Council hears suggestion to drop East Providence's tangible tax rate
EAST PROVIDENCE — The interests of local businesses and the overall economic development in East Providence converged a bit Wednesday night, Feb. 26, during a special City Council session.
Phil Tirrell, the well-known area realtor speaking on behalf of the East Providence Chamber of Commerce, asked the Council to delve into the possibility of decreasing the city's tangible tax rate from its current $56.25 per $1,000 to something more in line with similar sized municipalities and competitors for businesses like Warwick and Cranston.
Saying he wanted East Providence to "become the entrepreneurial capital of Rhode Island," Mr. Tirrell said in his capacity as a real estate salesman and on the Chamber he has had heard from prospective business owners that the relatively high rate, which is second on the list of Rhode Island cities and fifth overall, is seen as a deterrent to moving or opening new branches in East Providence.
Only financially-stressed Central Falls, among cities in Rhode Island, has a higher tangible rate ($73.11) than East Providence. Three towns have higher rates as well. North Providence follows Central Falls overall at $69.41, Smithfield's is $61.06 and Johnston comes in at $59.22.
The potential loss in revenue to East Providence due to the decrease in the tangible rate would have to be made up for somehow in the current city budget, Mr. Tirrell conceded.
After crunching some numbers with City Assessor Steve Hazard, Mr. Tirrell said if certain small businesses, for instance, were given a tax exemption up to the first $25,000 of its tangible property then it would create a hole of some $400,000 in the budget as it is currently constituted. Allowing for all businesses to have the same exemption would create a roughly $1.5 million shortfall.
Mr. Tirrell stressed, though, the possible increase in property taxes accrued through an influx of new or relocated businesses, as well as the potential boon to the housing market and ancillary spending of employees around the city, could offset any gaps in the budget.
For the sake of comparison, Providence's tangible tax rate is $55.80 per $1,000, Warwick's is $39.58 per, Cranston's $34.26 per and Pawtucket's is $52.09.
It should be noted each of those municipalities has higher or significantly high residential rates than East Providence's current $25.21 per $1,000. Providence's is $36.75, Warwick's $29.68, Cranston's $34.26 and Pawtucket's $30.88.
A bit later in the meeting, City Planner Jeanne Boyle and the City's Economic Development Planner Jim Moran acknowledged hearing similar sentiments from business owners about East Providence's tangible tax rate and agreed the Council, city manager and finance director should research the matter further.
Ms. Boyle and Mr. Moran did so as they offered the Council an updated economic development presentation.
Mr. Moran told the Council the city's unemployment rate, which in recent years reached a high of 14.3 percent, has dropped to 8.9 percent, below that of the state, according to the latest figures released by the Rhode Island Department of Labor and Training and is likely to dropped even further with reasonable job growth anticipated for the rest of 2014.
Ms. Boyle said a new and improved website for the city is expected to come on-line soon after her department worked with City Information Technology Director Kelly Ahrens and its service provider. Ms. Boyle expressed her confidence East Providence "is going to have one of the best websites in the state when we're through." The new site is modeled after other municipal internet locations, Ms. Boyle specifically pointing to that of Boulder, Colo.
In addition, Ms. Boyle said the city has received good feedback from monthly forums it holds with business leaders and expects those to only grow in their importance. She said she continues to hear appreciative words about the sense of cooperation between the departments in the city, which gives comfort to owners and operators. She also expressed her desire to do more outreach with minority business owners, one of the fastest growing and most untapped segments of the economy.
Ms. Boyle also briefed the Council on the status of some significant construction projects in the city. Work on Wampanoag Meadows, the former site of a sand-and-gravel pit off Wampanoag Trail, is expected to commence in late spring. Some 300 apartments, grouped among 15 separate three-story buildings, would be rented at market rates.
Also of note, Ms. Boyle said the first phase of construction at the Kettle Point site on the waterfront is moving towards a late 2014 start date. Some 200 housing units along with commercial space would be the first to be built.