Catanzaro questions surplus, wants it used to fund car tax relief

Catanzaro questions surplus, wants it used to fund car tax relief

Lombardi blasts the suggestion, saying it's not time yet

NORTH PROVIDENCE - Town Council President Kristen Catanzaro says she doesn't understand why the town keeps securing large annual budgets surpluses, and she thinks some of the extra funds should go back to residents in the form of car tax relief.

Catanzaro is questioning whether Mayor Charles Lombardi's administration really has its "pulse on the numbers from year to year," or if it may even be using tax increases to pad the town's reserve accounts. She said she doesn't believe the council is being given the "whole story" during each year's budget deliberations.

"If we're coming up with these surpluses every year, why aren't we giving it back in car taxes?" she asked. "That's the biggest question everyone has, why is my car valued so high?"

Added Catanzaro, "if we're pulling out million dollar surpluses annually, we need to make sure we take a hard look at that."

Lombardi railed again Catanzaro's assertions, saying he's getting "a little tired of trying to answer for the success" of his administration's work getting the town back on firm financial footing, even while limiting tax increases.

"We've received nothing but accolades," he said.

The council president "doesn't know what she's talking about," said Lombardi, and he'll continue listening to the taxpayers of North Providence and the finance professionals who say his town "is doing great." His administration is doing everything by the book to save money each year, said the mayor, and that is why the "important" surpluses are being secured.

"She's always trying to put the town in a negative position," said Lombardi. "She's upset we had a surplus?"

Catanzaro's suggestions are "offensive" and loaded with "politics," added Lombardi, and he will continue his efforts to secure surpluses until such a time as the town can afford car tax relief for residents.

If the council president was so concerned about the town's finances, said Lombardi, where has she been on supporting his questioning of the costly disability pension for former firefighter Stephen Campbell, a man hired at 52 years old by Catanzaro's husband Steve Catanzaro, the town's former fire chief.

"You can't find her with a search warrant," said Lombardi.

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To achieve car tax relief for residents, Catanzaro says she wants to bring back a depreciation schedule she says disappeared in 2010. Reinstituting it would lower the value of many cars in town and cost taxpayers less in car taxes, she said. Since town officials are planning upgrades to their software programs, bringing back Vision software, said Catanzaro, she wonders whether the old depreciation schedule can easily be put back in place.

The depreciation schedule used in town prior to 2010, when the state dropped a $6,000 exemption on cars to just $500, was more fair to the average car owner, according to Catanzaro, giving a truer value for a car. Several other communities that still use the Vision software also have the depreciation schedule in place, she said.

Tax Assessor Janesse Muscatelli said Catanzaro's question about software is misplaced. Whether or not a community uses the old depreciation schedule "doesn't have anything to do with what sort of software you have," she said.

Muscatelli said assessors were handed the depreciation schedules back in 1998, but they quickly became "obsolete" as more and more people chose the $6,000 exemption instead of the schedule that accounted for the deterioration of their cars.

The depreciation schedule had "dropped out of our system" by the time the state cut the exemption down to $500 in 2010, said Muscatelli, meaning residents no longer had the exemption or the depreciation schedule to benefit from, and car taxes increased.

Catanzaro said she has testified numerous times before the state's Vehicle Value Commission on what she sees as inequities in Rhode Island's car tax laws, particularly on how cars are over-valued. She has been told on more than one occasion that local officials have the option to lower their high car tax rate of $41.95 per $1,000 of assessed value to save money for taxpayers.

But according to Catanzaro, "everybody knows their cars are over-valued, not over-taxed."

"It's a value problem, it starts with you," she says she told the commission. "I'm not here knowing I can even change the rate."

If the depreciation schedule more accurately reflects the age and condition of a car, residents will feel like they're being treated fairly. Everyone in the state should be using the same system, she said, and depreciation schedules shouldn't be implemented in an "arbitrary" manner.

Catanzaro asked Finance Director Justin Cambio how much the return of the old depreciation scale would cost the town. He responded that the hit would be in the range of $500,000-$700,000 annually. He said town officials don't plan to move back to an old depreciation schedule because it would be to costly. State officials allow communities to use the schedule, said Cambio, but don't require it.

Cambio took issue with Catanzaro's statements, noting that just because the town scored a budget surplus of $1.6 million for the fiscal year ending last June doesn't mean that officials are over-taxing residents or can just spend that money on other things. "Every healthy nonprofit" is looking to secure budget surpluses, he said

Lombardi added that he remains committed to securing surpluses as officials continue to pay down a five-year deficit reduction bond. It will only be after that bond is paid off that he will move on to his next two highest priorities, car tax relief and road repaving, he said.

Lombardi said he wants to know how anyone can trust a woman who, in comments to The Providence Journal this month about tax increases funding surpluses, somehow connected last year's $1.6 million budget surplus to a tax increase. He doubts Catanzaro even realized that there was no tax increase last year when she talked about this year's tax increase, said Lombardi.

Catanzaro explained that her comments to The Journal were more about having so many consecutive surpluses and wondering whether any of the town's recent tax increases have been necessary. She said she regrets voting for this year's 14-cent tax increase based on the size of the 2012-2013 surplus that was revealed last month.

Comments

It is funny when people who are suppose to know, don't. A town needs a surplus, as school department too for that matter, as that has a great effect on the bond rating!! Cutting a surplus weakens the outlook the bond rating companies will have of a city or town.

Stop trying to pander with incorrect facts.

If Mayor Lombardi walked on water, Catanzaro would accuse him of not knowing how to swim. Thank God that the Mayor has improved our bond rating and therefore saved millions of dollars in interest payments. A surplus and "rainy day fund" are necessary for a good bond rating.

The town has surpluses, the taxpayer have a deficit, I think the taxpayers are the ones needing a break.
We hear surpluses every year yet come budget time there is NO surplus line item, it just seems to vaporize into some project or program that is NOT in the budget.
Like all general funds, it gets used for anything that falls into the administrations want to do list without getting any review or approval for a budget change.
If we have a rainy day fund for surpluses then there would be accountability, which there is NOT now.
The car tax is outrageous, we are in the top 3 towns for car taxes, this is another mismanagement by Lombardi and his team. No depreciation means just that we get hit with the highest rate at the highest valuation, NOT fair. The people of NP deserve better to the policies handed out by Charlie. BTW speaking of the deficit reduction bond we had to swallow $10 million because of mismanagement of past mayors and town councils (Charlie was on the town council and president during these times)why NOT hold some of the present problems accountable to those that mismanaged then, like Charlie and his team.

I love the comments supporting Charlie. Obvious these people are oblivious that they, the tax payer are the reason of a surplus. They also have fallen into the trap of a self promoter Charlie Lombardi. These same people must not pay attention to their tax bill (auto & Prop.). The Mayor has taxed you to death since being elected and has limited your services something you do not deserve. Remember the last blizzard. How long before your street was plowed ? A majority of the Junk he is buying from the State of R.I. for DPW broke down on the day of the blizzard. Everybody thinks he is saving taxpayers money by buying surplus from the State of R.I. Not so that day of the blizzard was proof. He has provided no relief in the auto tax exemption. Forget about the values, that is something he cannot control The exemption he can control, but why give the taxpayer a break when they continue to pay and he can blame the value issue on the legislators at the state level. He raised your taxes .14 this year, not much but he bragged he had a large surplus. Or does he ? He is spending a lot of money in legal battles because he cannot negotiate only dictate. This is another issue the taxpayers like to hear from the Mayor, that he is fighting Unions. He is not negotiating and fighting the Unions with taxpayer dollars. He has no negotiation skills that could be fair to unions and favorable to the taxpayer. But why do that when you can promote yourself at the expense of the taxpayer. If the taxpayer only new the dollars spent fighting unions. Some of the fights frivolous and not mentioned in the media. That's another issue not to discredit the Valley Breeze, they engage in selective journalism giving the Mayor the last say in any article and not printing what other parties have to say. The Mayor reminds me of the Great Oz in the Wizard of Oz. Hopefully the taxpayers will realize who the man is behind the curtain.

The council president's comments make no sense and sure sound politically motivated since there is no financial logic to her position.
The administration is on point by building a surplus. Borrowing costs and funding availability are directly tied to the town's bond rating which is imapcted by the financial strength of the town. A poor rating means higher interest - means more burden passed on to taxpayers. Suggesting that the surplus should be used to reduce auto tax rates is also "weak" since not everyone has a vehicle so the seniors and/or anyone without a vehicle would lose again. A better plan is to hold taxes by improving the fiscal strength of the town - this has more of a benefit for the senior population and all North Providence residents in general.
Love it or not/admit it or not - the present administration is doing a better job with the finances than we've seen in years - including the Mollis tenure and prior.
The council president needs to get off her political soap box and start considering what's best for the people of the town. Mistakes like the Campbell issue are significant and this type of error has a material impact on taxpayers today and possibly in the future. We should be thankful that we have an administration delivering results and doing the right thing.
It's too early for campaigning and no one cares at this point so start doing what you were elected to do.

Results matter - everything else is just talk ..