September 17, 2009
How Regressive is Rhode Island's Current Property Tax Structure, Revisitied
Pawtucket Mayor James Doyle's op-ed from Tuesday's Projo provides a good occasion for revisiting the topic of the supposed regressiveness of Rhode Island's property tax structure. Mayor Doyle would like to see more state aid and less "reliance" on the property tax for funding education in Rhode Island…
The state has also shunned its responsibility to properly fund education. Rhode Island is the only state without a fair and predictable education formula, and ranks among the nation’s highest for relying on local property taxes to pay for education.Keep the idea that it's "reliance", and not "use of", that the Mayor would like to see reduced.
The table displayed below is an updated version of the table presented originally in July, where the amount of property tax that Rhode Island cities and towns collect from their residents as a percentage of income was estimated. In response to the original result, commenter "John" pointed out that Rhode Island' classifies apartment buildings as "commercial" properties, meaning they are not included in the "residential" levy figures and therefore that official "residential" levy figures do not include the total amount of property tax collected from a municipality's residents. For some communities, the additional amount can be significant.
To correct for this concern, I used 2007 municipality-by-municipality valuation data provided by the Rhode Island Office of Municipal Affairs, which includes the total valuation in each property classification category used by the state of Rhode Island; by multiplying the valuations in the "apartment" and "combination" (i.e. mixed residential and commercial) categories by a municipality's commercial tax rate, and adding the result to the official residential levies, better estimates of the total amount of property tax levied on residents by municipal governments can be obtained.
The inclusion of the "apartment" and "combination" categories in a "residential" levy does pull a number of communities near the bottom of the original list towards the middle...
| Municipality | Total Community Income (2007 ACS) | "Residential" Tax Levy (2007 Muni Afrs.) | Est. "Apartment" & "Combined" Tax Levy | Res + Apart + Comb Levy as % of Income |
| Westerly | $736,318,944 | $49,194,534 | $1,003,130 | 6.8% |
| South Kingstown | $902,219,848 | $52,242,106 | $1,547,292 | 6.0% |
| Chariho(R) | $753,927,104 | $43,614,470 | $755,162 | 5.9% |
| Newport | $743,149,136 | $40,355,194 | $2,962,691 | 5.8% |
| Johnston | $793,255,802 | $41,208,491 | $1,799,035 | 5.4% |
| Cranston | $2,143,969,940 | $101,633,398 | $7,922,334 | 5.1% |
| North Kingstown | $1,066,793,770 | $50,529,940 | $1,544,002 | 4.9% |
| West Warwick | $780,349,600 | $33,119,054 | $3,698,454 | 4.7% |
| Coventry | $1,045,810,920 | $46,659,667 | $1,570,195 | 4.6% |
| Bristol/Warren(R) | $979,570,240 | $43,443,793 | $1,491,611 | 4.6% |
| Providence | $3,419,209,140 | $126,320,027 | $27,489,420 | 4.5% |
| Warwick | $2,563,100,925 | $105,379,974 | $9,610,825 | 4.5% |
| Smithfield | $627,377,590 | $27,295,469 | $583,537 | 4.4% |
| North Providence | $932,747,152 | $34,525,710 | $4,767,002 | 4.2% |
| East Providence | $1,240,282,560 | $44,567,063 | $4,929,768 | 4.0% |
| Cumberland | $1,062,425,700 | $40,650,687 | $1,399,975 | 4.0% |
| Lincoln | $750,233,679 | $26,341,821 | $1,532,767 | 3.7% |
| Pawtucket | $1,508,546,425 | $47,200,154 | $7,871,267 | 3.7% |
| Woonsocket | $918,048,573 | $23,083,073 | $6,554,922 | 3.2% |
Pawtucket remains in the next-to-last slot (now tied with Lincoln). Pawtucket is also a big state education aid recipient, one of 4 communities in Rhode Island (counting Central Falls, which is funded almost entirely by the state) receiving over $6,000 per-pupil from state government.
So, unless Mayor Doyle would, for example, advocate cutting his own city's already low-as-a-percentage-of-community-income property tax in response to receiving additional state aid, i.e. use the additional aid to replace revenue instead of to improve education, how can his call to "reduce reliance" on the property tax lead to anything other than a system where state taxes are raised without local property taxes being cut?
The date for the calculation of the apartment/combined use levy is below the fold.
| Municipality | "Apartment" Assement | "Combination" Assement | Commercial Tax Rate | Est. "Apartment" & "Combination" Tax Levy |
| Bristol | $33,670,494 | $50,218,172 | $10.35 | $868,248 |
| Charlestown | $4,807,900 | $29,273,500 | $7.16 | $244,023 |
| Coventry | $49,361,000 | $34,922,160 | $18.63 | $1,570,195 |
| Cranston | $275,490,900 | $68,808,700 | $23.01 | $7,922,334 |
| Cumberland | $77,872,572 | $35,211,000 | $12.38 | $1,399,975 |
| East Providence | $215,110,500 | $44,214,500 | $19.01 | $4,929,768 |
| Hopkinton | $12,907,700 | $16,346,100 | $14.50 | $424,180 |
| Johnston | $65,151,100 | $29,985,594 | $18.91 | $1,799,035 |
| Lincoln | $52,641,700 | $19,932,500 | $21.12 | $1,532,767 |
| Newport | $122,208,690 | $106,924,410 | $12.93 | $2,962,691 |
| North Kingstown | $71,386,100 | $40,255,400 | $13.83 | $1,544,002 |
| North Providence | $167,075,300 | $42,924,800 | $22.70 | $4,767,002 |
| Pawtucket | $285,997,500 | $90,978,900 | $20.88 | $7,871,267 |
| Providence | $595,076,911 | $386,688,100 | $28.00 | $27,489,420 |
| Richmond | $0 | $6,076,800 | $14.31 | $86,959 |
| Smithfield | $25,453,500 | $17,202,700 | $13.68 | $583,537 |
| South Kingstown | $91,991,900 | $37,272,300 | $11.97 | $1,547,292 |
| Warren | $21,795,560 | $25,789,430 | $13.10 | $623,363 |
| Warwick | $405,994,100 | $71,681,100 | $20.12 | $9,610,825 |
| Westerly | $37,301,500 | $75,790,900 | $8.87 | $1,003,130 |
| West Warwick | $143,751,400 | $34,803,790 | $3,698,454 | |
| Woonsocket | $186,322,287 | $17,499,927 | $32.16 | $6,554,922 |