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Middletown City Council approves 30% tax increase for nonresident property owners

The Middletown City Council on Monday night approved a resolution to increase property taxes on non-resident owners and rental properties by 30%, sparking a heated debate about the equity and impact of this change on housing affordability in the city.

The 6-1 vote will increase the difference in tax rates between resident and non-resident properties. That means non-residents will pay $11.25 per $1,000 of assessed value, while residents will pay $8.65 per $1,000 – a difference of $2.60.

“I will support this because I believe it will help the majority of residents,” said Council President Paul M. Rodrigues. “Even for the residents who rent, like Oxbow or Northgate, their taxes will likely go down even though they pay higher taxes.”

“I want to make sure that tenants are treated fairly and do not have to pay huge amounts of money to stay here,” said City Councilor Emily Tessier.

“If we move the slide rule down, we force our residents to pay more,” said City Councilman Christopher Logan, referring to the city’s split residential tax rate.

Councilman Dennis Turano was the only one to vote against the amendment, arguing that the change unfairly burdens renters and will reduce housing affordability. He cited a report by the Rhode Island Public Economic Committee (RIPEC) that recommends against shifting the tax burden onto renters.

“This will negatively impact the affordability of Middletown for renters and businesses,” Turano said. “Hundreds of properties will be taxed at 50%. Their taxes will increase by more than 50%. This will take $2 million away from one part of the community and give it to another part of the community to lower their taxes.”

Local resident Leon Amarant also spoke out against the change during the meeting’s public forum.

“In a world where housing is becoming increasingly unaffordable, this policy is actually a really bad policy,” Amarant said. “The data in this article says there will be an average tax increase of $1,400 on these properties. So a $1,400 tax increase on a rental property increases the monthly rent by at least $100.”

The council had considered caps of 5-10% on the difference between residents and non-residents in the past, but ultimately settled on 30%. Some council members suggested the amount could rise to as much as 50% in the future.

“When we introduced it, a lot of people knew it wasn’t a good thing, but we did it anyway,” Turano said. “I also voted for it because I was told it would be a 5% symbol just to show our appreciation for the fact that you are a resident here. I didn’t know it would be used to shift the tax burden.”

Other city councilors argued that the change was necessary to benefit the majority of Middletown residents who are homeowners and cannot pass tax increases on to their tenants like landlords can.

The new 30% tax rate differential will take effect for the next fiscal year. The council’s decision comes as the city is conducting a reassessment of property values, which some say was an unfair process that resulted in drastic increases in value for many.

Watch the meeting

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