Rhode Island Gets Honorable Taxation
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Property Tax 
Are you paying more than your fair share?

 

4. How to assure that tax limits don't become targets.

Town councils and managers are faced with an enormous challenge, especially today with a troubled economy both nationally and locally.  The revenue problems are unprecedented yet the needs remain - we need good schools, good roads, fire and police protection.

On the one hand every effort is made to control spending. Not too long ago the Assembly passed S 3050 which limits the growth of tax levies to an annual 4% by 2013. If we keep well below the limit it's a good thing for the citizens.  It means however that the following year any increase will be based on a smaller number than it could have been had the town increased to the limit.

The limit then might become the goal.  Not in the best interest of the tax payers.

We suggest that towns be able to "bank" unused increases for a fixed period to be used if and when needed. Massachusetts has a similar provision in its tax law.

For example, if a town is entitled to a 4% increase or $1 million dollars but holds the levy increase to 2%, or $500,000, the town could "bank" the difference, $500,000 which would then be available in future years.

A town would thus have the incentive to keep budgets as lean as possible but, if the 4% limit based on that prior year's lower budget proved inadequate, they could use their 'banked' revenue. And towns won't have to spend money to sue in a Caruolo action.

Details will need to be worked out by legislators, such as how many years of excesses will be available. Let's not punish towns tomorrow for holding the line on spending today.  

 

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Rhode Island Gets Honorable Taxation
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Harvey Waxman
73 Wright Lane
North Kingstown, RI 02852