Providence residents frustrated over residential tax hike. How the city is responding
Providence residents frustrated over potential residential property tax hikes in Mayor Brett Smiley's first budget spoke out against the proposal on Tuesday night in a lively hearing.
The public hearing is one of two the City Council's Finance Committee will hold, signaling broader engagement and greater transparency than under the previous administration.
Locals took advantage of that, queuing up for nearly two hours of testimony – most of it a reflection of outrage and exhaustion over the cost of living for those just trying to get by.
"As a born and raised resident of Providence who is the daughter of a tenant, I am also a young person who plans to go to college in September of 2024," said Rachel Santos. "If we’re to have this potential increase in homeowners’ tax, that could result in my mother’s rent going up, and that could make college very unaffordable for me. And that could be the fate of many other students here in Providence as well."
More: Breaking down Mayor Smiley's first Providence budget: Tax hikes, city spending and more
Diverse residents concerned tax hike will undermine their gains
Santos had something in common with several others who spoke that night – she is part of the city's diverse community, some of whom are marking a lot of firsts. For some, it may be shouldering the financial burden of higher education. For others, it may be climbing the mountain to homeownership and generational wealth.
Smiley's tax proposal – which cuts the commercial property tax rate by 3.8% and raises the residential rate by a history-making 4.8% – threatens to undermine those hard-fought achievements, critics say.
Nancy Xiong, a first-generation college student who hails from a family of Hmong genocide survivors, described herself as reliant on her father's disability insurance and her mother's income from a low-paying job. As Xiong put it, "the odds are already stacked against me"
More: Can you buy a home in RI? What inventory and interest rates mean for homebuyers this spring.
"This budget proposal for a residential tax increase makes it harder for us to survive," she said. "In addition, as a first-generation college student, this budget proposal creates more barriers for me to break the cycle of poverty within my family."
Karla Vigil, who immigrated to the U.S. from El Salvador and recently bought a home in Elmhurst, is also uneasy.
"I just made it in life," Vigil said. "And now I have a tax increase – more financial burden for me and my family."
A tough question: How does Providence create a balanced budget?
Michael DiBiase, president and CEO of the Rhode Island Public Expenditure Council, appeared to defend Smiley's budget.
DiBiase said former Mayor Jorge Elorza's budget for the current fiscal year "resulted in a much more unbalanced tax system."
That budget cut the residential rate by more than 25%, but because of the city's revaluation of property, homeowners still saw themselves paying more as home values skyrocketed.
And still, there is an imbalance. While Providence is by far the state's most populous city, its residents don't pay the most taxes. It currently has the eighth-lowest property tax rate in the state. Smiley's changes would push it back only a few spots to eleventh place.
"Providence is heavily dependent on the rest of the taxpayers in the state of Rhode Island to fund its services, particularly schools," DiBiase said. He added that it makes it tougher to push for more education funding when residents aren't paying as much compared with other parts of the state.
'Truly a modest proposal' to make Providence run its best, city says
As residents fight a tax increase, Chief Operating Officer Courtney Hawkins noted that the budget contains a placeholder of $7.1 million for local payments in lieu of taxes as the city continues negotiating with Brown University and other local schools. That's the same amount the city received for the current fiscal year.
Overall, Hawkins called the budget a "truly a modest proposal that we believe puts us on the path to being the best-run city in America" – a catchphrase Smiley used as part of his campaign to promise locals better services and a better city.
“Our goal with this budget is to rebalance our tax structure and move away from our reliance on federal funding," Hawkins said. "Given the increasing likelihood of a recession, it’s critical that we build a budget with a strong foundation to get us through the next few years. We have been plugging a deficit with federal dollars and that can’t continue.”
This article originally appeared on The Providence Journal: Providence residents frustrated over residential tax hike in budget
