Meet Providence’s $6 million city councilman
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.