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.

The Cox Providence Rhode Races were held this past Sunday. I was able to take some hand-held video at the beginning of the marathon and half-marathon. The race was sponsored by Cox, Shape-Up RI, and Harpoon.

Our COO, Libby Isaacson, placed third in her age group for the Shape Up RI half-marathon with a time of 1:54:25. (She makes a brief cameo in the video around the 39 second mark.) Joe Luca finished the Shape Up RI half-marathon with a time of 1:52:41 and Leslie Kellogg finished with a time of 1:56:06. Bethany Calitri finished the Harpoon 5k with a time of 33:24.

Here are the overall winners of each race. Scott Leslie from Rutland, MA was the male winner of the Cox Sports Marathon with a time of 2:35:45 and Jennifer Edelmann of Boston, MA was the female winner with a time of 3:01:02. For the Shape Up RI Half-Marathon, the male winner was Phil Reutlinger of Old Lyme, CT with a time of 1:12:36 and the female winner was Diana Davis of Providence, RI with a time of 1:25:59. Winners of the Harpoon 5k were Chris Magill of Cumberland, RI with a time of 16:45 and Michaela Driscoll of Coventry, RI with a time of 18:36.

Results of the 2010 race can be seen on the Rhode Races’ website. The weather was perfect at the start of the races with the temperature reaching 80 degrees later in the day. Seeing such a large turnout of runners, walkers and supporters was encouraging.

If you are still reeling from your St. Patrick’s Day celebration, take heart that it kicks off the start of the new season. Many of the winter activities are ending, such as Ice Skating at Bank of American City Center, which ends March 20. The opportunities to get out in Providence and have some fun are just starting to fill the events calendars. This Saturday is the first official day of Spring, but the weather implies it’s beginning much earlier in the week.

I discovered on RIMonthly.com‘s Social Datebook that Saturday will be Providence’s official St. Patrick’s Day Parade.  This very green parade will start at noon and will proceed east down Smith St. towards the Statehouse. They won’t tell us where it starts, but I think Patrick’s Pub has something to do with it. There will be many post parade celebrations all over town. The St. Pat’s 5k race is on the same route, so get out and encourage those energetic souls.

However, before that comes the return of Gallery Night, on Thursday, March 18, 2010. There will be a kick off party starting at 5pm at One Regency Plaza, celebrating the 14th season! Look forward to sample refreshments from local restaurants including United BBQ, Seven Stars, and Nancy’s Fancies, along with entertainment provided by Big Nazo. A Celebrity Guided Tour starts at 5:30pm with Karen Adams, an award winning anchor from Eyewitness News.

New this year at Gallery Night, you can hop on one of five art buses at Regency and visit Historic/Traditional Galleries, University East or West/Educational Galleries, International/Contemporary Galleries, Contemporary/Emerging Galleries, or Artisan Shops. The buses will depart from One Regency Plaza at 5:30pm, 6:00pm, 6:30pm, and 7:00pm. This is a great way to see the city and experience some of the talent from Rhode Island. Gallery Night will operate on March 18, April 15, May 20, June 17, July 15, August 19, September 16, October 21, and November 18 of this year.

Go spend some time outdoors in a city that thrives on the arts.

We are finally getting the statistics showing what I have been witnessing in our offices – activity in the last couple of months has been higher than the recent past.   Just this morning, Clear Capital reported that the Providence Metropolitan Area had the highest rate of growth in housing prices in the nation at 6.1% for the latest rolling quarter ending in February.

In more positive news, the Rhode Island Association of Realtors reported 395 sales in January, a 9% increase from January 2009. The median price rose 14% to $200,000, and days on the market fell 24% to 83.  Condo sales rose 28%, prices remained virtually the same, and days on the market rose 2 percent.  Multi-unit sales fell 21 percent, while price increased 21 percent and days on the market fell 36%.  While January is typically the slowest month for home sales, weather has been on our side unlike other parts of the country that have been paralyzed by record snow this season.

However, the housing market remains vulnerable with unemployment at high levels and consumer confidence lagging. When looking across the country, the housing market is flat.  We also have a long way to go to recover to the home values of 2006.  So, we are not out of the woods just yet, but clear fields are getting closer.

And if the trend is your friend, moving upward or even sideways is better than having a further contraction. Getting back to the activity level, our offices are operating at high levels in this traditionally slow time of year. Maybe it is all the rain we’ve been getting instead of snow. Hopefully, this will continue into the spring market.

Searching through Providence’s Department of Arts, Culture & Tourism’s newsletter, several interesting events are coming up in March.  As always, the city is bustling with activity. Here’s a couple that support good causes.

To start off, how would you like to be treated like the stars?  The Rhode Island International Film Festival is the only officially sanctioned host for an Academy Awards party. It is being held at the VMA on March 7 starting at 6:30pm – complete with the red carpet treatment. The cost is $55 per person, and the proceeds of this “dress to impress” event benefit the RIIFF.

If you are not into the movies, how about live theater? Perishable Theater is having a fundraiser which features internationally-acclaimed mandolinist & bandolimist Marilynn Mair performing choro, samba, bossa nova and some of Marilynn’s original Rio-inspired compositions. This is also on the 7th but starts at 5:00pm and costs $25 per person.

For more detailed information, go to the Providence Arts, Culture and Tourism site.