Of the 40 most valuable commercial properties in Providence, only four are subject to full taxation, according to the latest revaluation done for the city. Let that sink in.
Providence’s fiscal challenges are well-known, especially its continuing unfunded pension liability and other escalating personnel costs, all of which place great strain on the city’s financial position. And while there is no doubt that the city does not have a firm handle on its expenses, the issue of revenue cannot be ignored.
The preponderance of nonprofit entities – colleges, hospitals, churches – that make small or no payments to the city in lieu of property taxes is well-known. But this round of revaluation brings the issue into sharp relief.
According to Providence Mayor Jorge O. Elorza, 40 percent of the property value in the city is held by nonprofits, meaning that 100 percent of the city’s expenses are being paid by those owning 60 percent of the city’s real estate value. That hardly seems fair in any circumstance, but today it seems a sure recipe for fiscal disaster.
There is no doubt that the city’s nonprofits provide great value to all, whether as employers or schools or health care providers. And some nonprofits really don’t have the resources to make a full tax payment.
But something needs to change, and on both sides of this equation, before more drastic measures are taken to balance Providence’s books, changes that could do far more harm to the city and its important institutions than either could handle. •
