May 12, 2011

Commercial Property Tax Levies and the Non-Profit "Problem"

Carroll Andrew Morse

Here is the first of several charts I will present regarding local taxation in Rhode Island. The data on the charts is based on information submitted to the Rhode Island Division of Municipal Finance for taxes payable in the 2009-2010 fiscal year; the Division of Municipal Finance provided me with the "Assessor's Statement of Assessed Value and Tax Levy", and the "Classification of Tax Roll" documents for each RI city and town.

This chart considers at an oft-neglected distinction here in Rhode Island, the commercial/industrial property tax as separated from the residential property tax collected by each Rhode Island community. This information is needed to begin to answer the question of whether non-profit properties are creating a burden on the communities they reside in.

Before going on, I will make one technical note. Assessment and levy figures are not reported to the Municipal Affairs department by the cities and towns in a uniform fashion. All RI municipalities use the same property classification structure, but the reported totals indicate some variation in what is counted as "residential" and what is counted as "commercial or "industrial" from community to community, for the purposes of calculating the levy.

The charts below the fold show official "residential" and "commercial" property tax levy payable for 2009-2010 reported by each municipality, and then a set of estimates I made based on individual tax-code data to try to group the same set of properties as "residential" or "commercial" in each city or town (including counting "mixed use" properties as residential even though the state officials classifies them as commercial). Adjusted figures are used in this and the related posts. If anyone feels that their community is being slighted, send me an email, and I'll explain the adjustment.

Now, back to the substance...

Municipality Commercial/Industrial
Property Tax Levy
Population C/I Revenue
Per Resident
WestGreenwich $5,045,106 6392 $789
Warwick $59,352,130 84760 $700
Scituate $6,735,672 10853 $621
Lincoln $13,527,283 22049 $614
Middletown $8,604,403 16037 $537
NewShoreham $554,936 1035 $536
Newport $11,902,138 23467 $507
Providence $81,723,975 171909 $475
Smithfield $9,956,735 21205 $470
WestWarwick $12,266,274 29328 $418
EastProvidence $18,275,984 48570 $376
EastGreenwich $4,867,030 13337 $365
Cranston $29,217,892 80126 $365
Johnston $10,390,253 28613 $363
Pawtucket $19,759,204 71953 $275
Portsmouth $4,124,122 16892 $244
NorthKingstown $6,377,864 26654 $239
Westerly $5,545,175 23500 $236
NorthSmithfield $2,716,469 11545 $235
Warren $2,434,303 10897 $223
Foster $941,127 4539 $207
Woonsocket $8,329,958 43372 $192
NorthProvidence $6,271,449 32742 $192
Coventry $6,678,774 34935 $191
Narragansett $2,986,771 16492 $181
SouthKingstown $5,191,768 29195 $178
Richmond $1,267,676 7646 $166
Cumberland $4,747,695 34370 $138
Barrington $2,170,455 16339 $133
Tiverton $1,936,686 14905 $130
Exeter $793,216 6309 $126
Bristol $2,734,674 22306 $123
Hopkinton $931,608 8013 $116
CentralFalls $2,142,752 18716 $114
Glocester $974,415 10552 $92
Burrillville $1,320,805 16576 $80
LittleCompton $244,556 3526 $69
Jamestown $357,338 5473 $65
Charlestown $469,547 8081 $58

Bristol, home of Roger Williams University, is relatively low in the amount of commercial property tax it has to use per-resident, but other private college towns (Providence, Newport, Smithfield) are near the top of the list in terms of per-resident commercial and industrial property tax revenue collected.

You can always make the argument that something not being taxed means that there is another source of money out there to squeeze more more more out of, but there does not appear to be a strong statewide case that non-profits are overly depressing the amount of commercial and industrial property tax dollars being collected by their communities (unless, of course, you are using the progressive "logic" that someone not holding the #1 spot on a taxation list proves that taxes must be made higher).

In the end, if taxing non-profits is the best solution that a financially-strapped community is able to come up with for solving its fiscal woes, it is highly likely that the new revenue will quickly be absorbed into the same poor budgeting practices that created the original problem, and that a new budget hole will soon reappear. No matter how many "new" sources of revenue are added, there is not enough revenue in the world to sustain faster-than-inflation growth forever.

Finally, the results also suggest, much to the chagrin of the pack-everyone-into-cities land-use planning advocates, that strip-mall/big box development (Warwick, Middletown) seems to be very lucrative in terms of commercial tax revenue.

Municipality Official
Residential Levy
Official Commercial/
Industrial Levy
Adjusted
Residential Levy
Adjusted Commercial/
Industrial Levy
Barrington $45,955,559 $2,382,819 $46,167,923 $2,170,455
Bristol $28,369,973 $3,417,059 $29,052,358 $2,734,674
Burrillville $18,130,995 $1,327,259 $18,137,449 $1,320,805
CentralFalls $6,556,719 $2,556,979 $6,970,946 $2,142,752
Charlestown $19,168,253 $654,588 $19,353,294 $469,547
Coventry $47,313,148 $7,730,426 $48,364,800 $6,678,774
Cranston $104,424,922 $38,378,994 $113,586,024 $29,217,892
Cumberland $41,752,797 $5,197,228 $42,202,331 $4,747,695
EastGreenwich $33,017,627 $5,665,567 $33,816,164 $4,867,030
EastProvidence $46,185,485 $23,560,517 $51,470,018 $18,275,984
Exeter $9,685,430 $1,008,298 $9,900,512 $793,216
Foster $8,562,944 $970,387 $8,592,205 $941,127
Glocester $17,502,989 $1,339,663 $17,868,237 $974,415
Hopkinton $13,769,645 $1,173,367 $14,011,403 $931,608
Jamestown $16,651,975 $544,479 $16,839,115 $357,338
Johnston $42,607,948 $10,875,513 $43,093,208 $10,390,253
Lincoln $27,435,864 $14,997,181 $28,905,762 $13,527,283
LittleCompton $8,817,139 $296,978 $8,869,561 $244,556
Middletown $26,799,372 $10,281,855 $28,476,824 $8,604,403
Narragansett $37,272,667 $3,081,649 $37,367,545 $2,986,771
Newport $41,480,624 $16,337,968 $45,916,454 $11,902,138
NewShoreham $6,804,566 $645,953 $6,895,583 $554,936
NorthKingstown $52,114,663 $6,977,775 $52,714,574 $6,377,864
NorthProvidence $40,599,554 $11,935,884 $46,263,989 $6,271,449
NorthSmithfield $17,355,196 $3,688,192 $18,326,920 $2,716,469
Pawtucket $52,024,572 $24,734,726 $57,000,094 $19,759,204
Portsmouth $36,851,797 $3,528,586 $36,256,260 $4,124,122
Providence $128,895,035 $113,190,529 $160,361,589 $81,723,975
Richmond $12,235,933 $1,310,562 $12,278,818 $1,267,676
Scituate $15,407,626 $7,008,646 $15,680,600 $6,735,672
Smithfield $28,057,821 $10,194,444 $28,295,530 $9,956,735
SouthKingstown $53,122,982 $6,538,397 $54,469,610 $5,191,768
Tiverton $26,723,723 $2,504,971 $27,292,009 $1,936,686
Warren $16,053,053 $2,615,058 $16,233,808 $2,434,303
Warwick $111,794,115 $67,943,808 $120,385,793 $59,352,130
Westerly $49,749,172 $6,209,834 $50,413,830 $5,545,175
WestGreenwich $9,354,140 $5,175,052 $9,484,085 $5,045,106
WestWarwick $33,331,160 $13,294,441 $34,359,326 $12,266,274
Woonsocket $28,311,845 $8,704,847 $28,686,734 $8,329,958