By Elizabeth F. McNamara
The Town Council voted 4-0 Monday night in favor of a resolution seeking permission from the General Assembly to move to a tiered tax rate. Council President Mark Schwager was absent.
Traditionally, East Greenwich has kept tax rates for residential, commercial/industrial and tangible property* the same ($23 per $1,000 assessed value for all categories this year).
By state law, municipalities can only consider tiered tax rates in a revaluation year. East Greenwich does revaluations every three years, the last one in 2018, so it would need General Assembly approval to move to tier designations this year. The vote Monday does not change EG policy toward tax rates, Council Vice President Mike Donegan said. Instead, it gives the council permission to consider making such a change, should the General Assembly grant approval.
Donegan sees moving to a tier tax rate as aiding residents.
“I don’t see how that’s fair to residents,” he said of the current system. He used the example of National Grid, which has $18 million worth of tangible property in East Greenwich. If that was taxed at, say, $33 instead of $23, the town would get an additional $180,000 that could be used to offset residential rates.
In 2018, 22 out of Rhode Island’s 36 cities and towns had higher tax rates for commercial/industrial, personal property or both. Find the list here.
EG Chamber of Commerce head Steve Lombardi told the council he was speaking on behalf of small businesses in town – which, he reminded them, make up the majority of businesses in town.
“They are very, very concerned about what this could mean to the small business community,” he said.
Donegan and Councilman Mike Zarrella took pains to say they did not want to hurt small business. To that end, the council added a $10,000 personal property exclusion to the resolution, which would protect businesses with $10,000 or less in personal property from a higher tax if the town moved in that direction.
However, nothing will happen unless the state gives its approval. If that happens, the council could take up moving to a tiered tax rate in the course of budget talks this spring during which, Donegan said Monday, residents and business owners would be welcome to express their thoughts. The 2020 budget must be approved by the Town Council by June.
* Personal or tangible property refers to a business’s belongings, including furniture, kitchen ware, machinery and, in the case of National Grid, cables and wires.
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