I guess my biggest problem is there isn’t a clear causality from having the TSA (tax stabilization agreements) and reaping these benefits.”

Linda Ujifusa, council member

PORTSMOUTH — A program that gives tax breaks to businesses that either relocate to Portsmouth from outside Rhode Island or expand their existing operations here will not be extended past its June 2018 expiration date.

The Town Council Monday night voted 4-3 against implementing the revamped Tax Stabilization Ordinance, which would have made businesses that relocate or expand here eligible for a 100-percent property tax exemption in the first year of the five-year program. The business would receive tax exemptions in subsequent years of 80, 60, 40 and 20 percent. The full property tax would be assessed after the fifth year unless exempted by a separate action. 

The proposal was similar to the town’s current tax-subsidy plan, except it applies to commercially zoned properties in the entire town and not just the enterprise zone which is primarily the west side of town. Another new facet is that each business would have to make the request for tax relief to the Town Council, in a public hearing before Planning Board review. 

Richard W. Talipsky, the town’s director of business development, spoke in support of extending the program and presented data purporting to show how the town has benefitted. 

He said that all 50 properties which joined the program since 2008 were still on the tax rolls. Even with more than $465,000 in total tax exemptions, the town has reaped about $573,000 in direct revenue over the decade, he said.

Bill Clark, the town’s former business director, also urged the council to support the program. “It’s a piece of the town saying, ‘We’re business-friendly,’” he said. “What are the benefits? We’re getting positive, tax-revenue dollars, which we don’t get from our residences.”

Local resident Ben Furriel spoke out against extending the program, saying he believes the benefits outlined by Mr. Talipsky were overstated because there’s no way to determine whether the plan was the sole reason a business chose to relocate or expand here. 

“We run the risk of getting liquored up at the thought of almost $600,000 in free money,” he said. “When you calculate this return, there’s no chance it’s as large as advertised.”

Mr. Furriel also said the idea of the council hearing each request for tax relief on a case-by-case basis could put the town at risk of a lawsuit “when we’re trying to pick winners and losers.”

Another resident, John McDaid, spoke in favor of the program. “I think it is important as a taxpayer of this town that not all the tax burden fall on residential properties,” he said.

Mr. McDaid added that the program is primarily for small businesses and that it makes “good economic sense” to give them a tax break. “You’re not going to bring GE to town,” he said.

Not convinced

The majority of council members, however, weren’t convinced that the tax stabilization program was the sole factor in a business’ decision to relocate or expand here. 

“I guess my biggest problem is there isn’t a clear causality from having the TSA (tax stabilization agreements) and reaping these benefits,” said council member Linda Ujifusa, who voted against the measure.

Council President Keith Hamilton, who supported the program, said it’s needed to help retain current businesses in town. 

“Fall River comes down here on a regular basis to try to pull businesses out of here,” said Mr. Hamilton, adding that the city is “actively shopping” its own tax stabilization plan.

Voting in favor of extending the tax-subsidy program were Mr. Hamilton, Kevin Aguiar and David Gleason. Voting against were Ms. Ujifusa, Paul Kesson, Elizabeth Pedro and J. Mark Ryan.