Kane: National Grid due for $400,000 tax break if town’s tangibles rate isn’t changed

Kane: National Grid due for $400,000 tax break if town’s tangibles rate isn’t changed

CUMBERLAND – A Town Council effort to set the tangible tax rate higher than Mayor Bill Murray recommended could delay tax bills this year, the mayor is warning this week.

In a letter to councilors, Murray said councilors must proceed with their planned adjustment vote at the April 19 without any change – or else run the risk of delaying first-quarter tax payments needed to cover the School Department payroll and interest payments on town debt among other obligations.

He chided them for not communicating with his office about the proposed change in time to advertise the ordinance for Tuesday, April 11 meeting when the levy was scheduled to be set.

But Councilor Tom Kane, (pictured), turned that comment around Tuesday night, telling the mayor, “It is my hope that the town will not suffer any financial implications due to the implicit lack of planning on behalf of town administration.”

It was Kane, himself a tax assessor in the town of North Providence as well as chairman of the state’s Personal Property Valuation Committee, who presented the resolution to seek state permission to set the business tangible rate at about twice the property tax rate by keeping it at $29.53 per thousand dollar valuation rather than dropping it to no more than 1.5 times the property rate, or about $22.60, as required by the town’s charter.

Cumberland and other municipalities assess tangible or personal taxes on businesses’ equipment, such as computers and furniture.

A higher amount is allowed, with permission by state law, Kane said, in years when a community goes through a revaluation as happened this year in Cumberland.

If approved, the net result, Kane told councilors, is tangible taxes for all businesses will stay about the same as last year.

Councilors, meanwhile, do appear poised to follow through with this proposal after voting 6-1 last Wednesday to pursue permission from the state Office on Municipal Affairs.

According to Kane’s figures, Cumberland has 942 businesses paying tangible or personal property taxes based on the equipment they own.

The total worth of all that property is $145 million, which generates taxes totaling $4.3 million.

But surprisingly, he said, 82 percent of that amount is paid by just 25 businesses, which include National Grid, Cox Communications, the Pawtucket Water Supply Board and CVS.

Kane noted that the remaining 917 businesses account for just 18 percent of the assessed value.

“So we have National Grid way at the top at $60 million and have our median business at $8,000, so it’s a very top-heavy tax roll,” he said.

If the administration’s proposed rate isn’t changed, Kane said, the power company would receive a tax break of $415,590 this year.

Said Kane, “I think that’s a large burden to place on all the property owners in this town. With all the funding issues we have going on, to say we’re going to decrease National Grid’s tax bill by $400,000 is a steep price to ask. Especially because that money will increase the burden on home owners and commercial property owners.”

Alone in his opposition was Councilor Scott Schmitt who said, “What we’re saying is with these businesses, because they can afford it, they should be paying for it. And in principal, I can’t agree with that.”

Kane countered, “I don’t think that’s my argument with this. I’m not making the statement that just because these businesses can pay that they should, just that we should be maintaining our current tax rates. I’m not asking to increase them, I’m not asking to place an added burden on any of them. And many municipalities have adopted this language.”

Otherwise, argued Kane, residential property taxpayers would have to absorb the difference of just over $1 million.

Kane also said Cumberland’s tangible tax rate is among the lowest in Rhode Island.

Schmitt reminded councilors that for years Cumberland was overcharging on tangible taxes by assessing more than 1.5 times the property rate.

It was under the direction of former Councilor Art Lambi that Cumberland fixed its ordinances to align with the charter, he said.

“What this ordinance does is basically silences the former council,” Schmitt said.

Said Councilor Bob Shaw, “Although I totally agree with both sides, the numbers as presented before us are sound. It doesn’t make sense to me why we should give a little bit of a tax break and put the burden on taxpayers to come up with $400,000. We’re not asking these companies to pay more; we’re asking them to sustain.

“This as presented sounds like one of the minor little things we can be doing to put the town in a better position,” he said.