February 23, 2012

Residential Taxation in Rhode Island Municipalities, Part 1

Carroll Andrew Morse

Everything up until now has basically been the prologue. Now on to the real thing.

Commercial property tax revenue is a relatively small portion of how RI municipalities generate their funds. The major part of the story involves residential tax revenue plus state aid.

An important quantity that needs to be taken into consideration, usually entirely neglected in Rhode Island taxation debates, is the degree that communities actually tax their own residents to pay for local services. Presently, the measures of "tax effort" that the state uses for various bureaucratic purposes (including calculation of the education aid "funding formula") seem to lump residential and commercial taxation together, meaning that a community can inflate its appearance of "tax effort" by raising taxes on commercial properties. There is a fairness issue here tied directly to an economic one -- if a community makes short-sighted decisions that run a bunch of businesses out of town because of high commercial tax rates that keep residential taxes low, is that community then entitled to demand that the state make up the difference in some kind of "funding formula"?

Data is available for painting a better picture of what is happening on the residential side. In terms of residential tax levies in each RI city and town, 3 components will be considered:

  1. "Residential" real property levies, provided by the RI Division of Municipal Finance for the year 2011, with the usual caveat that apartments and mixed-used properties which can officially be classified as commercial will all be treated as residential.
  2. Fire-district levies in communities where they occur, using the most recent data available from the Division of Municipal Finance from the year 2010 and that I will just move forward for the purposes of this particular analysis. I believe that fire levies are applied to both commercial and residential properties in the places where they are used, so the official figures will be pro-rated by the percentage of residential valuation.
  3. Car-tax levies, provided by the Division of Municipal Finance for the year 2011

(See Table 1, below the fold)

The U.S. Census Bureau American Community Survey provides mean income data for all 39 Rhode Island cities and towns, based on a 5-year data span (and I can hear the skinflint pseudoconservatives shrieking: What? We spent money to pay for 39 estimates. We should consolidate everything, and then we'd only have to pay for 1 estimate).

(See Table 2, below the fold)

Based on those numbers, local taxation in Rhode Island can be calculated in terms of the income of local residents. There are some interesting variations in the results.

Community Estimated
Residential Taxes
Estimated
Community Income
%
New Shoreham $7,548,403 $50,670,812 14.9%
Westerly $60,068,382 $723,623,972 8.3%
Charlestown $22,344,774 $280,245,735 8.0%
Jamestown $18,226,276 $238,128,085 7.7%
Narragansett $41,330,974 $589,639,012 7.0%
Barrington $52,531,961 $750,732,990 7.0%
Smithfield $44,556,739 $660,901,200 6.7%
Hopkinton $17,371,823 $258,085,760 6.7%
Glocester $20,367,277 $310,049,498 6.6%
Tiverton $32,555,171 $501,504,180 6.5%
Foster $10,126,928 $159,648,566 6.3%
East Greenwich $40,943,187 $650,450,934 6.3%
Cranston $140,031,603 $2,230,900,024 6.3%
North Providence $55,663,407 $896,195,164 6.2%
Little Compton $9,690,006 $158,047,920 6.1%
Warren $18,903,276 $313,342,830 6.0%
South Kingstown $59,666,885 $990,620,148 6.0%
Scituate $18,898,836 $321,459,138 5.9%
Richmond $14,284,170 $244,582,548 5.8%
Coventry $59,892,348 $1,038,550,254 5.8%
Portsmouth $41,832,221 $732,059,511 5.7%
Middletown $31,522,496 $553,331,300 5.7%
Warwick $142,107,199 $2,515,047,584 5.7%
North Kingstown $57,562,579 $1,030,596,746 5.6%
Burrillville $25,001,269 $451,319,085 5.5%
Newport $48,915,879 $883,701,696 5.5%
North Smithfield $22,118,882 $410,133,024 5.4%
West Greenwich $11,254,689 $213,215,790 5.3%
Johnston $40,940,330 $778,402,833 5.3%
Exeter $12,546,640 $242,627,275 5.2%
Providence $187,919,289 $3,691,700,870 5.1%
East Providence $64,344,891 $1,310,121,561 4.9%
Cumberland $55,052,263 $1,121,847,892 4.9%
Lincoln $37,704,656 $777,803,670 4.8%
Pawtucket $74,151,943 $1,534,520,064 4.8%
Woonsocket $38,789,267 $833,687,012 4.7%
Bristol $32,574,555 $711,183,782 4.6%
West Warwick $33,739,187 $771,810,040 4.4%
Central Falls $9,700,424 $290,465,616 3.3%

We're not done yet (hence the "part 1" in the title of this post), but I will make two immediate comments:

  1. A major factor that's missing that's really needed to complete this analysis for Rhode Island is the contribution made by summer residents. In effect, in communities that have a large number of summer homes, there is more property value than residents, which makes the final percentage appear higher than it should. A strong case can be made for backing that number out to calculate the percentage of year-round resident income that is collected in local taxes.
  2. We've got a couple of more posts to go, to contribute to a fuller understanding of the revenue side in each RI city and town...


Table 1:
Community 2011 Residential
Tax Levy
2010 Pro-Rated
Fire District Levy
2011 Car
Tax Levy
Estimated
Residential Taxes
Barrington $47,110,364 $0 $5,421,597 $52,531,961
Bristol $30,459,812 $0 $2,114,743 $32,574,555
Burrillville $18,691,892 $2,094,565 $4,214,812 $25,001,269
Central Falls $8,007,467 $0 $1,692,957 $9,700,424
Charlestown $20,113,222 $1,355,704 $875,848 $22,344,774
Coventry $47,653,167 $7,243,089 $4,996,092 $59,892,348
Cranston $120,251,791 $0 $19,779,811 $140,031,603
Cumberland $44,005,066 $5,953,132 $5,094,064 $55,052,263
East Greenwich $35,348,088 $3,589,294 $2,005,805 $40,943,187
East Providence $55,507,929 $0 $8,836,962 $64,344,891
Exeter $9,711,665 $961,412 $1,873,562 $12,546,640
Foster $8,982,979 $0 $1,143,949 $10,126,928
Glocester $17,211,488 $1,143,093 $2,012,696 $20,367,277
Hopkinton $14,969,360 $1,061,997 $1,340,465 $17,371,823
Jamestown $17,725,156 $0 $501,120 $18,226,276
Johnston $40,736,167 $0 $204,162 $40,940,330
Lincoln $29,902,515 $3,309,995 $4,492,145 $37,704,656
Little Compton $9,392,423 $0 $297,583 $9,690,006
Middletown $29,986,463 $0 $1,536,033 $31,522,496
Narragansett $39,759,113 $228,472 $1,343,389 $41,330,974
Newport $47,191,289 $0 $1,724,590 $48,915,879
New Shoreham $7,461,456 $0 $86,946 $7,548,403
North Kingstown $53,257,852 $0 $4,304,727 $57,562,579
North Providence $46,792,573 $0 $8,870,833 $55,663,407
North Smithfield $18,278,073 $0 $3,840,809 $22,118,882
Pawtucket $60,296,861 $0 $13,855,082 $74,151,943
Portsmouth $39,497,860 $452,482 $1,881,879 $41,832,221
Providence $156,284,921 $0 $31,634,368 $187,919,289
Richmond $12,637,270 $412,211 $1,234,689 $14,284,170
Scituate $17,331,169 $0 $1,567,667 $18,898,836
Smithfield $38,389,349 $0 $6,167,390 $44,556,739
South Kingstown $54,367,391 $2,122,214 $3,177,280 $59,666,885
Tiverton $30,522,223 $755,314 $1,277,633 $32,555,171
Warren $17,145,009 $0 $1,758,267 $18,903,276
Warwick $119,451,175 $0 $22,656,024 $142,107,199
Westerly $52,461,672 $2,715,137 $4,891,573 $60,068,382
West Greenwich $10,121,502 $0 $1,133,188 $11,254,689
West Warwick $29,853,587 $0 $3,885,599 $33,739,187
Woonsocket $30,956,546 $0 $7,832,720 $38,789,267



Table 2:
Community 2010 Census Bureau
Per-Capita Income
Population Estimated
Community Income
Barrington $46,029 16,310 $750,732,990
Bristol $30,983 22,954 $711,183,782
Burrillville $28,287 15,955 $451,319,085
Central Falls $14,991 19,376 $290,465,616
Charlestown $35,805 7,827 $280,245,735
Coventry $29,661 35,014 $1,038,550,254
Cranston $27,752 80,387 $2,230,900,024
Cumberland $33,482 33,506 $1,121,847,892
East Greenwich $49,479 13,146 $650,450,934
East Providence $27,853 47,037 $1,310,121,561
Exeter $37,763 6,425 $242,627,275
Foster $34,661 4,606 $159,648,566
Glocester $31,813 9,746 $310,049,498
Hopkinton $31,520 8,188 $258,085,760
Jamestown $44,057 5,405 $238,128,085
Johnston $27,057 28,769 $778,402,833
Lincoln $36,854 21,105 $777,803,670
Little Compton $45,260 3,492 $158,047,920
Middletown $34,262 16,150 $553,331,300
Narragansett $37,159 15,868 $589,639,012
Newport $35,818 24,672 $883,701,696
New Shoreham $48,212 1,051 $50,670,812
North Kingstown $38,911 26,486 $1,030,596,746
North Providence $27,938 32,078 $896,195,164
North Smithfield $34,272 11,967 $410,133,024
Pawtucket $21,568 71,148 $1,534,520,064
Portsmouth $42,099 17,389 $732,059,511
Providence $20,735 178,042 $3,691,700,870
Richmond $31,731 7,708 $244,582,548
Scituate $31,122 10,329 $321,459,138
Smithfield $30,840 21,430 $660,901,200
South Kingstown $32,332 30,639 $990,620,148
Tiverton $31,781 15,780 $501,504,180
Warren $29,530 10,611 $313,342,830
Warwick $30,422 82,672 $2,515,047,584
Westerly $31,756 22,787 $723,623,972
West Greenwich $34,754 6,135 $213,215,790
West Warwick $26,440 29,191 $771,810,040
Woonsocket $20,242 41,186 $833,687,012