Mayor’s budget raises residential tax rate by 45 cents
While Mayor Scott Avedisian finds Warwick has “weathered” the prolonged recession better than many communities, his proposed $279.7 million budget asks homeowners to dig deeper into their pockets and come up with an additional 45 cents per $1,000 of property valuation.
The proposed tax rates are $18.14 per $1,000 of valuation for residential, $27.21 for commercial/industrial and $36.28 for tangible.
Based on an average home value of $208,000, the 2.5 percent increase, if approved by the City Council, would mean an additional $93.60 in property taxes. However, the mayor’s budget also proposes increasing the automobile exemption from $500 to $1,500, which will mean a savings of $34.60 on all cars valued at more than $1,500.
In his budget message, Avedisian says the plan aims to tweak the “mix of motor vehicle, residential and commercial rates in order to more equitably distribute the tax burden while assuring that we continue to provide quality municipal services.”
The “take some and give back a little” plan already has its critics.
Last Wednesday, when the mayor announced his proposal to restore $1,000 of the $5,500 motor vehicle exemption he and the council stripped away last year to raise $8 million, Councilman Joseph Solomon said the exemption was not enough. He wants more in exemptions and he’s likely to also want less in taxes, although he could not be reached for comment yesterday.
Ward 9 Councilman Steve Merolla said yesterday he didn’t feel prepared to comment on the budget, but he did have something to say about the increased motor vehicle exemption.
“I think it’s a joke; I don’t think it ever should have been lowered from $6,000,” Merolla said. “How can you take away something and give it back and declare it new?”
As of last week, there was still some uncertainty to the budget.
Two aspects of the budget – contract agreements with the city’s three unions and a contract for health care – expected to be finalized this week, could change the final numbers, Avedisian said in an interview Thursday. Overall, contract agreements are expected to lower costs as municipal employees take on a greater percentage of health care co-payments. As for health care administrative costs, the administration was still reviewing bids and possible options.
The budget recommends no salary increases and would level fund schools at $156.2 million.
Yet, the mayor is looking to increase city spending by $5.8 million. That amount is certain to get the close scrutiny of the council as it starts the budget review process on May 29. A major chunk of the amount – $3.9 million – is in employee benefits and capital expenses. This reflects increased payments to account for revised pension assumptions, such as mortality rates and income projections that follow those adopted by the Rhode Island Municipal Employees’ Retirement System.
“Warwick tried to be in the forefront on doing the appropriate thing,” Avedisian said.
That’s not enough for Merolla.
“We’re just kicking the can down the road; health care and pension costs will come home to roost,” he predicted.
“Someday he’s [Avedisian] going to leave and we’re going to get stuck like Providence.”
Merolla didn’t have a solution other than increasing savings and revising employee contracts. He said the “elephant in the room” is health care costs for retirees, not pension benefits.
“It’s a real disaster,” he said. “It’s a shame no one is picking up on it.”
If there is a gamble in the budget, it’s the mayor’s plan to reduce firefighter overtime. Overtime costs this year are projected to be $3.4 million. That would be shaved to $1.6 million in 2013 with the addition of 21 firefighters to fill retirements and new slots. The mayor is counting on approval of a federal grant to pay for eight of the additional workforce and bring the force to a complement of 217.
Avedisian justifies level funding schools on grounds that more than half of the department’s proposed increase in city funding is attributable to fire code and building improvements. He recommends that the City Council authorize the borrowing of voter-approved general obligation bonds to do the work.
He also recommends the city replace five aging sanitation trucks through lease-purchase at an added cost of $1.2 million.
City Finance Director Ernest Zmyslinski said there was minimal growth in the tax base – about $2 million – and that reductions in values due to the March 2010 flood have been restored now that businesses and the Warwick Mall are back and running.
Looking ahead, Avedisian painted a bright picture.
In his budget message he writes, “despite the financial challenges we face, as we enter a new fiscal year there are signs of optimism.” The mayor points to improved state revenue projections, potential development of the Warwick Station Development District; village district zoning in Apponaug and Conimicut; grants received by the Fire Department and recognitions won by the city and its employees He also thanked the residents and businesses of Warwick for their “remarkable sense of community.”