Of Rates and Levies
This intra-conservative debate in East Providence points to one of those issues that tends to slide under residents’ awareness:
[Mayor Joseph] Larisa is now trying to solidify tax limits by putting language into the city’s Home Rule Charter. Charter amendments have to be approved by voters in a referendum, while ordinances are approved — and can be repealed — by a council majority. …
But Bill Murphy, spokesman for the East Providence Taxpayers Association, said the charter language isn’t identical to the ordinance and the changes, although “subtle,” are a “step in the wrong direction.”
Larisa has changed the limit from one on the total tax “levy” to one on the tax rate.
I’ve noted before that, in Tiverton, those who set policy treat the tax rate as entirely incidental to the levy, while in Providence, the change in tax rate has been a major fight. On one hand, focusing on the rate more closely aligns with the meaning of the tax; you’re paying based on what your property is worth, and if you property values decrease you have less wealth and should therefore pay less. On the other hand, focusing on the levy insulates the town from downturns in the market, but it also prevents the town from taking upturns in the market as well as the fruits of economic development as an excuse to grow — which could become a huge problem when the market contracts or the tax base decreases.
For the record, I’m with Murphy, on this one.