A Taxing Question
Nearly 40 percent of all property in Providence is tax exempt. But should it be? This week we ask the question: Should tax exemption be based on use - not just ownership. Jim Hummel takes a look at properties in Providence that are unused or underused, but still enjoy tax exempt status. And we check in with one community that is now receiving hundreds of thousands of dollars in new tax revenue from a formerly tax-exempt institution.
These 19th-century houses on the East Side of Providence have been vacant for the better part of the last decade, their owner allowing the property to degenerate into this.
Despite that they are still assessed at $338,000 and $407,000. But the owner pays no property tax.
That's because the owner is Brown University - which by law is exempt from paying property taxes, along with all the hospitals and churches in the city. In fact, an estimated 40 percent of the property in Providence is tax exempt.
Mayor Cicilline: ``It's currently very out of balance. When those tax exemptions were afforded to the colleges and universities - most of those institutions were a single building. Today Brown University owns real estate value in excess of a billion dollars.''
Tony Demings, who owns a business on Douglas Avenue says tax exemption should be based on use - not just ownership. Every day he looks at a vacant lot that Times 2 Academy charter school bought - and took off the tax rolls - five years ago, but has never used. Demings also wants to know why Brown shouldn't be paying the thousands of dollars in taxes that a private citizen would have to, just because the university owns these houses.
``It's a vacant building, next building is a vacant building. Been closed for many years also tax exempt. Now I want to know if the buildings are not being used, are they land banking this?''
In fact, this house and eight others are part of a program called `Brown to Brown' housing - which makes these properties available to faculty or staff who want to buy them. Problem is, nobody has, and they continue to sit vacant. We wondered - with massive state cutbacks and local communities struggling to balance their budgets, whether any are actually looking at the issue of use versus ownership.
Hummel: ``The answer is yes, and you only have to go 10- miles down the road, to Barrington, to see how.''
This historic building is owned by Zion Bible Institute, which had been a presence in town for 25 years. The property is assessed at $17.5 million. But Zion moved to Massachusetts in 2008, leaving its 37-acre campus behind. And that caught the attention of town officials.
``If they're going to leave town are they going to take their education use and exception with them? Our impression is they have and they did.''
Town Manager Peter DeAngelis says his tax assessor last year sent Zion a letter saying a tax bill for $140,000 would soon be on its way. Zion did not initially respond to the letter.
Hummel: ``The tax bill got their attention did it not?''
DeAngelis: ``It certainly did.
Hummel: ``But the paid it.
DeAngelis: ``They have paid it in full.
After a recent revaluation, that tax has increased to $172,000. That's a total of more than $300,000 the town wouldn't have had otherwise - and may be an example for other communities.
What about other properties like this one, owned by the Roman Catholic Church. Assessed at $1.2 million, the former Carter Day Care Center is now up for sale. But what if it doesn't move for a year or two. Should it be taxed until it does?
Providence Mayor David Cicilline says the answer may lie at the General Assembly.
``I think when you have property that is not being used in furtherance of that mission, it should not be afforded the tax exemption.:
Hummel: ``Seems the message you're saying is: It's not just that you own it, it's how you use it, is that right?''
DeAngelis: ``That's our interpretation of the law, yes.''
Hummel: ``And you feel pretty solid on that?''
DeAngelis: ``We do, or we wouldn't have sent the tax bill.''
Jim Hummel, for The Hummel Report.