When is the best time to raise taxes?

Doing so at the start of a recovery from a painful and long recession would not get my vote as an appropriate junction.  And raising rates at a number nearing 90% (almost doubling) is a stifling policy even in good times. But the bigger question is: what will it mean to the constituents of a city that has seen more properties going into foreclosure and businesses closing or leaving?

Providence’s city council is considering making the economic experiment now. The Finance Committee is proposing a residential property tax rate increase from $24.21 per $1,000 of assessed value to $30.38. And at the same time, they are proposing to take away a decade old exemption for some property owners who provide housing to the rental segment of the population. In the first case, all residential owners of property will see the rate increase by 25.5% from the previous level. That is going to have an impact on home owners, especially people suffering from financial hardship over the last couple of years.

In addition, the Council will vote on July 26th to repeal a homestead exemption for non-owner occupied rental properties of 1 – 5 units.  If approved, this will result in an 88% increase in the property tax rate for owners of these properties. How does this happen?  The rate is currently discounted by 33% for these owners. That would effectively make the current rate $16.14 per Thousand Dollars of assessed value on the home. Taking away the exemption raises the rate from that $16.14 to $30.38 per thousand – or 88% increase.

Commercial Property owners are not exempt from rate inflation either. They will see their rates go from $28.60 to $33.70 or 17.8%.

These are not the best policy decisions during the time of a fledgling recovery, but add it to a state economic environment, which is considered 49th in the nation for business friendliness, and you run the risk of pushing people to the brink of relocation. Our housing market does not need more foreclosures or failures.

The response from the council’s Finance Committee Chair, John Igliozzi, to the concerns of the non-owner occupied multi-family landlords echoes this unfriendliness with his comment in the Providence Journal – “They are business people, and they will probably not make as much profit as they are used to, and they are unhappy.”  First of all, not all landlords are making money right now, and even those who are making money are not in the service business to lose money. On last check, this is a free-market economy and profit is a good thing for tax revenue. However, the glaring miscalculation is who pays for the tax hike. Renters do. So again, the tax burden will go onto the people who are probably in the worst position to absorb it.

I encourage you to ask our city council to rethink this proposed rate structure and exemptions. Call your rep today. Numbers are found at providenceri.com.

Oh, and for the argument that values have decreased, there are some out there who have actually seen an increase in their property values. No one can figure that out, but it is happening.

As I posted in the past, we hold a seasonal photo contest. It’s a great opportunity for our agents and staff to grab their cameras and unleash some creativity! The winning photos are added to the slide show on our home page.

We get more and more submissions each season. It’s always a difficult decision choosing the winning photographs and this summer was no exception.

This years winning photo is of the Pomham Lighthouse in East Providence and was shot by Laurie Fletcher from our Barrington Office. Congratulations Laurie!

Check out the slide show of all the selected photos!

Rhode Island may be a small state, but we certainly have a lot of history. Since 2000, the National Trust for Historic Preservation has published its Dozen Distinctive Destinations and RI has had four locations cited – Westerly, Newport, Providence and Bristol. Some states have never had an entry. And there are those who wonder why we like to live here.

The program recognizes cities and towns that offer an authentic visitor experience by combining dynamic downtowns, cultural diversity, attractive architecture, cultural landscapes and a strong commitment to historic preservation, sustainability and revitalization. In each community, residents have joined together and taken action to protect their town’s character.

Our latest entry, Bristol, was described as “a quintessential New England waterfront town.” And they later stated “[w]ith its unwavering commitment to preservation, Bristol continues to maintain the picture-perfect charm of a historic port town.”

But then again, we knew that. Bristol is a great location for art boutiques, museums, cafes, parks, and a fantastic tree lined main street. The character of the town has continually grown from its beginnings in 1680 as part of the Plymouth Colony and then as a town in Massachusetts, and finally becoming a town in RI in 1747. Sitting near the top of Narragansett Bay, the town folks have always held a love for the sea and that seaport tradition continues today, albeit, slightly more recreational.

[Editors note - July 8, 2010]:

I just heard this morning on the radio and read on EastbayRI.com that Family Circle magazine gave Bristol a rank in the top 10 towns to live in 2010.