2017-06-22 / Around Town

Council OKs 2.56 Percent Tax Hike

By Olga Enger

Newport City Council initially approved the fiscal 2018 budget that would increase the residential and commercial tax rate by 2.56 percent and 2.57 percent, respectively.

Last month, council rejected a larger budget put forward by city staff, which proposed increasing taxes by 3.11 percent. At the June 14 regular meeting, councilors quickly passed the revised budget in a 7-0 vote, with no discussion beyond a brief explanation of the docket items and the budget process. Nobody from the audience spoke at the public workshop.

A final vote on the budget is expected to take place at the June 28 City Council meeting.

Under the revised budget, a homeowner with a residential property assessed at $450,000 would pay $5,044.50 each year in property taxes, which is an increase of $126 from the current year. For a business assessed at $450,000, the property taxes would increase from $6,822 to $6,997 annually, a $175 hike.

The approval includes a $39.3 million school budget, of which $25.6 million is appropriated from city council and the remaining revenue is pulled from federal and state sources. The revised budget includes a $300,000 increase in school appropriation from the original budget and includes a $243,918 savings in business office personnel. The new budget will require the school department to merge positions into the city finance office. In total, the revisions freed up an additional $543,918 for educational purposes. In a May 30 workshop, Superintendent Colleen Jermain said to maintain the same level of education, without additional investment into technology or other programs, the district requires $40.4 million, which is about $1.8 million more than the current $38.6 million budget.

Councilor Kathryn Leonard asked about the process for those school positions to be merged into the city finance department.

“I’m looking at page two of the classification plan for municipal employees, and I see we have four listed positions, I don’t know if they are full-time or part-time, for what appears to be school finance. I wondered if the school committee has voted on this and whether it has been finalized,” asked Leonard.

“The School Committee has not voted on the budget,” said Mayor Harry Winthrop. “What we do is we appropriate the funding. We send it back to the School Committee. The School Committee then adopts our budget, or amends it, or rejects it,” he said. “So the step is that we first appropriate the revenues, approve the budget, and then it goes to the School Committee.”

Other changes to revised budget included cutting a half-year of funding for two open positions and restructuring positions within the public services department.

Winthrop has referred to this budget cycle as the most difficult he has seen in 20 years. During May budget workshops, City Manager Joseph Nicholson explained that the majority of expenditures are non-discretionary, such as contractual obligations, police and fire pension contributions, and health and dental rate increases.

Looking ahead, Newport is expected to face additional rocky financial roads, Nicholson has warned. Although council only adopted the budget for fiscal 2018, officials estimate a 3.64 percent tax rate hike next year. The tax increases do not include future repairs and upgrades 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).

Return to top