Rhode Island § 44-45-2 - Omnibus Property Tax Relief and Replacement Act

§ 44-45-2. Legislative findings.

The general assembly finds and declares that the following conditions confront Rhode Island at this time:

(1) In 1982, the governor’s advisory commission to study the financial operations of state and local governments found that “when the state and local tax system is viewed in its totality, it becomes clear that property tax relief and replacement is needed”.

(2) Rhode Island has a serious over reliance on the property tax, as evidenced by the facts that:

(i) Rhode Islanders paid forty-nine dollars and ninety-two cents ($49.92) per capita in property tax collections in fiscal year 1983, compared to a U.S. average of thirty-four dollars and seventy-one cents ($34.71), ranking this state sixth highest in the nation;

(ii) Per one thousand dollars ($1,000) of personal income, property tax collections in Rhode Island equaled five hundred and thirty-seven dollars ($537) that year, compared to a three hundred and eighty-one dollar ($381) U.S. average, placing the state ninth highest nationally; and

(iii) Rhode Island’s cities and towns derived fifty-eight and nine-tenths percent (58.9%) of their own-source local general revenue from the property tax in fiscal year 1983, compared to an average of only twenty-eight and eight-tenths percent (28.8%) for all the states.

(3) In 1983-84, Rhode Island ranked only forty-third nationally in terms of state support for public elementary and secondary school, providing only thirty-six percent (36%) of these revenues.

(4) The state educational operations aid formula should be gradually increased until the state and municipalities equally share the cost of providing local education. The general assembly remains committed to that objective and intends to pursue that objective aggressively upon receipt and consideration of the final report of the joint legislative committee to establish a permanent education foundation aid formula in accordance with § 16-7.2-2 of the general laws.

(5) The state should also share a greater portion of its economically sensitive growth taxes with its cities and towns in order to further shift the burden of funding essential municipal services from the property tax.

(6) The growth in property tax levies should be capped in accordance with § 44-5-2 of the general laws as a quid pro quo for receiving increased state aid to reduce reliance on the property tax.

(7) Cities and towns should be assisted in their efforts to control school and municipal expenditures by appropriately amending state arbitration and school budgeting laws.