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6/21/2025
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Assembly OKs tax levy cap bill aiding communities with new housing
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Legislation is part of House Speaker Shekarchi’s 2025 housing package
STATE HOUSE – The General Assembly today approved legislation sponsored by Rep. Arthur J. Corvese and Sen. Jacob E. Bissaillon 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 bill now goes to the governor.
The legislation (2025-H 5793A, 2025-S 1091), which is part of House 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.
“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.”
Said Senator Bissaillon (D-Dist. 1, Providence), “The tax levy cap is meant to prevent unwarranted growth of municipal budgets, not to discourage development in any way. Exempting the effect of affordable housing development on the growth of the community’s tax levy is the appropriate way to maintain the intent of the levy cap while enabling municipalities to account for the costs that come with new development. Ultimately, this change supports the affordable housing development we very much need in Rhode Island.”
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. 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.
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903
(401) 222-1923
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