 |
|
5/1/2025
|
House OKs Corvese tax levy cap bill aiding communities with new housing
|
Legislation is part of Speaker Shekarchi’s 2025 housing package
STATE HOUSE – The House of Representatives today approved legislation sponsored by Rep. Arthur J. Corvese to allow flexibility on the tax levy cap for communities when new housing is built, provided the new housing meets criteria including affordability requirements.
The legislation (2025-H 5793A), which is one of the 12 bills in Speaker K. Joseph Shekarchi’s 2025 legislative package to address housing, was requested by the League of Cities and Towns and would help cities and towns accommodate housing growth. It would allow an exemption from the local annual maximum tax levy for new construction of housing under certain conditions. The exemption would be contingent upon approval by the municipality and is only allowed where the new housing includes a portion of affordable units, among other criteria.
“Our state has a tax levy cap of 4 percent to protect taxpayers, but if a community experiences a healthy amount of new development — which is what we hope will happen to help meet our state’s housing needs — that cap can have unintended consequences for that municipality. It’s hard for budgeters to plan, and the town must provide services to more homes, with limits based on the previous year’s levy,” said Representative Corvese (D-Dist. 55, North Providence). “This bill will give cities and towns relief from an obstacle they face with new development, and will help them welcome new housing, particularly housing that working people can afford.”
Rhode Island law prohibits municipalities from raising their total tax levy — the total amount of money raised by local taxes — more than 4% from one year to the next. But if a town experiences even a relatively modest burst of construction, the taxes it collects from the new construction can push it over the 4% cap. Yet the municipality needs funding that corresponds to the additional services it must provide to those new properties.
The bill allows communities, under specific conditions, to exclude its tax revenue from qualified new construction from the calculation it uses to determine its 4% cap for up to three years. Those properties would still be subject to the same municipal taxes as all other properties.
The legislation now goes to the Senate.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903
(401) 222-1923
|
|