2018-07-26 / Opinion

Beware Property Tax Freeze

To the Editor:

Recently you may have noticed Middletown Councilors Antone Viveiros and Dennis Turano soliciting signatures to place a referendum on the November ballot to impose a property tax freeze similar to the one enacted by California in 1978.

I encourage you not to sign this petition. Middletown does not need this ill-considered, regressive property tax freeze which will create tax inequities and a loss of tax revenue.

Viveiros and Turano assert the reason for their proposal is to provide property tax relieve to those on fixed incomes who cannot afford current property taxes and are being forced out of their homes.

If property tax relief is needed for fixed-income homeowners, the obvious and simple solution is to means-test homeowners and provide tax relief on a sliding scale keyed to their income, perhaps allowing property taxes to take no more than a fixed percentage of income.

I was a California voter and homeowner when Proposition 13 was presented to the voters in 1978. I voted against Prop 13 then because I understood that the long-term effects would be disastrous for California’s public services and education. I also understood that describing this as tax relief to homeowners was deceptive. Prop 13 and the Viveiros-Turano proposals are both anti-government, anti-tax proposals intended to provide tax advantages to those with substantial real estate holdings.

The tax freeze proposed by Viveiros-Turano will inevitably have the same pernicious and disastrous effects Prop 13 has had in California since 1978.

As was experienced in California, the Viveiros-Turano tax freeze would substantially reduce Middletown tax revenue. It would not happen overnight; it took California two decades to feel the effects and finally begin to reverse Prop 13, but inevitably Middletown’s ability to fund town services, schools and to secure low-cost bonds would be destroyed. It happened in California, it can happen in Middletown.

Because homeowners will keep their homes for longer, young households will rent for longer periods. The Viveiros-Turano proposal would create an immediate increase in taxes after a sale, which would be a huge disincentive to buying a home in Middletown, especially when compared with other Rhode Island towns, which do not have such a disincentive.

Because properties purchased and held as income-producing investments are infrequently sold, property taxes would be shifted from high-value properties to lower assessed real estate. In Middletown this would mean high-value sea-side properties would carry less of the tax total burden than the high-density, lower-value properties on Middletown’s west side.

The Middletown Council wisely authorized a $19,500 study by the Rhode Island Public Expenditure Council (RIPEC) to assess the impacts of the Viveiros-Turano proposal. I urge the Council to defer any action on the proposal until RIPEC has provided their study and the citizens of Middletown have had an opportunity to fully consider and publicly debate the proposal.

Richard Adams

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