Budget Commission Sends Homestead Reduction - Car Tax Combo To General Assembly
One-time vehicle tax will raise $500K, Homestead drop will raise $2 million.
The Woonsocket Budget Commission voted yesterday to add $2.5 million to this year's tax levy with a one-time supplemental tax bill on vehicles at about 6.2 percent of 2012's bill and shrinking the Homestead Exemption permanently to 29.9 percent.
The Commission voted to approve the new tax bills at about 4 p.m. in Harris Hall at City Hall.
State law doesn't allow the city to keep the vehicle tax that high perpetually, so subsequent years will raise the entire extra $2.5 million annually needed to balance the city's books entirely from lowering the Homestead Exemption, this time to 27.5 percent.
The move is a combination of elements of several options outlined by Tax Assessor Chris Celeste during the last Budget Commission meeting, tweaking the homestead reduction from option B3 and the car excise tax idea from option A2.
Supplemental tax bills sent this year will be between 6 and 6.5 percent of last year's bill for vehicle taxes. Celeste said the bill on a car valued at $15,000 would be $40.
Celeste noted that supplemental bills on vehicles have a low collection rate, but Mayor Leo Fontaine said the city will catch up with delinquent vehicle owners in November at the Registry of Motor Vehicles.
Fontaine said the supplemental car tax would involve people who don't own homes in the solution of the city's deficit. He said it's unfortunate the tax has to fall back on residential property owners after this year. "I feel at least we should be doing this," Fontaine said.
The supplemental tax bill for the average residential home at $150,000 will be about $437, Celeste said.
Sending out each round of supplemental tax bills requires General Assembly approval, since it will raise taxes above the four percent cap this year. The Budget Commission will send a resolution asking for permission to assess the bills to the General Assembly.
The Budget Commission will also send enabling legislation to create an elderly tax exemption for people 65 and over living in single family homes. Budget Commission member and City Council President John Ward said the exemption would apply to people meeting the age requirement, who have lived in their home for at least 5 years and make $30,000 or less.
If a senior meets all those requirements, the first $12,000 worth of their home would be exempt from taxes, Ward said. He said the Commission will likely add multi-family homes to the exemption, since there are many elderly residents who've been living in such homes all their lives. City Council Vice President Dan Gendron made the suggestion during the meeting.
The supplemental tax bill is one part of the 5-year plan to make the city solvent again. It will need to pass at the General Assembly, as will concessions from town employees and retirees.