Budget Commission 5-Year Plan Includes Smaller Supplemental Tax

Board to discuss how to assess bills to add 4.5 percent onto 2012 levy on Tuesday.


Editor's note: The total $14.5 million deficit figure comes from the $10 million cumulative deficit, combined with the $4.5 million the Budget Commission added to the School Department budget in 2012, bringing schools up to $66.9 million.

After months of audits and meetings, Woonsocket has a five-year plan to solve its $14.5 million deficit, including a smaller supplemental tax increase added to the base than proposed last year.

The "more modest" supplemental tax would add $2.1 million more to this year's budget, a 4.5 percent increase on the 2012 tax levy, said Tax Assessor Chris Celeste. He noted the city has already taxed up to the state's 4 percent increase limit this year.

At the Feb. 4 Budget Commission meeting, City Finance Director Thomas Bruce noted the increase would be a permanent, recurring addition to the city's tax base. According to a spreadsheet released to press at the meeting (see attached .pdf), the increase would add $2.5 million to the city's revenues each year from 2013-2017, assuming an 85 percent collection rate. 

How that increase will impact the average taxpayer remains to be seen. Celeste said the Woonsocket Budget Commission will discuss options he will present at their next meeting Tuesday, Feb. 19, at 3 p.m. at City Hall, 169 Main St., in Harris Hall. 

Last year, the City Council asked the General Assembly to approve a 12.5 percent tax increase to raise $6.6 million in 2012 (also a permanent increase). The bill failed when the city's General Assembly delegation withdrew their support.  

"It's a much more modest supplemental tax than what we were talking about a year ago at this time," said Commission Member Peder Schaefer.

The original supplemental tax bill would have led to an extra $3.15 for every $1,000 of assessed residential property value. For the owner of a home worth $150,000, that would've meant a $472.50 bill. The supplemental tax would have also tacked on $4.51 for commercial property, and $5.81 for motor vehicles.

The proposed new supplemental tax revenues are one element of the deficit fix, which relies on a series of as-yet unrealized assumptions, including union concessions, cost cutting and a "deficit reduction legislative package" which the supplemental tax is part of, according to City Finance Director Thomas Bruce.

The other elements of the legislative package are: 

  • A bill raising the 8 percent reimbursement on subsidized housing to 15 percent.
  • Transfer of the municipal pension system into the state system.
  • Stretching the amortization of the pension liability from 5 to 30 years.

With all those parts in place, Bruce told the Budget Commission, Woonsocket can, "Bring the deficit, in five years, over to a surplus of $4.1 million."

"I understand this is a realistic plan, but it may not happen," said Commission Member Peder Schaefer, "I'm comfortable with the plan as it's currently presented."

Bruce said changes to state aid and unforeseen emergencies could affect the plan. Assuming all that follows their estimates, though, Bruce said, "This is what we're going to do." 

give me a break February 14, 2013 at 04:56 PM
and what are the unions giving??? from the looks of it nothing
give me a break February 14, 2013 at 04:58 PM
can the supp. tax be spread over 30 years we on fixed income
Rob Borkowski (Editor) February 14, 2013 at 07:45 PM
Hi, taxed - those are details we'll have on Tuesday, it looks like. Regarding your first question, Finance Director Thomas Bruce has said the union concessions will make up the bulk of savings in the plan. Some of the details on that are at this link, the series of unrealized assumptions I referred to in today's piece: http://woonsocket.patch.com/articles/woonsocket-needs-unions-legislators-officials-cooperation-to-avoid-bankruptcy
Nelson Aldrich February 14, 2013 at 11:07 PM
I've said it before and i'll keep saying it,Woonsocket's creditors give nothing at all.State law says they have to be paid no matter what.State and local government are now the enemy and their complete arrogance and lack of respect for struggling people are reminiscent of the Roman Empire and the British Empire at the time of the Revolution. Think i'm nuts? Read history. Does history repeat itself? Yes it does.If anyone thinks that these "experts" are going to fix anything you'll need to seek help.The fine print says that all this is subject to change at the state level and i'll add the federal level too.Tax increases as far as the eye can see and they'll be more than happy to kick you out on the street and sell your home to the highest bidder.
michael February 15, 2013 at 01:43 AM
This budget commission is a joke this commission was its handed down to us by the state. Now what ever happened to the 10 million dollars that was lost in the school budget .then the state said it short changed the budget that year. Now it doesn't take a rocketscientist to figure out woonsocket is screwed . We are on the road to finally bankruptcy. Who do we blame for this is. It seems like our elected officials hands are tied for the next 5 years this budget commission is running things now .we are being forcefed veal sandwiches down our throats. We should just shut down cityhall for the next 5 years and let the state run this city further into the ground. I remember months ago when our elected officials said it,wouldn't happen to woonsocket that everything will be alright that was to good to be true I guess.fSo now the only thing we can do now is hope this budget commission fails to fix what they broke And set us free.
give me a break February 15, 2013 at 11:00 AM
here's a huge saving no more pension,go to a 401k like most compannies
Paradis February 15, 2013 at 06:12 PM
How about doing a poll to find out how many property owners in Woonsocket are getting raises and COLAs this year. How many are on fixed incomes? How many are unemployed or under-employed? In case the council and commission aren't aware, RI has the highest rate of unemployment in the US (tied -w- Nev)! I'm sure that the poll will show that we are all loaded with spare money to keep handing over to the city. Many people are using their savings and digging into their private pensions/401ks to survive. People who are already sinking are threatened with having their homes auctioned off by the city to fund this monstrosity. The city has already raised property taxes via the slow demise of the homestead exemption and increased car taxes, but they always demand more to fix the budget overspending and take care of the special interest groups. Better save room in the projects for former property owners. Just go bankrupt and get it over with already!
Nelson Aldrich February 16, 2013 at 12:41 PM
People really need to understand this:there's no such thing as a municipal bankruptcy in RI.
Steve February 16, 2013 at 08:23 PM
Anyone who thinks the Budget Commission and the City of Woonsocket will stop here on raising revenue is kidding themselves: l reference an article to an accelerated Homestead Exemption payoff plan made in the Woonsocket Call today: Grappling with the fiscal chore of erasing a budget deficit on tract to reach nearly $15 million by the end of the fiscal year, the commission has already approved a phase-out of the homestead exemption at the rate of 3 percent a year. As the commission tweaks the details of a recently unveiled five-year plan designed to eliminate the deficit, it’s possible – likely, some say – that the panel will hasten the pace of the phase-out. As Celeste puts it, “We’re on a five-year plan. Why’re we on a 14-year phase-out?” Though a quicker phase-out hasn’t been addressed in much detail, Ward, who is also a member of the Budget Commission, says the five-year plan is flexible enough to adjust the homestead exemption as a strategy for generating new revenue. http://www.woonsocketcall.com/node/7462 So, single family home owners, get ready because here it comes!
Paradis February 18, 2013 at 06:13 PM
I read that article you referred to, Steve, it's pretty pathetic, huh? We already took a 4% tax hit for 2012 as stated in this article, which they plan on leaving as a permanent, recurring tax according to Mr. Bruce. They also increased vehicle taxes. Plus they want to smack us with a 4 1/2% supplemental tax on top of that. In addition to those tax increases, they want to hasten the pace of the homestead exemption phase out. We will also be facing increases in water and sewer too. Glad to hear that Ward says" the 5yr plan is flexible enough to adjust the homestead exemption" in regard to possibly hastening its demise. Homeowners' budgets are generally not flexible enough to fund all these increased taxes. It must be nice for Mr. Schaefer to "feel comfortable with this budget", struggling homeowners will feel very uncomfortable with it.
Steve February 18, 2013 at 09:15 PM
Paradis, I only try to present the facts as I read them in local news articles and see on the city local council meetings. There was a conversation during a city council meeting a few weeks ago that the State of RI. felt the commercial tax rate in the city was too high and the real estate tax rate in the city was too low, thus leading to the exodus of commercial interests in the city. I believe this is where these accelerated single family Homestead tax rates are coming from. Regardless, this is where the city is going: Implement a permanent supplemental tax bill Implement a permanent 4% tax levy Implement higher and accelerated single family tax exemption rate Higher trash fees Higher municipal city use use fees Higher water bills Higher sewer bills This is the "Out of the Box" thinking that Mr. Ward and co. keeps talking about? Amazing!
Novan for Life February 18, 2013 at 09:17 PM
yeah you know $15 million now doesnt sound as bad as ($96 million by 2017) if this city doesnt resolve its unfunded pension liability, as far as the deficit is concerned thats not going away anytime soon. (so what do you propose they do?). Where else is the city going to get revenue from?
michael February 18, 2013 at 10:56 PM
No wonder the people are tryin to leave this riden city
JAY LYDON February 19, 2013 at 07:17 PM
insted of takeing more from the people who already taxed out thier rear end how about we try to get some money from the people who think its thier job to make babies they cant pay for all i here about how everyone needs to pay thier FAIR SHARE!! how about they start paying thiers thier the ones who are using most of the services the people who work pay for.
jason February 19, 2013 at 08:08 PM
if ward would spend as much time trying to find "outside the box" ways to cut spending as he dose trying to stick his hand in the tax payers wallets maybe we wouldnt be in this mess
robbie February 26, 2013 at 02:19 PM
Well I know my family and I will up and leave our house. Let the city take the houses we can't Scots to live here anymore . Let's all love to mass and let the city have all the houses that aren't worth what you wipe your butt with. Then let them see you van only push us so far
Nelson Aldrich February 26, 2013 at 04:01 PM
Right you are Steve,how could we expect anyone who didn't see this train wreck coming to fix it?


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