if we don't go down this road,' Graves said. 'So sometimes we have to decide what is best in the long run.'
In her comments on the council floor Thursday, Ryan painted the wider context of the city's budget troubles.
'Every time you read the paper, there's another unknown coming out of Washington. It's chaos in Washington,' she said. 'Funding for so many programs are being cut. That is going to impact our budget, that is going to impact the people of providence that we are committed to serve. So there's a lot at play here, and I know I've spoken with just about every one of you that we're all committed to doing the hard work that's necessary to come out with a balanced budget that eases the pain on the residents of the city.'
The mayor's budget is expected to land in April, and needs to be approved by the council. Ryan reaffirmed to her colleagues that 'the mayor does not have a blank check' and that the important work of finalizing the budget rests with them.
'So it is our charge now to move forward knowing what we know, doing the hard work, asking the difficult questions, to vet the budget and to come up with a fair budget that that is workable and isn't obsessive and oppressive for the lowest members of our community, for everyone, quite frankly,' she said.
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