December 21, 2014
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Taxed more and paying less

This is not a misprint: Mayor Scott Avedisian proposes raising property taxes, but many Warwick taxpayers would actually end up paying less, if the City Council approves his $279.7 million budget.

The council was set to act on the budget last night and, as of press time, sources were saying it would be approved pretty much as submitted.

The possibility that many people may actually end up paying less in taxes this year arises from the mayor’s plan to increase the motor vehicle exemption that he and the council virtually eliminated last year to raise about $8 million in revenue. The exemption was cut from $6,000 to $500, prompting an outcry for citizens and spawning the Car Tax Revolt headed by resident Rob Cote.

Entering the budget process this year, the mayor proposed restoring $1,000 of the exemption, meaning a $34.60 savings to those people owning a vehicle worth $1,500 or more. During Thursday’s budget hearing, Avedisian realized the line item on police holiday pay was an error and that the amount budgeted was actually twice what was needed, which amounted to $220,500.

In an interview yesterday, Avedisian said he thought it possible that the exemption could be increased to $2,000, provided another $150,000 in savings could be found.

That money will come from cuts in postage amounting to $10,000 and funds budgeted for arbitration with unions representing fire, police and municipal employees. Those all added up to the $346,467 needed to increase the exemption from $1,500 to $2,000.

How might that add up to a homeowner paying less in taxes when the mayor’s budget also proposes increasing property taxes? The resident rate would increase by 45 cents to 18.14 per $1,000 of valuation.

Based on an average home value of $208,000, the residential rate equates to $93.60 increase in taxes. If the motor vehicle exemption is increased by $1,500, taxpayers will see a $51.90 drop in taxes for every car valued at $2,000 or more. Therefore, if a homeowner owns two cars worth at least $2,000 each, their motor vehicle tax bill would be cut by $103.80. Overall, therefore, they would be paying $10.20 less in taxes.

Why not apply the budget reductions to the property tax rate, rather than the motor vehicle exemption?

“There’s a bigger impact on the car tax … it seems to me a better way of doing it rather than a couple of cents on the tax rate,” Avedisian answered.

Every 10 cents on the residential rate, which triggers 15 cents on the commercial rate, generates about $1 million in revenue. Therefore, cutting $346,467 from the budget would reduce the residential rate by about 3 cents per $1,000.


Comments
4 comments on this item

If you own a $208,000 house and one car worth more $2000 your taxes are going to go up. Why didn't you frame the article that way.

This paper sucks up to the mayor so much its pathetic. How about doing your jobs as journalist and give a much more fair and balanced report. You consistently let the taxpayers down.

This mayor is David Cicilline all over again. He does nothing to cut costs and attacks the working class in the city to provide for the outrageous benefits package the corrupt politicians and unions negotiated in closed doors. This mayor is as anti working class as they come. Watch out, he is David Ciccilline wanna be. OUr taxes will be heading to 35% too under this mayors leadership. He is weak and continually caves into the unions on the backs of the working class. We need someone like Gov Walker to provide leadership for the taxpayers, not someone like this mayor who is constantly beating us down.

My taxes are going up because I own 1 car and 1 house...plus I am driving a vehicle over 10 years old that up until last year was exempt from the auto tax....Did I mention that my 15 year old vehicle was valued at over 4000.00 for retail value when in fact I sold it this year for 700.00 it's actual worth. So according to this math, my taxes are going up on both ends, property and vehicle...oh but at least I know I can expect the vehicle tax bill this year and budget for it...unlike last year when I received my first auto tax bill in 15 years and had 15 days to find the money to pay it or be charged interest and feesl BTW that payment came out of my food budget as I as it was a 52.00 payment that was due. Single mother living on 26k per year, paying health insurance, mtg and other bills without any assistance. Maybe this is a small increase to most, but everything continues to go up except my income. The thing that kills me is I have to continually find budget cuts in my household as my income stays the same...which begs the question why can't the city and state do the same?

John- always writes great stuff about the Mayor. It's the Mayors best form of Propaganda,keep up the great work misinforming the pubic John.

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