The Taxman Cometh in Warwick

As mentioned last week, Warwick saw a re-run of last year's budget debate and now has a re-run of last year's budget: flat-funded schools but an increase in city-side spending = property tax increases AND (new and improved!) the (re)imposition of the car tax.

The council approved a budget of about $273.8 million and a new residential property-tax rate of $18.16 per $1,000 of assessed value. The council was able to trim 12 cents off Mayor Scott Avedisian’s proposed 80-cent tax-rate increase by substantially cutting the requested overtime budgets of almost all city departments, except for police and public works.

For the average resident taxpayer with a house valued at $168,000, the new tax rate will mean an increase of about $114. The current residential tax rate is $17.48 per $1,000 of assessed value.

The council’s budget, which passed on a 6-to-2 vote, brings higher car taxes by nearly eliminating the $6,000 exemption on auto values that was state law until last year.... The motor vehicle tax rate, which varies among communities and is locked by the General Assembly, is $34.60 per $1,000 of valuation in Warwick.

The car values are set by the state’s Vehicle Value Commission. A 2008 Toyota Corolla is currently valued at $11,275, according to city officials. A resident will now have to pay taxes on all but $500 of that value, resulting in an annual excise tax bill of about $372.82.

The other tax rates set Monday night are a commercial rate of $27.24 per $1,000 of assessed value, up from the current rate of $26.22. The tangible property tax rate will increase from $34.96 per $1,000 to $36.32.

City Councilmen Steve Merolla and C.J. Donovan (both Democrats) voted against the budget. The biggest cut made by the council was the Fire Department's allotment for overtime--which they have routinely exceeded year after year (so it's of questionable value to "cut" something that is never realistic anyway...). As mentioned, the schools were flat-funded again and will seek to cut $6 million from their budget. Merolla echoed the point oft-made by the Warwick Tea Party (download their analysis here):

The administration keeps bashing the schools for being "top heavy” and spending money, “but the School Department has been cutting costs,” he said.

Most of the tax increases in recent years are tied to bigger city salaries and higher municipal costs, he said. “At the end of the day, the kids get hurt.”

As mentioned earlier in the piece containing Merolla's comments, the School Committee have cut 150 full-time equivalent positions over the last few years. On the other hand, the School Administration didn't help themselves any by requesting a 2.75% pay increase for non-union administrative staff--no matter how deserving or how long they've gone without a raise. It just doesn't look good in these times. That being said, going forward, the School Committee does have the "benefit" of having expired contracts with both school unions (WISE and AFT), so they have an opportunity to cure many of the structural ills that contribute to these problems (health care co-pays, reform contract steps, weighting, etc.).

The city-side contracts (municipal, police, fire) expire in June 2012, so no cost-savings can (or will) be negotiated until then. There should be no confusion: the tax increases imposed upon Warwick citizens this year are a direct result of increases in city-side expenditures proposed by Mayor Avedisian and approved by the majority of the Warwick City Council.