Budget Commission OKs $122 Million Budget, Homestead Exemption Phase-Out

Commission to seek $7 million in cost savings, commercial tax rate set to 27 percent.


The Woonsocket Budget Commission approved a $122 million budget Thursday afternoon that still carries a $7 million deficit.

The Commission also approved a phase-out of the city's homestead exemptions. The Homestead exemption expires for single family homes in 2026 and two-family and three-family homes in 2017.

Real estate taxes will increase by 3.91 percent, below the state cap.

"This is $4.8 million more than we're going to appropriate," noted Commission member Peder Schaefer.

After the meeting, Commission member Mayor Leo Fontaine said the budget still has a total deficit of $7 million, including a $2 million deficit reduction payment for previous school department shortfalls and a current $4.9 million deficit. The budget includes $66,939,062 for the school department.

Carolyn Dias, chief of fiscal integrity and efficiencies with the Department of Education, the fifth person to help straighten out the Woonsocket School Department's budget, told the Commission she was wrapping up two weeks of work to sort out school finances.

Dias follows Bacon & Edge Consulting,  Interim Finance Director Ralph Malafronte, current Commission Member Dina DuTremble, and Robert Civetti of Braver. She said she should be finished by the week of July 16, but that the $66,939,062 figure is close. She said it would probably change, but not materially.

"I'd rather adopt a budget closer to reality," said Commission Chairman Bill Sequino, referring to the outstanding deficit.

But Commission member Council President John Ward argued for keep the budget at $122 million, and find cuts to make up the difference.

Ward said the commission should now work to see how much of the deficit they can make up through negotiations with unions and other cost savings. Should that prove unsuccessful, he said the Commission would have a good case for either asking for an emergency tax increase from the state or taking the city into receivership.

"Now we have to go out and find the savings," Ward said.

The Commission also approved a plan to phase out the Homestead Exemption for residences. Previously, the Homestead Exemption exempted the following percentages of assessed value:

  • Single family/condos: 42 percent
  • Two family: 15 percent
  • Three family: 5 percent
  • Four to 10 family: no exemption

Now, for single-family homes and condos, the exemption will be 39 percent for tax year 2012 (FY2013), and be reduced by three percent annually through 2026, when it will end.

For two-family homes, the exemption will be 12 percent and reduced by three percent annually through 2017, when it will end.

For three-family homes, the exemption will be four percent and reduced annually by one percent through FY2017, when it will end.

With the 3.91 percent tax increase, and the three percent decrease in the Homestead Exemption this year, the increase on the tax bill for the average residential home valued at $150,000 (taxed at $91,000 with the Homestead Exemption) will be $174, according to Finance Director Thomas Bruce.

The Commission amended the resolution to set the city's commercial tax rate at 27 percent of the city's total tax levy, with the balance, 73 percent, on residential property.

The Commission's next meeting will be Monday, 10 a.m. at City Hall, third floor.

give me a break June 29, 2012 at 04:13 PM
39% of 4% that condos receive . asw alway stick to the property owners, sure am glad I left this tax hole. good luck to the rest of you
give me a break June 29, 2012 at 04:14 PM
looks like the single and condo owners gettig it
Russell Archambault June 29, 2012 at 05:30 PM
i know that some people will be outraged by this new proposal because it will hit home, but this is starting to make sense, finally. this proposal can become comparable with the rest of the state. woonsocket can get business coming in or not at least leaving
jack June 29, 2012 at 05:44 PM
Taxes going up, homestead phasing out, half the lights out, plus taxes going up, oh did I already say that. In addition, no work is done on city streets to clean them up. We should give the people that are on welfare cell phones for free plus free minutes. Oh wait, we already do that, along with subsidized housing, free food, free money and now free phones. More and more or should I say less and less people paying taxes, so the taxes will continue to go up. Does anyone see a light at the end of the tunnel? Get out while you can!! Oh wait, we can't because our houses are worthless. And now you single family home owners your taxes will go up almost 7% every year until 2026. We will be paying more for less year after year.
David T June 29, 2012 at 05:49 PM
Hey Mr. Mayor, How are those talks with all the unions going? Great job bud! Hey Union Leaders, I know you have "given back" so much over the years, but it's wasn't enough. Wake up! It is obvious you are all just waiting to see if the city goes into receivership and your plan is to do nothing until forced to do so. So thanks. You know, there comes a time when all the talk of how much you care is totally obscured and rendered disingenuous in the face of this crisis. You have lost your way and you have lost all credibility for the actual hard working people you represent. So, good job!
Still Hope June 29, 2012 at 05:54 PM
Is the Budget Commission doing anything that the elected city council hasn't already proposed? Seems like the commission is "just for kicks", cuz they sure aren't helping the cause much. Rob, please edit: misspelled Department and also this: "The City of Woonsocket will begin a phase out of the homestead exemption beginning with tax year 2012 (FY 2013). The phase out will slowly reduce the percentage of reduction received by homestead recipients, while simultaneously reducing the tax rate for all property owners. The phase out plan is as follows: The single family and condominium rate of 42% will be reduced by 3% per year for 14 years. The two family rate of 15% will be reduced by 3% per year for 5 years. The three family rate of 5% will be reduced by 1% per year for 5 years. This results in approximately an $0.84 reduction of residential tax rate. The bill for the average single family home currently receiving a homestead exemption will increase by approximately $70 per year due to the homestead phase out." Thought I'd point that out before you get verbally raped by others.
la_mouffette June 29, 2012 at 05:58 PM
Seeing the homestead exemption go away takes me back.... Once upon a time, Mayor Menard had a vision of Woonsocket as an upscale, charming suburb of Boston, with copious condos full of "quality people", drawn in from Massachusetts by crazy low property taxes on condos, a walkable downtown, a vibrant school system, and a convenient commuter rail trip to work, starting at our beautiful, historic depot. I met many people who had been drawn in, not from Boston but from out of town, repeating quietly that they had it on good authority that Woonsocket was "the next big thing" and this was the time to get in on it, while prices were "low". ah, dear. I always thought that plan, and how it was carried out, had problems. But I did like the idea of trying to hook us back into commuter rail. That would no doubt have its issues, too, but it would at least give us one major advantage over the surrounding communities. At this point, I imagine many naive out-of-towners who bought condos (believing the hype that we were an up-and-coming city financially and culturally, with FABULOUS taxes for single-unit owners) must be sobbing in their tiny, dim, loft-style living rooms right now. They own condos with plummeting real estate values, in a limping town that's almost broke, and now even those artificially "low" taxes are going to go away... I do pity them, but with the mess we're in, I don't see how it could be avoided.
la_mouffette June 29, 2012 at 06:00 PM
oh! and, besides the disappearing Homestead, the real meat of this article-- "Ward said the commission should now work to see how much of the deficit they can make up through negotiations with unions and other cost savings. Should that prove unsuccessful, he said the Commission would have a good case for either asking for an emergency tax increase from the state or taking the city into receivership."
Novan for Life June 29, 2012 at 06:23 PM
wow no concessions from unions or no attempt by this commission to even look at the possibility, AGAIN the homeowner has to bare the brunt of it GET A RECIEVER IN HERE BEFORE this commision drives us off the edge!!!
Novan for Life June 29, 2012 at 06:27 PM
Split school board vote allows panel to oust leaders, Voted by Donlon,Nadeau,Phongsavanh would need second passage to take affect
Rob Borkowski (Editor) June 29, 2012 at 08:00 PM
Thank you! I took the original numbers from a separate page of the handout from yesterday's meeting. But I just double checked with Finance Director Thomas Bruce and made the correction. I think I took my numbers from the list of possible values for the exemption, not the current values - thanks again!
Rob Borkowski (Editor) June 29, 2012 at 08:04 PM
Thanks, Robert - I was just working on a story on that. It's posted now. Sometimes I don't think my fingers can type fast enough...
Still Hope June 29, 2012 at 08:38 PM
Are you implying that you do not share the former Mayor's vision for the city or that it is just unsustainable? I thought the city was headed in the right direction in the start of this century. What do you think was catalyst that brought us to this currently bleak situation? What do you think is the right way to go from here?
Russell Archambault June 29, 2012 at 09:50 PM
@ rob loosen up those fingers at the sexy Saturday night at the bowl. all your readers are attending. you will be needing more finger limbering, with all the great reporting that will come from the greatest show on earth. the "woonsocket circus"
Lisa June 29, 2012 at 09:54 PM
Don't forget the LIHEAP Enhancement Charge (illegal TAX) that was added to our gas and electric bills to force us to pay utilities for the welfare crew, Jack.
Novan for Life June 29, 2012 at 10:31 PM
David your trashing fellow tax payers i'm usually the one to but really?
Novan for Life June 29, 2012 at 10:33 PM
anytime rob it was by chance i came across that
Memere June 30, 2012 at 12:35 AM
Still Hope, What is bringing this city down is all the subsidized housing that we now have and all the characters who have moved here that have no loyalty to our town and do not follow our laws. What business do you think would move into a community that has that kind of population? I am not talking about poor people or people from other countries, I am just talking about the drug culture and those that do not follow the law. Just look at all the robbery of copper piping that is going on in this city and all the break-ins. Those of us who have lived in this city for a long time know that is not the way Woonsocket used to be. We have always had poor people and immigrants but, we all lived here peacefully. Now it is dangerous to be out late at night and you must remember to always lock your doors and even then, you don't always feel safe. Our streets and parks are dirty and many buildings are covered with graffiti. This is not very appealing to a new business that is looking for a place to set up shop. And now our taxes are going who knows how high. And why would families move to a community that does not support ( and has not for a long time) its school system? One of the first thing that young families look at is the schools.
Memere June 30, 2012 at 12:46 AM
I would love to see Mayor Menard's vision come to fruition! Remember when there was talk of having a satellite college campus here? Now that would have been really great. And there also was talk of having a railroad connection to Boston and other places. That would have been absolutely wonderful also. But the first step must be to improve the image of our city so that businesses and families will want to move here. Unfortunately our current administration and city council just do not seem to have the ability to make this happen. Our administration must demand that the state stop treating Woonsocket like a second class citizen. This has gone on long enough. Whenever a state office needs to be built, Woonsocket is never considered. Having one here would help to improve our image. And we are not doing very well on state funding for our schools either yet we have many special needs students and need more money to provide for those kids. They are our kids also and deserve the very best. Why is the mayor and city council not demanding increased funding for our schools so that we can provide for all our kids. Woonsocket deserves to be treated better than it has been by the state of RI.
Memere June 30, 2012 at 12:51 AM
He has a lot of nerve. This guy has got to go!!!!! Our mayor has not taken a cut in pay and I do not believe that the city council has either yet all of our unions have made concessions. YOU LEAD BY EXAMPLE, GUYS!!!!!! I have been told that Mr. Ward does not live in Woonsocket ( does anyone know if this is correct?) so, of course, he does not mind our taxes going up.
JA June 30, 2012 at 04:47 PM
The BC is meeting with the unions on Thursday, July 5th. They will lose plenty and that you can take to the bank.
Still Hope July 03, 2012 at 04:42 PM
Thank you for that Memere. So why do you there was such a push to remove Menard from office? Leo Fontaine and his underlings led the charge to oust the former mayor. Aren't we just getting what we deserve now? You pinch the penny hard enough and eventually it pinches back.


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