Sam Zurier

In the first of a two-part series, Providence City Councilman Sam Zurier takes a look at the city's current tax structure and how it got to where it currently is.

The following is the first in a two-part series from Providence City Councilman Sam Zurier examining the current state of Providence's taxes.

The Problem And How We Got There

In his February 22 list of “Who’s Hot and Who’s Not” in Rhode Island, Mindsetter Dan Lawlor called out the Providence commercial property tax rate, noting that “making our commercial property tax rate competitive is a key tool to promoting business.” Although Providence’s tax structure is hardly the news of the week, he is entirely correct in noting its drag on economic development in the Capital City. For more than a decade, the general level of business development in Providence has been weak; far too often, the only two places in our City where you can find working cranes are at the Port of Providence and in the wetlands exhibit at the Roger Williams Park Zoo. Also, Providence’s commercial tax rate is indisputably high. In 2011, the Lincoln Land Institute performed a national survey of 53 major urban areas, and found that the commercial tax rate in Providence trails only the City of Detroit, hardly a promising sign.
The Providence City Council formed a Revenue Study Commission in 2011 to look at the City’s tax policy, generating a 2012 report called “A System Out of Balance” which affirms the connection between the City’s tax rate and its constricted economic development. A century ago, Providence was an economic powerhouse. Since that time, Providence lost most of its industrial base, watched much of its middle class move to the suburbs, and faced increasing levels of poverty. Others (such as Tom Sgouros) have reviewed and analyzed these broader trends and their impact on municipal economies. In this piece, I will describe more specifically how Providence’s commercial tax rate became so high (both in relative and absolute terms) over the past quarter century. Next week, I will describe the options Providence has to address this difficult fiscal challenge.
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