Providence residential property taxes may increase 25 percent

01:00 AM EDT on Tuesday, July 27, 2010

By Philip Marcelo

Journal Staff Writer

PROVIDENCE — The City Council on Monday issued preliminary approval to a 25-percent increase in residential property taxes and the elimination of a tax break for absentee landlords, despite a warning from Mayor David N. Cicilline that he would veto the proposal if it’s given final passage later this week.

More than 125 property owners packed the council chambers to show their opposition to the proposals, which were part of a proposed tax levy of $284 million to $307 million for the fiscal year that began July 1.

The tax levy is the amount that the city will raise from property taxes; the council has said it will take up the spending portion of the budget after its August recess.

At issue is the proposed elimination of a tax break that allows non-owner-occupied multifamily homes of less than five units to exempt 33 percent of the assessed value from taxes.

Opponents say the plan would devastate landlords that have already lowered rents to combat high vacancy rates and to keep up with maintenance on aging houses.

“We don’t know where this money is supposed to come from,” said Kerrie Doyle, president of Doyle Real Estate. “The profit margins are not as high as people assume.”

Even with the tax-rate increase and the loss of the exemption, Councilman John J. Igliozzi, chairman of the council’s Finance Committee, argued that more than 75 percent of property owners in the city will see lower tax bills because of this year’s property revaluation, which saw residential-property values decline by an average of about 30 percent.

He said that, generally, East Side landlords would bear the brunt of this year’s tax increase.

Council Majority Leader Terrence M. Hassett added that the council must approve the tax levy or it will not legally have the ability to raise the revenue needed to run city government in the current fiscal year.

Under the council’s proposed tax levy, the tax rates would increase to $30.38 per $1,000 of assessed value for residences and $33.70 per $1,000 for commercial properties.