The City of Providence has announced its priorities for the legislative session that starts at the Statehouse Tuesday. Among them are plans to shore up more cash to cover the millions of dollars the city owes in funding for its schools, and measures meant to entice developers to build more housing.
Schools
When a judge ruled last year that the city of Providence needed to pay more money to fund its school system, which remains under a state takeover that began in 2019, Providence Mayor Brett Smiley said it left a shortfall of about 15 million dollars in this year’s budget, and millions more in the years to come. To make up that amount, the mayor is hoping legislators will introduce several bills for him.
One bill would lift the 4% cap on the amount that the city can raise its property taxes this year. The proposal does not include a maximum. The mayor said he is not yet sure how much he would like to raise property taxes and that it depends, in part, on how much levy growth there will be based on the semi-annual property tax revaluation. He said he will have that information in a few weeks.
Another of the bills would require private parking lot owners in the city to charge a 7% sales tax. It would not affect metered parking.
Also related to the schools, the mayor is hoping to firm up the takeover’s end date to July 1 of this year. Previously, the state had promised it would return the schools to local control within 2.5 years. Smiley said he thinks there is “strong appetite in the legislature,” but that he is “anticipating some pushback from the Department of Education.”
And finally, Smiley wants to change Rhode Island law to more specifically state how much funding municipalities must contribute to their schools in the case of a state takeover. He is suggesting that the law should require cities to contribute at least 20% of their annual levy growth during the period of a takeover.
Smiley said that law would not affect how much Providence owes during this current takeover.
“We’re trying to take the opportunity of having lived through the crisis to fix this law for the next time, whoever that might be,” he said.
Housing
Mayor Smiley wants to amend a state real estate tax credit program capped at $15 million in tax credits for development projects to allow construction materials to be subsidized separately. He says this will allow the Superman building’s developer to meet its funding gap and finally finish the more than decade-long project to convert the building into housing.
“If this building sits vacant for another decade, it will continue to do meaningful harm to Providence, and particularly downtown Providence,” he said.
And finally, the city wants the state to amend the state’s 8-law rule. The 1995 rule was intended to spur affordable housing by offering a tax break to property owners with units that are either rent or income-restricted, but it doesn’t include requirements on the percentage of units that must be restricted. That’s led to contention over whether commercial developers receiving the tax break, like Arnold “Buff” Chace, are providing enough affordable housing.
[DISCLOSURE: Chace and his firm, Cornish Associates, are long-time supporters of The Public’s Radio.]
The city wants the state to require developers claiming tax breaks under this rule to have 40% of their units have a rent cap of 80% of area median income (AMI). However, in a change from the city’s proposal last year, developers would be able to claim the tax breaks on all units in a development, regardless of whether or not they are affordable.
The law, if revised, would also, for a period of 20 years, offer tax breaks on commercial properties transformed into residential buildings, whether or not those buildings contain affordable units.
To read more about the city’s 2025 legislative goals, click this link.
[EDITOR’S NOTE: This story has been updated to include clarifications on Rhode Island’s 8-law rule.]
