The Providence mayor's proposal also calls for a 60-member police academy and an 80-member fire academy

PROVIDENCE, R.I. — Mayor Jorge O. Elorza told the City Council Wednesday he was proposing a $716.8 million 2016-17 city budget proposal that would raise property tax bills but cut car taxes and hire new police and firefighters.

Elorza’s budget proposal takes advantage of the city’s recent property tax revaluation, which saw property values rise an average of about 10 percent, though many were higher and some were less.

He proposed a 34-cent cut in the residential tax rate, to $18.91 per thousand of value, and a 25-cent cut in the commercial rate, to $36.50 per thousand. That comes to rate reductions of about 2 percent for residential and 0.7 percent for commercial, but those lower rates will be levied on values that have gone up and that means a net tax bill increase.

Overall, under Elorza’s proposal, the city will take in $13.1 million more in property taxes than it did in 2016-17, which is the maximum increase allowed by state law.

Elorza also proposed a cut in the city’s car tax. His plan calls for raising the exemption for car taxation from $1,000 to $2,000, meaning if a resident’s car is worth $2,000 or less, that car owner would pay no taxes on it. The owner of a $3,000 car would only pay taxes on $1,000 of its value, the owner of a $4,000 car, would pay taxes on $2,000 of value.

Elorza said the exemption increase would wipe out taxes on 6,500 cars completely and cut taxes in half for 12,500 other car owners and by a third for 22,500 more.

“This is a big first step toward addressing the unfair car tax burden on our residents,” said Elorza, who had campaigned on cutting car taxes in 2014.

The cut got a warm welcome from council members. Majority Leader Kevin Jackson said it was “huge, huge, especially for low income people.”

Council President Pro-tem Sabina Matos also liked raising the car tax exemption, noting “we all campaigned on it.”

She added she would withhold final judgement on the budget as a whole until she was able to study the details.

City Council President Luis A. Aponte was circumspect after the mayor’s address, saying he wanted to look more closely at the numbers, particularly where expiring tax treaties may create new revenue opportunities. He said he wouldn't rule out considering seeking state permission to go over the 4 percent cap.

The proposed budget also includes money for a 60-member police academy and an 80-member fire academy. For the police, that would increase the force to 484 sworn personnel, assuming no retirements occur. The fire department would grow to 451, without any retirements.

Elorza had announced plans to hold a fire academy in his budget address a year ago, but wound up holding off on it.

The budget assumes the city will make a $4.1 million payment toward its $13.2 million accumulated deficit by June 30 of this year, reducing it to $9.1 million for the start of 2016-17. The proposed 2016-17 budget calls for paying down $5.3 million more by June 30, 2017, leaving around $4 million to be paid off in $1 million annual payments over the four years after that.

Revaluation Math

Mayor Jorge O. Elorza’s 2016-17 budget proposes cutting the residential tax rate about 2 percent, from $19.25 to $18.91 per thousand of assessed value.

For a house worth $100,000 last year, the tax bill was $1,925.

This year, if that house’s new assessment is $110,000, at the $18.91 rate, the tax bill will be $2,080.10.

That’s $155.10 more that last year, or an 8 percent increase. (If the value went up more, the increase will be higher.)

Budget address highlights

—Increase the car tax exemption from $1,000 to $2,000.

—Lower residential owner occupied tax rate by 34 cents to $18.91 per thousand.

—Lower non-resident residential rate by 34 cents to $32.76 per thousand.

—Lower commercial real estate rate by 25 cents to $36.50 per thousand.

—Tangible rate to stay the same, at $55.80 per thousand.

—New police academy class to add 60 new police officers.

—New fire academy class to add 80 firefighters.

jhill@providencejournal.com

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On Twitter: @jghilliii