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Providence panel backs partial break for landlords

Providence Journal

01:00 AM EST on Wednesday, January 19, 2011

 

By Alisha A. Pina

Journal Staff Writer

PROVIDENCE — A 15-percent tax abatement for many homeowners who do not live in the houses they own was approved by the City Council’s finance committee Tuesday night.

The committee also strengthened language for the tax-assessment and tax-collection processes to verify those who deserve tax breaks.

Committee Chairman John Igliozzi said the changes, in particular, would prohibit banks from getting exemptions for foreclosed homes they own, as well as ensure the correct discount is given to residents who live in their homes, but have a trust fund listed as the owner for legal reasons.

The full council plans to vote on the amendments in a special meeting Thursday night at City Hall. It will start after the council’s regular 7 p.m. meeting concludes.

“I think it’s terrible that banks were getting the homestead exemption,” said Councilor Kevin Jackson, who is not on the finance committee, but was at the meeting. Igliozzi and Councilors Michael A. Solomon, Terrence M. Hassett, Samuel Zurier and David A. Salvatore serve on the committee.

Jackson and other council members say they believe more changes have to occur.

Landlords with properties of five units or less — about 12,000 of the city’s more than 44,000 residences — previously received a 33-percent tax break, but the council eliminated the discount in August 2010 to plug a still-growing budget deficit.

The 15-percent abatement would get would only be applied to this year. Jackson has another proposal currently being considered by the finance committee that would incrementally restore the discount back to 33 percent.

It was not on the committee’s agenda Tuesday, but Hassett — who was not at Tuesday’s meeting — previously said that he and others didn’t intend to fully restore the exemption. Landlords say completely eliminating the discount would lead to higher rents and additional foreclosures, but it gave the cash-strapped city $20 million more in new revenue.

The pending 15-percent abatement would reduce those revenues by about $9.6 million.

New council members Zurier and Sabina Matos also said people who purchase a house in Providence should be able to immediately receive the exemption if they are eligible. The current ordinance delays eligibility for a year.

Igliozzi directed the law department to begin drafting a tax levy ordinance for the next fiscal year, which begins July 1, that would allow eligible homebuyers to benefit from the city’s exemptions upon purchase.

In other news, the committee unanimously supported Mayor Angel Taveras’ decision to hire former state police Col. Steven M. Pare as public safety commissioner, a position that has been vacant for eight years.

The administration is proposing a $150,000-salary for Pare, said Melissa Withers, Taveras’ director of communications. The last commissioner was paid $94,308.

The full council plans to also vote on Pare’s appointment at the special meeting Thursday.

apina@projo.com

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