I think it’s irresponsible of us to raise taxes any more than we have to.”

Keith Hamilton, Portsmouth Town Council

PORTSMOUTH — After debating a course of action when $96,000 more in state aid fell into the school district’s lap, the Town Council Monday night voted 5-2 to approve a total spending plan of $71.52 million for next fiscal year.

The new tax rate, which goes into effect on July 1, is $12.782 per $1,000 of assessed value on both residential and commercial property. That’s about $2.87 lower than the current rate of $15.65, but only because the recent revaluation has sharply increased most property values throughout town. The total property levy on residential, commercial, and tangible property has increased by about 3.76 percent to $61,904,267, which is under the 4-percent state cap on spending increases.

A resident who owns property valued at $500,000 should expect to pay $6,391 on their taxes in the 2023-2024 fiscal year.

In April, the council voted to provisionally lock the tangible tax rate at the current $15.65 for next fiscal year. The action was intended to give tax relief to residential homeowners who saw their property values increase much higher than others under this year’s revaluation. Before locking the tangible tax rate, the tax rate rate for both residential and commercial property under the provisional budget was $12.865, about 8 cents more than the adjusted rate.

Local officials knew there was a chance the school district may be getting more state aid than what had been accounted for in the provisional municipal spending plan, and it became official when Gov. Daniel McKee signed the Rhode Island budget into law on June 16: Portsmouth will be receiving an extra $96,116 in state aid to schools.

So, what to do with those funds?

Council members  Keith Hamilton and Charles Levesque both put forth proposals, but in the end it was Hamilton’s idea that prevailed.

Hamilton proposed reducing the local appropriation to the school department by $96,116, and increasing the town’s capital reserve fund by the same amount, bringing it to $171,116. 

Levesque suggested increasing the local appropriation to the school district by $96,111, which would have increased the residential and commercial tax rates by 2 cents, putting it at $12.802. Ultimately, Levesque made a motion that the council implement both his and Hamilton’s ideas — which would have meant a 2-cent hike on the tax rate as well as $96,111 more in the capital reserve fund.

Levesque said he was concerned about the school district losing federal dollars to help students who are lagging behind due to COVID-19. “In the school department’s budget, an account was essentially zeroed out that was federal aid,” he said. While he couldn’t tell the school district how to spend the money, he hoped it would be for those students who are struggling because of the pandemic, he said.

Hamilton, however, said he wanted to keep the tax rate in line. “I think it’s irresponsible of us to raise taxes any more than we have to,” he said. 

The school department is still getting more state aid, he noted; his proposal simply lowers the town appropriation. “It’s a shell game,” he said.

In addition, increasing the town’s capital reserve fund by $96,116 allows the council to manage the money if it’s needed for an unanticipated expense — such as if a school boiler blew up, or an especially severe storm hit the area, he said.

‘Compounds the problem’

Emily Copeland, who chairs the School Committee, made a plea for not reducing the town appropriation, which she said just “compounds the problem.” The district is working on bond projects, and is expected to face another $250,000 in state aid cuts next year, she said.

“Do we have to have it? Is it a crisis? No, but it would be really nice,” Copeland said.

Hamilton responded that under his proposal, the council would still have the flexibility to release those funds back to the schools if the district is running short.

Again, Levesque said he wanted the extra funds to go directly toward helping struggling students. “It might help the buildings, but it’s not going to help the kids,” he said.

A motion by council member Leonard Katzman to adopt Levesque’s idea failed in a 5-2 vote, with those two members voting in favor. Hamilton’s proposal was then approved 5-2, with Katzman and Levesque voting against.