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Meet Providence’s $6 million city councilman

April 25, 2012

Meet the Providence politician who has become known as the $6 million man. RIPR political analyst Scott MacKay introduces him.

The leafy neighborhoods on Providence’s East Side make up one of top urban residential neighborhoods between Boston and Georgetown. These walk-and-bike friendly streets near Brown University and Prospect Park are home to some of Rhode Island wealthiest residents, according to U.S. Census data.

Yet, the wide greensward that fronts the mansions of  Blackstone Boulevard and the historic architecture of Benefit Street have long been a  façade for a form of property and car tax evasion that is not available to most middle and working class Providence homeowners and motorists.

You only have to jog  down Blackstone Boulevard or drive slowly along the manicured neighborhoods off  Elmgrove Avenue to spot Mercedes, Cadillacs and BMWS in those driveways adorned with Florida, Massachusetts or Vermont license plates to spot these tax schemers.

Many people in the Providence business and political hierarchy have known for decades about this, but nobody ever did anything. When questions were asked around City Hall, the answer was the shrugged shoulder and the usual hey whattagonnado wink? Maybe it was because these people wrote many a political campaign contribution check.

What some rich East Siders have been doing since at least the mid-1980s is scamming the city’s property tax system by claiming that their Providence houses are their primary residences, but registering their cars in other states or Rhode Island communities that levy lower car taxes than the capital city’s high rates.

Let’s say you own a mansion on the boulevard and a summer home on Block Island. The car tax on Block Island is about $9 per $1,000 of your car’s value; in Providence it is $60 per $1,000. And Block Island exempts the first $6,000 of a car’s value from taxation; in Providence that exemption is only $1,000. Let’s say you drive a $50,000 BMW. Factoring in how much each place charges per $1,000 of your Beemer’s value along with the exemptions…you are looking at about $400 in taxes on Block Island and $3,000 in Providence. So to beat the capital city’s high car tax rate, you can save a bundle of money by claiming your Block Island villa as your residence for car purposes while paying property taxes in Providence. Or you get Florida plates at the address of your winter second home and pay Providence nothing.

But then there’s Providence with its special deal for homeowners who live in their homes and swear that is their primary residence. This so-called homestead allowance cuts the real estate value in half, leading to lower property taxes. So for house tax purposes, more than a few East Siders have been claiming Providence as their primary residence while telling the DMV that their summer home is their primary residence. So they cash in on both the lower real estate and car tax rates.

Block Island is not the lone summer and second home Rhode Island playground with low car taxes, Other communities, including Little Compton, Narragansett, Newport, Charlestown and Westerly have car tax rates that are far lower than Providence.

This scam isn’t available for middle-class and working class residents who own only one house and register their car legally there.

City Councilman Sam Zurier decided to so something about this. First elected in 2010, Zurier heard many a complaint as he went door-to-door campaigning about East Siders who were not playing by the rules, not paying their share and in effect raising taxes on their less well-off neighbors. “ A lot of people didn’t think this was fair,’’ says Zurier.

So last year, Zurier pushed an ordinance through the City Council that tightened the rules and told Providence residents that they must register their cars from their Providence residence to qualify for the 50 percent real estate assessment break on their houses.

The result: Providence is projected to harvest an extra $6 million in car and real estate taxes by making people play by the rules designed by Zurier.

Says City Council President Mike Solomon, “we are now calling Sam the $6 million man.’’ Solomon said he recognized Zurier’s plan as good public policy, but says, “never in my wildest dreams did I think we could get $6 million out of it.’’

Mayor Angel Taveras also deserves some credit here. The East Side was a strong base of support in his mayoral victory, but he went ahead and signed the ordinance. Mayors Joe Paolino, Buddy Cianci and David Cicilline must have had inklings of this scheme, but none of them ever did anything about it.

Sometimes all a politician has to do is listen to his constituents. That’s what Councilman Zurier did. The average homeowner in Providence will now be a little better off because he did.

8 Comments leave one →
  1. benagami permalink
    April 25, 2012 9:11 pm

    Thank you for this one Scott. Gives me hope.

  2. April 26, 2012 12:57 am

    Do away will ALL exemptions and lower the tax rate. This archaic system has run its course. Sam is to be congratulated for pushing for this.

  3. April 26, 2012 3:20 am

    Great, 6 million is what they were looking for last budget for the car tax,now we have it,so increase
    the exemption back up to 6,000 or lower the rate down another 30 bucks

  4. tim1999 permalink
    April 26, 2012 12:28 pm

    Huh this is so out of character for you, Scotso. (wink wink)
    So protective of your politcial soulmates.

    Our current Governor was a full participant in this scheme yet you fail to name him and cite him as an example of this practice that apparently outrages you so
    In fact our current Governor went so far as to claim the homesteaders allowance on his Providence residence while registering his cars using his Exeter residence and yet at the same time was voting out of his Warwick residence during in the last election.
    (Stephie has since sold the Providnece digs. Wonder why??)

    How does Chafee’s outrageous example of the very issue you’re talking about fail to find its’ way into your story Scotso??

    How does the fact that former Providence Mayor David Cicilline lives in that neighborhood fail to make it into your story Scotso??

    You’re such a fraud Scott.

  5. April 26, 2012 4:22 pm

    Thanks All!

  6. Barbara Morin permalink
    April 26, 2012 5:31 pm

    I was complaining about having to do the additional paperwork to qualify for the homestead exemption (I do think it would be difficult for someone without easy access to a Notary, etc.), but now it all makes sense. Thanks for clarifying.

  7. Splat McDuck permalink
    April 28, 2012 11:54 am

    So will all the Providence homeowners who didn’t make it through that paperwork suddenly find their taxes spiking by default? They had to extend the deadline for proving your and your car’s residency because so few had sent it in.

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  1. RI Progress Report: ALEC, Kellogg, Zurier, Raimondo

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