City Auditor Raises Red Flags as Providence Nonprofits Ask For Tax Breaks
City of Providence Internal Auditor Gina Costa is raising concerns over non-profits that are asking the city Council for special tax breaks.
The cost of the requests could add to Providence's already shaky finances. Providence Mayor Brett Smiley and the City Council have already raised taxes two of the last three years.
This week, Costa provided the report to the Council Finance Committee, as they considered the latest round of property tax exemptions requested by nonprofits.
According to Costa, tax-exempt properties account for 5.65% of all city properties (2,489 of 44,062) but comprise the largest category at 29.40% in assessed value ($10.5 billion of $36 billion).
“Fundamentally, I oppose every tax exemption if it does not go on the state PILOT,” said Costa in her five-page communication to committee members. “It erodes [the] tax base, which will eventually cause an increase to the tax rate if other revenue is not found.”
"Most importantly, as the number in the exempt category increases (more organizations receive property exemption status), another category is decreased (in value as well as count), resulting in a potential tax increase in another category," she added.
Currently, nonprofits that have sought tax exemptions this year before the City Council include the Community Action Partnership of Rhode Island, Summer Street Apartments LLC, Community Music Works, the Community Action Partnership of Providence, Blackstone Valley Advocacy Center, and MAP Development Corp - amounting to over $600,000 in property tax exemptions in a single fiscal year.
According to Costa, nonprofits that have already been granted tax exemptions (for Fiscal Year 2025) include Project Weber Renew, Center for Southeast Asians, Codac Inc, and the Rhode Island Business Institute. Those total $221,245, and "could have potential implications for FY2026 if abated retroactive."
This growing trend of requests further shifts the tax burden to residential property owners.
Mayor Issues Executive Order
GoLocal has learned that Providence Mayor Brett Smiley issued an Executive Order this week establishing a "Non-Profit Property Tax Exemption Task Force" - and is asking for a report in six weeks.