The Poorest Will Foot the Bill Under the Mayor’s Plan.
It is often said that budgets are about priorities. Judging from Mayor Elorza’s proposed budget, it is clear where his priorities are. For weeks, the Providence City Council’s Committee on Finance has heard from department directors asking to fund new programs and initiatives in their FY2020 budget proposals on the backs of our city’s most vulnerable. We have heard it all, new jobs, salary increases for some of the City’s highest paid employees, a flashy tourism campaign and a 33% hike in funding for PVD Fest. The Mayor’s budget, representing a $15 million increase over last year’s, reads like a Christmas wish list to be funded by the expected windfall from our recent property revaluation process.
Speaking of the property revaluation, completed in March, homeowners in Providence’s most disadvantaged neighborhoods saw their property values increase 30, 40, even 50%. For many of our most vulnerable homeowners, the Mayor’s proposed tax plan will translate into property tax hikes of up to $1,000 or more. Meanwhile, owners of the city’s most expensive homes will get a tax cut under his plan; in some cases up to $10K or more.
Presented with a budget from a self-proclaimed “progressive” Mayor that raises taxes on the city’s poorest while giving the city’s wealthiest homeowners a tax break, the City Council felt obligated to find a way to help soften the blow to our working-class families.
The model we settled on is a progressive property tax model that gives all owner-occupied homes a 40% homestead exemption on the first $350 thousand of their property’s assessed value, and a 28% exemption on the amount that exceeds that. For example, a property valued at $400,000 would receive a 40% homestead exemption on the first $350 thousand and 28% exemption on the remaining $50 thousand (This $400,000 home would pay $98 less in taxes under the Council’s plan). Under this model, homeowners who would see their taxes go up under the Mayor’s plan, will still see an increase but it wouldn’t be as drastic. Meanwhile, homeowners who would see a savings will still see a savings, but it wouldn’t be as generous. Our proposal slightly redistributes the tax burden from the city’s working class, which makes up close to 99% of all city residents, to the city’s most affluent, or the top 1%.
Mayor Elorza claims that our plan unfairly targets one community and that it’s being forced through at the “eleventh hour.” This is simply not true. Perhaps, if the mayor introduced his budget in February, like Governor Raimondo, instead of in May the Council would be afforded more than just two months to vet, amend, and pass his budget.
Instead of pitting one community against another, perhaps the Mayor should explain to taxpayers why his proposed budget calls for a $15M increase to pay for festivals, salary raises, and other non-essential expenditures by raising taxes on the residents who can least afford it.
–Sabina Matos, City Council President