2017-05-18 / Front Page

Napolitano Calls Tax Increases 'Unconscionable'

By Olga Enger

Newport City Council has pushed back on a proposed budget that would raise taxes by 3.11 percent.

"I'm concerned about the rate of increase," said Councilor Jeanne Marie Napolitano at the budget's first reading, held May 10. "I think for me, it's unconscionable to raise it above what the [Consumer Price Index] is." Council rejected the preliminary budget in a 2-5 vote, with Mayor Harry Winthrop and Council Vice Chair Lynn Ceglie in support. Local tax rate increases are limited to four percent under state law.

The Consumer Price Index (CPI) is a national average price of consumer goods and services, such as transportation, food and medical care. Over the past 12 months, the general CPI index rose 2.2 percent, according to an April report from the Bureau of Labor Statistics.

City Manager Joseph Nicholson said that although staff will continue to look at the numbers, the majority of expenditures is non- discretionary, such as contractual obligations, police and fire pension contributions, and health and dental rate increases.

"CPI is a noble goal to get to. We aren't going to get to that," said Nicholson.

If approved as proposed, the impact for a home valued at $350,000 would be an additional $119 per year. In addition to the tax hike, the average household should also brace for an annual increase of $65.28 to the sewer rate, which is billed through the water utility bill.

"I wish someone had told the CPI that Blue Cross health insurance increases are 12 to 13 percent. We aren't magicians, but we can see what we can do," said Nicholson. "I had considered this first reading perfunctory, because of course we don't have the school numbers." The proposed budget includes a 1.5 increase for the schools, but council will not meet with the School Department until May 24 to review their numbers

Looking longer term, Nicholson predicted Newport should prepare for more financial turbulence. Although council will only adopt the budget for fiscal 2018, officials estimate a 3.64 percent tax rate hike next year. However, the increases do not include a substantial upgrade and repair list to the city's utilities and school buildings. The city will be required to make $55 million worth of water infrastructure improvements over the next several years, in addition to the $30 million worth of improvements that were recently completed. Additionally, Newport's three schools require around $80 million of capital improvements, according to a recent study conducted by the Rhode Island Department of Education (RIDE).

No one from the audience spoke about the budget. Council will vote on the final budget on June 24.

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