A new city commission will explore ways to hopefully provide a fair means of tax relief to residents who were hit hardest following this year’s property revaluation – which inordinately affected lower- and middle-class families and resulted in many peoples’ property taxes increasing by as much as 25 percent, and in some cases even more.
The so-called Tax Relief Commission was put forth by Ward 2 Councilman Jeremy Rix during the Warwick City Council meeting on Oct. 7, which was unanimously approved by the full council. The commission will include 16 individuals, including the nine city council members, State Rep. David Bennett, State Senator Mark McKenney, Bill DePasquale (city planning director), Brian Silvia (city finance director) and two members of the public. Each elected official on the commission may also appoint a designee to serve in their place.
Rix said on Monday that the ultimate goal of the commission is to have conversations with members of the public who have been affected by increasing property taxes due to the revaluation, which will hopefully lead to the city enacting legislation to put in place a property tax exemption that will help rebalance the property tax burden among the city’s residents.
“This is an issue we’re seeing across the state and across the country for houses in this price range jumping dramatically as a result of the economy and the housing stock,” Rix said. “It’s not a matter of questioning whether prices for these houses in this range have risen, it’s a question of what can we do about it? because it’s now putting the burden on a group of people who are least able to afford it, while at the same time giving a break to others.”
To quickly recap the situation, the city conducted its mandated property revaluation process this past spring, which occurs once every three years, and due to the high demand and sales of houses in the aforementioned “sweet spot” range of $150,000 to $250,000 – particularly houses around $180,000 to $225,000 – saw a dramatic increase in their assessed valuation.
As a result, for example, property owners that had been paying property taxes on a house valued at $150,000 in 2010 were now facing a tax bill based on that same house – which may not have changed much at all – but now the house was being taxed as though it were worth $200,000 – and in some cases residents experienced more dramatic increases than that.
And although the tax rate actually decreased in Warwick for the new fiscal year that began on July 1, those property owners of the highly valued homes were suddenly beset with much larger tax bills, while those with more expensive homes – which have been in far lower demand – saw either no significant increase in their bills or even saw a tax cut.
Rix clarified that the commission isn’t seeking to adjust the valuation process, which is mandated by the state, but rather is looking to “smooth out” inequities in how the revaluation affected Warwick residents.
He envisions that could be done in multiple ways, but the prevailing method will likely be some form of property tax exemption – where a certain amount of a homeowner’s property value will be exempt from paying taxes. The amount of this exemption would be uniform for all properties in Warwick, which would cushion the tax blow for those with homes of lesser value and rebalance the property tax burden on those who are more able to afford it.
Rix stressed that the exemption must be carefully calibrated so that it is revenue neutral.
“The city is not in any position to cut taxes in general,” he said. “I don’t know if that number would be $25,000 or $50,000. That’s something where we would have to get the numbers from the tax assessor and finance director to figure out what exactly this would look like to figure out what would be fair here and what would achieve the best result.”
Rix also said it would be important that any such exemption was automatic and required no steps to be taken by residents, and no paperwork be filed by the city.
“The goal of this is to have something that is simple and is straightforward and accomplishes the goals without creating some new complicated system that requires additional work on anyone’s part,” he said.
Rix also mentioned that public input is crucial to the whole process, so the public is encouraged to attend the meetings, which could begin as early as mid-November in the City Council Chambers at City Hall. Rix said that the goal for the commission would be to wrap up its work within six months, so any enabling legislation required by the general assembly could be passed in time for the city’s next budget cycle.
“One of the most important things this commission can do is make sure to be transparent and accessible to the public,” Rix said. “So, we’re going to announce our meetings well in advance and set aside at least one full hour, if that much time is needed, at each meeting, for public comment.”