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Municipal Government Committee Sends Woonsocket Supplemental Tax to Full House

Local reps' bill to add $2.5 million to tax base scheduled for May 22 hearing.

 

The House Municipal Government Committee sent local representatives' Supplemental Tax Bill to the full house yesterday, recommending passage, putting Woonsocket at least seven days behind its billing deadline.

Budget Commission member and Council President John Ward said ideally, the measure would've needed to pass by May 15 to give the city plenty of time to send out bills.

Should the bill, sponsored by Rep. Lisa Baldelli-Hunt, (D-Dist. 49) and co-sponsored by Reps. Stephen Casey (D-Dist. 50) and Bob Phillips (D-Dist. 51), pass Wednesday, additional time will be needed to reconcile it with the Senate version, S-0820, introduced by Senators Marc Cote (D-Dist 24) and Roger Picard's (D-Dist. 20).

Ward said the crucial thing the Senate version has that needs to part of the reconciled bill is the provision allowing the City Council to create an elderly tax exemption, fixing the amount annually.  

If the bill doesn't pass Wednesday, the House will have to consider the Senate version. If that doesn't pass either, the Budget Commission would either have to cut $5 million from the city budget, or call in a receiver, Ward said.

The supplemental tax is among the most potent in the array of tools the Budget Commission intends to use in its 5-year plan to repair the city's chronic financial shortfalls. But all of them are necessary to make the plan work and avoid calling in a receiver, Commission members say.

Several officials and experts have noted the wisdom of avoiding receivership. In the least dire forecast of a receivership, officials including Ward and Mayor Leo Fontaine said a receiver would pick up the 5-year-plan from where the Budget Commission left it — leaving opponents to that plan no better off.  

During a speaking engagement for the Woonsocket Taxpayers Coalition last April, Central Falls Receiver Robert Flanders said receivership would not save citizens from a tax increase. In Central Falls, Flanders imposed a supplemental tax of 19 percent, followed by 5 years of 4 percent increases.

During a hearing with Woonsocket pensioners in February, Director of Revenue Rosemary Booth Gallogly warned bankruptcy would also be worse for them than the alternative. "In Central Falls, the payments were cut up to 55 percent," Gallogly said. 

Nelson Aldrich May 17, 2013 at 04:27 PM
Reading between the lines...the reason there won't be a difference between a reciever and the budget commission is bondholders have to get paid first in RI. It doesn't take much to figure out that this arrangement makes them virtually immune to any "bankruptcy". If you think you've been had by the unions, don't forget that you've been had by investors too. It's much the same as leaving a credit card company off the hook in an individual bankruptcy or a corporate bankruptcy. By letting investors off the hook for their bad bets (which takes the risk out of the system) taxpayers have been turned into peasants. Just remember everyone...it's the risk that's supposed to keep the system honest. They throw money at communities without risk, pretty much making it impossible for a community to live within it's means...especially in hard times. This may change in Detroit soon, but it won't help in RI.
Rob Borkowski (Editor) May 17, 2013 at 04:32 PM
Hi, Nelson - While I understand your point about the bond holders, the article reports there "may" be no difference between the Budget Commission and a receiver - some predict there will likely be a very big difference between them, but not in the taxpayers' favor.
Nelson Aldrich May 17, 2013 at 04:37 PM
I stand corrected, just trying to explain that there's more to this picture than meets the eye.
Paul Sweeney May 18, 2013 at 12:44 AM
If I hit the lottery Sat. I'll give the city 15m. But, I want to sign the checks. And get someone to run the city Right.
David T May 18, 2013 at 01:45 AM
By the way, what ever happened to Steve Casey and and other Reps and their promise to stay connected with us via social media like face book? So much for that. One of them really needs to change that bond holder law.

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