City Proposes 2.47 Percent Tax Increase

By Tom Shevlin

NEWPORT – A pair of enterprise funds are being eyed to help blunt the need for potentially harmful tax increases in next year's budget.

The proposal, which recommends that the city transfer the beach and parking funds back into the city's general operating scheme, is one of the key provisions found within City Manager Jane Howington's FY2013 budget draft released on Tuesday.  

According to the administration, rolling the enterprise funds back into the general fund, will not change the practice of treating the operations at the beach or within the parking division as separate activities, but it will bring back to the council an ability to manage them.

It also should provide a "sustainability" to the beach while at the same time eliminating the need to subsidize other funds through the parking fund.

"Incorporating these changes have enabled the staff to present a balanced budget proposal to the council which has minimized the tax levy increase," Howington wrote in a message to councilors.

Under the plan, property owners would see a tax increase of 2.47 percent – far below the maximum 4 percent allowed under Rhode Island law.

In all, the city's proposed combined expenditures amount to $115,754,174, which is a more than 15 percent decrease from last year, a reduction due primarily to the removal of capital spending attributed to the city's $30 million Claiborne d. Pell Elementary School project.

While overall spending will decrease by roughly $20 million, general fund expenditures actually increase from $81,407,687 to $83,415,150 – or 2.47 percent.

That's the same percentage increase that was proposed for FY2011-2012 budget, and actually falls below current non-commodity inflationary trends.

If the proposal is adopted, taxpayers can expect to see their property taxes, as equalized from the recent revaluation, rise to $11.10 per $1,000 in assessed value for residential property and $15.38 per $1,000 for commercial property.

The car tax, meanwhile, would remain unchanged at $23.45 per $1,000 in assessed value, with vehicles worth less than $6,000 exempt. It's also worth noting that funding commitments to the city's Other Post Employment Benefit (OPEB) program will continue to be met in full.

Look for a full report in the April 26 edition of Newport This Week.