Council shaves residential tax increase down to 14 cents

Council shaves residential tax increase down to 14 cents

NORTH PROVIDENCE - Members of the North Providence Town Council last week found $228,000 in cuts to Mayor Charles Lombardi's $89.8 million spending plan for the 2014 fiscal year starting July 1.

The modified budget trims Lombardi's proposed tax increase of 21 cents per thousand dollars of property value down to 14 cents, according to the mayor's office. The residential tax rate will now move from $24.15 to $24.29.

For the owner of a home valued at $180,000, with a 20 percent homestead exemption factored in, the total tax increase will now be about $20.16 for the fiscal year starting July 1, down from $30.24 under Lombardi's original proposal.

In other words, after two straight years without any tax increase, this year's hike will amount to about 10 cups of coffee, with small tips factored in.

In addition to the 14-cent increase for homeowners, commercial property owners will see an 18-cent hike, to $31.03 per $1,000. The personal property tax rate will jump 41 cents, to $69.41, while the motor vehicle tax rate, frozen by the state, will stay the same at $41.95.

Lombardi's proposed $560,000 increase in the tax levy, or total amount collected in local taxes, was trimmed down by four-tenths of 1 percent, to about $332,000.

On May 23, at 5:30 p.m. in Town Hall, officials will hold a second and final hearing on the 2013-2014 budget. The budget will then be returned to Lombardi to be signed before going back to the council for final adoption at its regular meeting on June 4.

Lombardi commended the council for agreeing with his contention that the continued improvement of the town's overall financial picture, including repeated bond rating upgrades, is more important than having no tax increase or even cuts to spending.

"I'm happy that the council did listen and look at the whole financial picture of our town," he said. "We did what we had to do."

Town Council members, who were not quite able to zero out the tax increase as previously hoped, agreed with Lombardi that $525,000 in additional town money should go to the North Providence School Department, well short of the $1.2 million more requested, and $250,000 should go into the town's Other Post Employment Benefits, or OPEB system, which is under-funded by about $66 million according to Lombardi and Finance Director Tom Massaro.

The biggest savings item found by the council was $182,000 in unspent funds from last year that would have gone into the town's surplus fund and not directly helped taxpayers this year, according to Town Council President Kristen Catanzaro. It was Catanzaro who noticed the $182,000, a leftover portion of a $400,000 line item meant to pay for the ongoing town-wide revaluation. Instead of allowing the money to go into the surplus fund, said Catanzaro, the council will create a special line item to spend the $182,000 still remaining in last year's revaluation account during the coming fiscal year and cut Lombardi's new revaluation line item of $257,000 by that same amount.

"That money would have just been lost and spent, and the taxpayers would have paid the difference," said Catanzaro. "It was a good find."

As a result of the $182,000 discovery, the town's total new expenditure for the revaluation in Fiscal Year 2014 will be about $73,000.

Other smaller cuts to various line items brought the total in cuts to Lombardi's budget to the $228,000 figure.

According to Lombardi, the reason the $182,000 was not spent in the 2012-2013 year was because town officials were charged a monthly fee of almost $20,000 instead of paying for the entire revaluation up front.

The mayor said he doesn't have a problem with the council doing what they did to cut into what he says was already a "small" tax increase.