PROVIDENCE – Two conflicting bills -- one that would put a cap on the amount Cumberland fire districts can increase their tax levy and another that would allow the Cumberland Hill Fire District to implement a four-tier tax classification program – were heard by the House Municipal Government Committee Thursday.
For the most part, the same people testified on opposite sides of both bills, with defenders of the fire districts supporting the tax classification plan and opposing the caps and residents of the district hailing the caps and saying the tax classification system would drive businesses out of town.
This is the second year in a row that Cumberland Rep. James McLaughlin has proposed a cap on the town’s fire districts tax levies to keep tax bills low. The classification bill was introduced by Rep. Rene Menard, whose district straddles Cumberland and Lincoln, after voters at the annual meeting of the Cumberland Hill Fire district requested a four-tier system so the residential rate in the district could be kept the same while the rate on commercial property could be raised by 42 percent, from $1.67 per thousand to $1.84 per thousand. On a $50,000 property, that would raise the tax bill from $83.50 to $92.
The change to a classified system requires General Assembly approval.
Town Councilwoman Mia Ackerman said many of the businesses in the district and the town “are small businesses, mom-and-pop type of shops whose profits are thin at best.” She said the cost of the tax hike “will be passed down to customers or businesses will be forced to close down because of the outrageous fire taxes.”
Ackerman criticized the notice and posting of the meeting last November where the classification plan was approved, noting that only 42 of the district’s residents showed up to vote.
Scott Schmitt, a district resident, acknowledges that, “we were asleep at the switch. I missed the meeting, shame on me.
“If the tax rate goes up, businesses can’t afford it,” Schmitt said. “We’re trying to draw business to Cumberland and now we’re raising their taxes by 42 percent
He said a petition drive to call a special meeting to reconsider the classification plan and perhaps lower the district’s budget instead gathered 115 signatures, which he said was signed only by residents, not business owners, and that more people have signed on since.
Schmitt was angry that the district will not call the special meeting until May 15.
The possibility of a special meeting dampened the committee’s interest in Menard’s bill. If a special meeting will be held by May 15, committee member Rep. Peter Petrarca of Lincoln said, and the residents reverse the request for a classified system, there will be no need for the legislature to take action. If the district still wants it after May 15, the legislature could take action at that time, he said.
Irene Schmitt said that despite any prior notice given about the meeting, “there is no way a prudent person could expect a 42 percent increase.”
Scott Gibbs, president of the Economic Development Foundation of RI, which operates Cumberland’s Highland Industrial Park, said the classification bill “is a business climate issue, pure and simple. The intention is clear: it is unfair, unreasonable and egregious.
Ronald Champagne, chairman of the Cumberland Hill Fire District, defended the meeting and the notice to residents, saying “a good sized ad” was placed in two daily newspapers and a notice of the meeting was posted on the secretary of state’s website, at the firehouse and at a local supermarket.
Champagne said that, at the fire district annual meetings, “taxpayers approve the rate,” so there should be no need for the General Assembly to put a cap on increases.
He also said that the district puts money away each year for major purchases like fire trucks and other expensive equipment. But with the town studying a merger of the districts “there is a group of people who want us to spend all this money.” He told the lawmakers that a merger is not a sure thing.
Richard Susi, executive director of the RI Association of Fire Chiefs, said caps will not work for fire districts because they are working with such small budgets already and the cost of equipment like turnout gear and air packs can quickly exceed an arbitrary cap on increases.
The committee held both bills for further study.