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Friday, March 18, 2011

Providence City Council Creates Commission to Study Revenue Sustainability and Efficiency

The Providence City Council unanimously approved a resolution to create a “Commission to Study Revenue Sustainability and Efficiency” last night. The passage came two days after Internal Auditor Matthew Clarkin and Gary Sasse, fiscal advisor to the City Council, made a presentation recommending the creation of such a commission.

The commission is an effort by the City Council to address the tax burden on homeowners and businesses in Providence. Council President Michael A. Solomon will appoint five members to the commission, while the mayor will appoint an additional three, along with the director of administration or his designee. As stated in the resolution, commission members will evaluate the “equity, competitiveness, sustainability, and efficiency of the current tax and revenue structure and shall issue a full report with recommendations for increasing long-term investment and growing the tax base in Providence.”

“The creation of this commission is a critical step towards addressing Providence’s tax burden and understanding how we can encourage growth and economic investment through our tax structure,” stated Solomon. “In these tough economic times it is important to focus on growing the city’s tax base, instead of simply increasing taxes on the same residents, year over year.”

The resolution establishing the commission contains specific language to address the competitiveness of Providence’s revenue structure. As part of the commission’s report, members are asked to “assess the implications of the current revenue structure and compare to any and all municipal structures applicable, but namely neighboring cities of similar size to ensure competitiveness.”

Majority Leader Seth Yurdin emphasized the importance of attracting long-term investment to sustain critical government services. "The commission will look at how our city is funded, looking at all sources of revenue- taxes, fees, state-funding and contributions from non-profit institutions,” stated Yurdin. “The committee is charged with making recommendations on how to make the tax system more balanced, to expand our tax-base and to encourage long-term growth of the city."

The commission will also address the equity and predictability of the city’s tax structure. “The reality of the current revaluation system and revenue structure is that it creates a see-saw effect between different parts of the city,” said Finance Chairman John J. Igliozzi. “Every three years, a revaluation occurs which can have dramatic results for a third of the city. After a revaluation, some neighborhoods experience a dramatic shift in property taxes which must be off-set by the rest of the city,” Igliozzi explained. “This commission provides an opportunity to address the inequities and inefficiencies in our revenue structure that create an over-reliance on property taxes.”

Commission appointments are expected to be announced in the coming weeks, along with a schedule for public meetings. The commission is required to issue its findings in a report to the City Council by July 1, 2011.