By JOHN HOWELL
Even though taxes are linked to the city budget – the less money the city needs to raise, the less taxes - Mayor Frank Picozzi is asking the City Council for a vote to delay …
By JOHN HOWELL
Even though taxes are linked to the city budget – the less money the city needs to raise, the less taxes - Mayor Frank Picozzi is asking the City Council for a vote to delay implementation of the latest revaluation scheduled for this year.
A delay in the revaluation, which requires General Assembly approval, would mean values set three years ago would be used in calculating the tax rate. It also means that the proportional difference in valuations between different properties would remain the same and unless the budget for the 2022-23 fiscal year requires additional revenues, property taxes wouldn’t increase. It’s too early for Picozzi to know whether he can craft a budget that doesn’t increase taxes.
Nonetheless, in face of the high demand for housing and the red hot real estate market fueled by low interest rates and scarcity of homes for sale, Picozzi doesn’t see this as the time to change valuations. According to the Rhode Island Association of Realtors that records monthly sales of real estate by municipality the median price of a single-family home in Warwick climbed from $270,000 in November 2020 to $320,000 in November 2021, an increase of 18. 5 percent.
“We believe these are inflated home values that aren’t going to last,” Picozzi said in an interview Tuesday. Picozzi expects home values to decline within the year. Implementation of the revaluation would be delayed a year under the plan. The values would be as of Dec. 31, 2022. As of the most current revaluation three years ago, Warwick property had a total value of $11.5 billion which tax assessor Neal Dupuis broke down as $7 billion in residential properties, $2.5 billion in commercial and $2 billion in non taxable properties that includes the airport, Kent Hospital and CCRI as well as churches and other non profits.
On the surface, it doesn’t appear a delay in the revaluation would amount to much other than postponing increased assessments. However, over the last couple of years generally homes that were selling in the range of $150,000 to $200,000 three years ago have, in some cases doubled whereas higher priced homes have not proportionally appreciated. If the revaluation reflects this trend the lower valued properties will also proportionally see a greater increase in their taxes.
In an interview in December Dupuis said appraisers were working with 1,400 to 1,500 property transactions since the last revaluation to arrive at values. On Monday he said the process of assigning values had been completed but neither letters nor website postings informing taxpayers had been issued. He noted the volatility of the market but offered no opinion on delaying implementation of the revaluation.
Referencing how sales serve to set values, in December he said, “Let the market speak.”
Asked about postponing the revaluation on Saturday, House Speaker K. Joseph Shekarchi said if the administration intends to do that, it should act quickly. That advice apparently reached the mayor’s ears. On Monday City Council President Steve McAllister docketed a resolution calling on state legislative approval to delay the revaluation. It was not clear what impact the delay would have on the cost of revaluation or how the valuations might change. Would the process of establishing values, which has taken about a year to establish, have to start from the beginning or might the values of Dec. 31, 2021 be used as a baseline from which Dec. 31, 2022 values could be used to apply a percentage increase or decrease in values depending on market performance?
On Tuesday Picozzi said Warwick isn’t alone in seeking an exemption to the state law requiring a revaluation every three years. He said Johnston is also looking to delay its revaluation.
Although higher valuations can translate into higher, lower or no increase in taxes on an individual basis, Picozzi sees overall higher assessments as having a negative impact on property owners.
“Right now residents are paying $4 and change for gas, $50 more a week for groceries and they can’t afford a devastating tax increase,” he said
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