Schools’ Budget Ask Would Have Added $104 to Median Tax Bill

WARWICK, R.I. — When Warwick high school students protested $7.7 million cut from school programs last week, Mayor Joseph J. Solomon said the money’s there, but even a maximum 4 percent tax increase instead of 3.46 percent in FY20 would’ve only added about half that amount in funding.

About half may yet be found in paving money budgeted for FY20 that the city has historically never used up, however. Together, taxing at the maximum and re-allocation could’ve plugged the School Department’s deficit. That would have added another $104 to the tax bill of a homeowner with a house valued at the median in the City, $222,450.

The Reval Effect

As the budget stands, the tax on such a home, at 18.73 per $1,000 value, is $4,166.48, or $460.48 less than a house of that value would have been taxed last year. But the recent revaluation resulted in an average 14.8 percent increase in home values, mostly for homes in the $200,000 to $300,000 range, thanks to a stronger market for modestly priced homes. Today’s median priced home could have been $32,922 cheaper last year, $189,528.

In fact, according to Warwick’s online assessor’s database, one home on Warner Brook Drive valued today at $224,000 was assessed at $186,300 in 2018. Last year, at a $20.80 tax rate, that homeowner’s tax bill would have been $3,875.04.

This year, after the revaluation to $224,000, with an $18.73 tax rate, the homeowner’s bill is $4,195.52, an increase of $320.48.

In FY19, at a $20.80 tax rate, city tax revenue potential on the total assessed residential value of $6,013,003,500 was $125,070,473. Total residential value increased with the revaluation to $7,284,563,100, which raised $136,439,867, an additional $11.3 million, despite the lower tax rate.

Raising revenue to the 4 percent cap would have produced an extra $3.4 million with an increase of .47 cents to the residential rate, making it $19.20 per $1,000 assessed value. At that rate, the tax bill on a $222,450 home comes out to $4,271.04, or $104 more added to the FY20 tax bill.

For the owner of the house on Warner Brook Drive, the tax bill would have been another $105.28, for a total increase of $425.76.

Maximum Still Not Enough

Whether an extra $105.28 on an already unwieldy tax increase seems a good price to pay to avert the Warwick School Department’s cuts is a moot point, since there’s no legal path to make that change this late in the year.

Peder Shaefer, associate director fo the RI League of Cities and towns, said the only way to increase the tax rate after the City Council approved Solomon’s budget would be through a special act in the General Assembly, which ends its current session June 30. The City Council, which would have to request the special act, doesn’t meet again until July 15.

“There has never been a question of whether the money is there, it’s how it’s spent,” Solomon said June 19 during a press conference following about 60 high school students’ visit to City Hall chanting “Save Our Sports” and “Fund Our Future.”

“What I took from his statement was that, while the City could come up with some additional funds on top of the earlier increase – like finding the $1.36 million to fund sports – the City certainly cannot pay for the earlier $7.7 million request in full,” said Warwick City Councilman Jeremy Rix.

Improbable Paving And The City’s Deficit

Budget watchdog Rob Cote’s criticism of $5 million appropriated for paving in the FY19 budget, which DPW director Mat Solitro said the department only spent $1.9 of, leaving $3.1 million unspent, is an unlikely source of relief for the School Department, Rix said.

After the May 29 meeting, City Finance Director Brian Silva said the unspent FY19 paving funds remained in the paving account, where they will stay until being spent or carried over into the line item for the next fiscal year.

But Rix said any unspent funds will likely get applied to the City’s own projected $3.5 million deficit in FY19.

“I cannot say for 100 percent certainty, but it is almost certain that the City will finish with a deficit for FY 2019, so, there really is no money from the FY 2019 budget that can be used to help the schools with the FY 2020 budget,” Rix said.

Similarly, the City is also projecting a $2 million deficit for FY20, he said.

The City has budgeted another $4.5 million for paving in FY20 however, which Cote has pointed out is historically unlikely to be spent this year, with millions left over, as in FY19.

“There is no way you are going to spend $5 million on paving. There is no possible way,” Cote said during the May 29 budget hearing.

Rix said some unspent funds, such as those in the paving line item, could be transferred to the schools in FY20.

During discussion of a no-confidence vote in School Finance Director Anthony Ferucci, Rix pointed out that an error estimating Warwick Schools health care costs likely inflated the School Department’s budget request by about $1 million.

That would bring the total available funding that could be used elsewhere to about $3.6 million, assuming the City spends $1.9 million on paving again this year.

“It is possible that parts of some line items could be transferred, but, we’re already looking at a deficit on the City side for FY 2020, with the City already making many cuts since Mayor Solomon took office and delaying filling dozens of positions to try to minimize the financial impact in these times,” Rix said.