Mayor Taveras Testifies in Support of House Bill 7450

Mayor Angel Taveras testified before the House Finance Committee today in support of House Bill 7450 - legislation that would permit cities and towns to assess an impact fee on colleges, universities and hospitals equivalent to 25% of their assessed property tax to compensate the city for services it provides to large tax-exempt institutions.

This legislation, introduced by Providence Rep. John Carnevale, would allow the city to pay for the city services that are provided to large tax-exempts and generate approximately $28 million per year.

Mayor Taveras has called on seven of Providence's large tax-exempt institutions to increase their combined support to the capital city by $7.1 million. To date, the only institution that has demonstrated a willingness to help is Johnson & Wales University, which has voluntarily agreed to at least triple its annual payments to the city.

Mayor Taveras' testimony addressed the following points:

• House Bill 7450 is about creating an equitable and sustainable system that asks all the major tax exempt organizations in Providence to contribute their fair share to cover the costs of vital city services, such as police, fire, and maintenance of roads and infrastructure.
  
• For many years, Providence has provided city services to these institutions without asking for payment, passing the costs of delivering these services on to homeowners and taxpayers.
  
• This is an overwhelming burden for the families and small businesses who must fully subsidize the city services that we are by necessity mandated to supply.
  
• The approximate value of hospital and university-owned tax-exempt property in Providence is about $3 billion. If taxed at 100 percent of the current rate, these institutions would provide more than $111 million in tax revenue to the city.
  
• Asking tax exempts to support their home city is not a new concept. More than 100 municipalities across America have established PILOT programs.
  
• Yale University entered into its first PILOT agreement with the City of New Haven in 1991. Its current agreement calls for an annual contribution of $7.5 million. In all, Yale contributes more than $15 million in taxes, fees and PILOT payments annually to New Haven.
  
• Boston Mayor Tom Menino has also asked the tax-exempt institutions in his city to pay 25% of what they would owe if they were not tax exempt. Many have stepped up to the plate.
  
• Providence is proud to be home to so many universities and hospitals and the city is grateful for all they contribute. Large tax-exempt institutions cannot be successful in a failing city. Providence needs these institutions to contribute to the city's economic stability and join with Providence in charting a successful future.