October 7, 2020
Between Fiscal Years 2021 (July 1, 2020, to June 30. 2021) and 2025 (July 1, 2024, to June 30, 2025) the residential property tax rate in Newport will be impacted by at least three major projects in addition to the annual increases in the City’s (including the School Department) operating expenses. The impact of the proposed School Bonds, which will appear on the November ballot, has received much attention in the media; but it is not the only projected impact on property taxes and should not be considered in isolation. Following is an estimate of those rate increases. The estimate is based on information provided by the City of Newport Finance Department and the Fiscal Year 2021 Newport Budget available on the City’s website.
Bonds to Finance New Rogers High School and Pell School Enhancement
The School Bonds will be issued in three tranches with a total of $106,335,000 not fully impacting the City’s budget until Fiscal Year 2025. At that time the budget will include an entry of $2,866,886 as the City’s share of the bond amortization (net of the Rhode Island anticipated contribution of 52.5% of the cost). The portion of that entry to be financed by residential property taxes is $1,998,220. That will add $.38 per $1,000 valuation, or 3.8%, to the residential property tax rate. The impact on a median-priced residence (excluding estates) of $440,000 will be $167.20.
Other Impacts on Residential Property Tax Rate
The City of Newport Finance Department projects an annual increase in operating expenses (including the School Department) of 2%. By Fiscal Year 2025 the 2% annual increases compounds to a total increase of more than 6%, with the share borne by the residential property tax rate equaling 4.27%.
In the same time frame, Newport will be faced with the cost of moving its Halsey Street Facilities to make room for the Pell Bridge Off-Ramp Realignment. That is estimated to cost $25,000,000 and the impact on residential property taxes will be a 1.92% increase in residential property taxes.
Also, the City will be faced with the need to replace or repair the Van Zandt Bridge at an estimated cost of $10,000,000. The impact on residential property taxes will be a 0.77% increase.
The sum of these three impacts will be a residential property tax increase of 6.96%.
Total impacts on Residential Property Taxes
The increases in the residential property tax rates of the School Bonds and the other increases noted above total 10.76%. This will increase the residential property tax rate per $1,000 valuation by $1.11. The impact on a median-priced residence in Newport (excluding estates) valued at $440,000 will be an increase of $488.40 per year. Residential property owners can use the $1.11 per $1,000 valuation figure to determine the projected tax increase on their own residence.