With the city facing a major budget shortfall, Providence Mayor Brett Smiley in April proposed a 7.5% property tax increase for the upcoming fiscal year. State law prohibits municipalities from imposing a tax hike over 4%, so the mayor’s proposal must be approved by the General Assembly.
Providence state Sen. Tiara Mack is strongly opposed to the tax increase, saying it would hurt residents who are struggling to pay their rent and mortgages. She says the Smiley administration needs to consider how to generate more revenue, and has suggested ideas like a vacancy tax, a land value tax, or a city income tax. She’s also recommending higher taxation on hospitals, private universities, and businesses that operate along the Port of Providence.
Interview highlights
On her opposition to a 7.5% property tax increase in Providence
Tiara Mack: A decision to raise property taxes is not one that I think anyone takes lightly, including our City Council and the mayor. But I think there also are several other ways that we can generate revenue that haven’t been explored yet that I would’ve liked to have seen both the city and the City Council really engage in.
People are already cost burdened. I, myself, am a renter and my rent has gone up at least $100 every year. I think all the mayor’s numbers say that the average resident will have about a $13 per month increase. [That] just isn’t the reality that I’m seeing as someone who just got my lease renewal back and my lease is proposed to increase by $125. So I think there’s a real human impact that we have to think about and we have to make sure we’ve exhausted every single option before resorting to burdening renters and burdening residents in Providence.
On the need to tax hospitals, private universities, and Port companies
We have tons of PILOT [payment in lieu of taxes] agreements, including between all of the private universities. Yes, Brown is a large offender in this, of signing a payment in lieu of taxes agreement over the next 20 years. That was at the start of Mayor Smiley’s administration, but they’ve had those PILOT agreements for years, so his administration was not the first one to engage in that. They’re not paying their fair share to Providence.
There are also large buildings that are getting either tax stabilization agreements or other PILOT agreements in lieu of paying for their fair share of taxes. So if we are continuing to decrease the amount that we’re collecting from the wealthiest institutions – hospitals, private universities – we are going to see the burden then shift to the residents.
I think we also have contracts with the Port of Providence, which is a huge polluter in my district. Specifically, I represent the Washington Park area and the Upper South Side, Lower South Side of Providence, which neighbor the Port of Providence. There is also an agreement that those large polluting industries do not pay their fair share in taxes based on the properties that they own.
On how a tax increase would impact her constituents
No one wants their property taxes to go up, especially in a [re-evaluation] year when many people are seeing their properties increase by crazy amounts. I represent a pretty diverse socioeconomic district from parts of the East Side and the Mount Hope community where I live to downtown, where there are luxury apartments where people are able to pay over $3,000 in rent. But I also represent a lower income swath of Providence where folks are working paycheck to paycheck to make ends meet. Any increase, even $100, for folks who are working at a minimum wage job or folks who are on fixed incomes, will not be able to shoulder an increase in their properties if they do own them. Landlords who have an increase in their properties — they will then pass them on to renters.
On her conversations with the Smiley Administration
I have talked with them extensively, and I think they know that I have been in conversations with Council President [Rachel] Miller about my desire to ensure that we are looking at all of the creative options, whether it’s a vacancy tax, whether it’s an underutilized land value tax already in Providence, or even introducing the idea of an income tax for the city of Providence.
On whether the city should cut spending instead of raising taxes
I think that’s a little bit of fear mongering. There are several other proposals that the General Assembly is working [on] in partnership with the city. They’ve asked for an increase to the parking lot tax. They’re also exploring an increase of fines and fees. But each of those things are under $2 million each, and we’re facing a $22 million budget gap. I would’ve liked to see the city engaged in some real conversation about what will it take for the city to increase its revenue without burdening renters? These are hard conversations, but this problem won’t be solved by an increase to the levy in just one year. We can threaten to close the zoos, we can propose closing more city positions, but I think the real conversation should be how are we as a city going to responsibly raise revenue that’s not going to burden our existing programs that’s also going to be sustainable for the path ahead.
Editor’s Note: We asked Mayor Smiley to participate in this conversation, but he would not agree to a discussion with Sen. Mack. He provided The Public’s Radio with this response:
“Mayor Smiley recognizes that any increase in residential property taxes is difficult, which is why the Administration developed a balanced, three-pronged approach to ensure the burden does not fall solely on taxpayers. In addition to finding new sources of revenue, the Mayor’s proposed budget reduced operating and supply expenses in nearly every department, eliminated staffing positions and reduces expenses by over $9M which allowed the City to propose a lower tax increase than originally thought necessary.
To ease the impact on those most affected, the budget doubles the veteran exemption and increases the elderly exemption by 25%. It also lowers the tax rate for multifamily buildings and sets the commercial tax rate at its lowest since 2009 to support renters and small businesses.
To further diversify revenue, the City reviewed fines and fees and introduced new sources such as a tax on parking lots. Mayor Smiley remains committed to long-term fiscal responsibility and will continue to explore additional pathways to ensure sustainable growth while delivering high-quality services to all Providence residents.
As a reminder, the federally tax-exempt institutions all have voluntary agreements for the city for the first time ever. Because of Mayor Smiley, they are paying more to the city than ever before.”
