Mayor Angel Taveras will seek $9 million in total contributions from tax-exempt organizations — like the University — and will support legislation in the General Assembly requiring such institutions to pay 25 percent of the property taxes they would owe if they were for-profit, he announced to the Providence City Council in his 2012 budget address Monday night.
"I am hopeful that we might reach a negotiated agreement directly with our colleges and universities, but as that process unfurls we will continue to fiercely advocate for passage of this legislation," Taveras said in his address. "Our relationship with the tax-exempt institutions simply cannot continue on the path we are on, and this budget reflects the reality. … Moving forward, our city must be able to rely on these organizations for substantially more financial assistance."
Brown currently pays more than $5.5 million in annual direct payments to the city, wrote Marisa Quinn, vice president for public affairs and University relations, in an email to The Herald.
"University officials have been talking with the Mayor's office about constructive ways that we can enhance our current contributions and support the city's efforts to improve Providence's fiscal circumstances," she wrote. "We see opportunities to contribute more to the Providence Public Schools and to the ongoing initiative to develop the Knowledge Economy, particularly in the Jewelry District. We would like to continue to be a productive partner in the progress of our city, but taxing students or colleges and universities is counterproductive to our shared goals."
Brown, the Rhode Island School of Design, Providence College and Johnson and Wales University agreed in a 2003 memorandum of understanding to pay nearly $50 million in voluntary contributions to the city over 20 years. But since 2003, the city's financial situation has deteriorated to what Taveras in February called "an unprecedented fiscal crisis." Providence faces a $110 million projected deficit for the coming fiscal year.
According to Taveras, the value of the taxable property owned by Providence nonprofits totals $97.5 million. These institutions occupy nearly half of the land in the city, he said in his speech.
Boston Mayor Thomas Menino also recently asked his city's nonprofits to pay up to 25 percent of the property taxes they would owe if they were not tax-exempt.
Unlike Providence's private colleges and universities, hospitals currently make no voluntary financial contributions in exchange for city services. The legislation Taveras supports would be the first to require private hospitals to make payments to the city.
Taveras' proposed $616.7 million budget would also hike Providence's historically high property taxes by 5 percent. The budget includes measures such as creating an overnight parking program, upping the revenue generated from parking tickets and fees and changing the retiree health care system to save $11.4 million.
Since taking office this January, Taveras has closed five schools, fired all 1,934 Providence teachers, laid off nonunion city employees and negotiated a cost-saving deal with the city's largest public employees union — all in the name of reining in the deficit.
Full text of the speech: http://cityof.providenceri.com/efile/907.