Tuesday, June 22, 2010

"Providence Property Taxes"

Regarding The Providence Journal's front page on Monday, "Steep Drop in Value" about Providence's revaluation there are several statements which are misleading or should at least prompt questions. Here are some.

1."A potential 30% drop in the city's ... assessed property value ... could mean a significant loss of revenue" makes no sense. If the total value goes down the rate will compensate to provide the needed tax levy. The strength of the property tax is that it always produces the revenue. It's simple math.

2. "Cicilline has pledged not to raise the property-tax levy — the total amount the city raises in property taxes — over this year’s $274 million." The article then goes on to say that he has not ruled out an increase in the tax rate. It's simple math once again. If the levy remains the same but values have dropped, the rate MUST go up or the money raised must be less. Unless he has found a way to bring in more revenue from other sources.

3. With regard to Finance Chairman John Igliozzi's comment regarding the redistribution of taxes resulting from the revaluation, "The values are being reset to what they should be", how do we determine "what they should be"? Since we have accepted that market values shall determine our taxes then we have to accept that they are what they should be according to what the market says. But.

I share Mr. Igliozzi's concern when our housing market shifts the burden from poorer areas to wealthier ones. However, his gratitude when the shift is back in the opposite direction is misplaced. He must realize that it will shift back again one day. That's how markets work.

It is this reliance on markets that must be corrected and I have been trying hard for the past several years to do just that. Please visit http://righttax.org.

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