NEWS

Should nonprofits pay property taxes?

Council passes contentious resolution, blasts FAA ruling on PILOT funds

By ADAM ZANGARI
Posted 4/25/24

Contentious votes and criticism of a move from the Federal Aviation Administration (FAA) marked the Warwick City Council’s meeting Monday, with two major resolutions passed for the Rhode Island …

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NEWS

Should nonprofits pay property taxes?

Council passes contentious resolution, blasts FAA ruling on PILOT funds

Posted

Contentious votes and criticism of a move from the Federal Aviation Administration (FAA) marked the Warwick City Council’s meeting Monday, with two major resolutions passed for the Rhode Island General Assembly’s consideration.

A vote to recommend that the General Assembly exempted the Rhode Island Coalition Against Domestic Violence (RICADV) from taxation passed, but a 5-4 vote left no margin for error.

The main concern among those voting against the resolution was that more nonprofits would be able to request tax-free status and the city would have no ground to stand on to turn them down.

“There’s a lot of homework that needs to be done about the process,” Ward 5 Councilman Ed Ladouceur said. “If this type of thing were to pass, Pandora’s Box [would be] opened.”

The RICADV, located on Bald Hill Road, would have had to pay $9,223 in taxes annually, though according to Lucy Rios, the director of the RICADV, this was the first year since the organization moved to Warwick in 1999 that they received a city tax bill. The resolution first came up on the March 4 agenda but was postponed until Monday’s meeting.

Ward 8 Councilman Anthony Sinapi, the resolution’s sponsor, said there are no differences between the RICADV’s case and when the Council voted to give the same status to the Center for Mediation, another nonprofit, though he said concerns about the system to exempt nonprofits from taxation are valid. The Council approved tax-exempt status for the Center for Mediation at their Oct. 2, 2023 meeting.

“The floodgates did not open then,” Sinapi said. “There’s nothing different here now than there was before… we wouldn’t make this organization wait through anything more unique than the Center for Mediation.”

Sinapi also agreed with Ladouceur that the city should set up a standardized system to determine whether tax-exempt status should be granted to different nonprofits. The RICADV and Center for Mediation, Sinapi said, were both established and reputable, making him less concerned about that.

Voting against the resolution were Ladouceur, Ward 3 Councilman Tim Howe, Ward 6 Councilwoman Donna Travis and Ward 9 Councilman Vincent Gebhart.

Councilors also expressed their anger with the FAA for determining the Rhode Island Airport Corporation should not have to pay the city $500,000 in Payment In Lieu of Taxes (PILOT). All nine members of the City Council voted in favor of a resolution requesting the General Assembly legislate that the state appropriate $500,000 annually to Warwick to make up for the lost RIAC funds.

City Council President Steve McAllister noted that Warwick’s entire delegation in the state House of Representatives is cosponsoring the bill, which was heard in the state’s Finance Committee on Tuesday.

Howe called it a “punch in the gut,” saying that while the money was “pennies in the bucket” for the FAA, the $500,000 was worth a lot more to the city’s government.

“When someone slips and falls, we send our rescue services,” Howe said. “When someone acts up, we send our police to help escort them out, or the state police comes as well. When something happens in the parking lot, it is our fire department, our police department that responds- not to mention the accommodations that the city makes to accommodate a growing corporate entity that takes up a good chunk of our city.”

Ward 2 Councilman Jeremy Rix lambasted the FAA’s ruling that RIAC cease making the payments, saying that taking into account the property taxes, municipal services and valuations of land surrounding the airport, the city is losing “well in excess” of $500,000 annually because of the airport, and not paying the city that amount was “outrageous.”

Howe said that he would be taking up the PILOT money issue with Rhode Island’s federal representatives.

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  • avamoma

    The missing piece re the non profit is that this entity is LEASING space from a for profit entity, when in every other instance -- elderly, veteran, blind etc the exemption is given only if the person is the recorded owner of the property to get the $400 - $500 credit and in most instances must live in the property for a number of years.

    It is a matter of equality.

    The non profit should record the lease and the assessor should then create a tax parcel assessed and appropriately apportioned to the non profit so that we can clearly see who is taxed and who is exempted .. just like the rest of the human taxpayers in Warwick that are paying the bills.

    Raised my voice several times on this issue and had four members of the council agree, but not enough, so the bill will be presented to the State. Very bad precedent to be established.

    A taxpayer is a taxpayer. Be it human or not. Rules should be equal

    Thursday, April 25 Report this