Split Council Oks Tax Exemption For Chamber



Council chambers were charged with emotion at Monday’s meeting as the Town Council voted in a split decision to enter into a one-year tax abatement agreement with the Southern Rhode Island Chamber of Commerce.

In the 3-2 decision where councilwomen Kathleen A. Fogarty and Mary S. Eddy voted against, the Town Council authorized the town manager to grant the chamber’s Nov. 28 request for a property tax exemption for its office on Old Tower Hill Road.

“We work hard to expand the commercial tax base and skilled employment,” said Joseph J. Iacoi, executive director to the chamber. “Our request is a revenue neutral proposal.” “Perhaps this year it is a revenue neutral request,” said Deborah Bergner, resident, rebuffing the chamber’s request. “But over time taxes go up a few percentage points every year. We will be ever expanding what we give them.”

According to Town Manager Stephen Alfred, the taxable value on the chamber’s land and office is $451,500. Under the current tax rate that translates to about $6,552 in taxes. The council voted to cap the chamber’s abatement at $7,000. He also reminded the council that any tax exemptions are reviewed annually for approval.

“This Town Council, I think, has been very fair to the chamber,” she said.

“I don’t believe we should be doing this because of the other 501c 3 or [501c 6] organizations that could come forward,” Fogarty added.

When the chamber built its office at 230 Old Tower Hill Road in 2007, Fogarty said the chamber asked for help with the tax bill. The town entered into a $7,000 annual agreement. For the first three years, the town paid $3,000 of that to the chamber to hang holiday decorations – like banners and wreaths – in the town.

In March of 2010 the town terminated the holiday decoration program with the chamber, giving it the full $7,000 transfer.

 “It’s about a measure of investment with these agencies,” said Councilman James W. O’Neill. “As in how many residents in South Kingstown use these services. The money that goes in should represent that percentage.”

According to Iacoi, the chamber has about 595 members, which represents roughly 2 percent of South Kingstown’s population. The town’s general fund of the town budget costs about $19.8 million in the current year. A $7,000 exemption represents .0353 percent of that fund.

Several residents objected to O’Neill’s rationale.

“I suggest that if there is a determined need to spend money on business that you set up a grant for small businesses in town,” said Maureen Martin, a lobbyist and director of political activities with the Providence chapter of the American Federation of Labor and the Congress of Industrial Organizations. “I think that at a time when the town is giving less and less to places that are real charity organizations and cutting back that it is a bad time and a bad message to go forward with this.”

Martin pointed out that while the SRI Chamber of Commerce is a registered 501c6 nonprofit, it is primarily a lobbying organization advocating on behalf of for-profit entities.

“With business by its nature, you take that risk going into it and we are trying to do our part by not having a split tax rate,” agreed Fogarty. “In this tough economy, you have to protect the taxpayers and that’s what this council needs to do.”

“The town of South Kingstown is a very business friendly community,” Fogarty added. “We have kept a reasonable tax rate in place for businesses in this town where in other communities that is not the case.”

Fogarty cited nearby towns like Narragansett that charge a higher tax rate per valuation to commercial properties.

“You have got to do some leg work,” said Fogarty. “You just got the name change, why don’t you go forth and ask other communities [for support] and save our taxpayers some money?”

Local chambers throughout the state each have unique agreements with the communities that they serve to keep costs down. In Westerly, the chamber receives a full exemption from property and personal taxes, others pay rent. At the Northern Rhode Island Chamber of Commerce, the eight communities it serves each offer $1,500 for property and other tax fees.

“I do not consider the chamber a charity, and organizations that we abate taxes for are groups that do specific works to help people,” said Eddy.

Council President Ella Whaley and Vice President Carol Hagan McEntee agreed with O’Neill – that an investment in the chamber would translate to a larger return for the community.

“I think we all know what the chamber does to support business and opportunities for growth,” said Whaley as she went down the laundry list of charitable South Kingstown-based organizations that benefit from chamber members and fund-raisers.

“You need to consider the entire community and not just the business people lobbying for this,” said Bergner. “You need to consider people who live in our town who aren’t willing to cover [the chamber’s tax bill]. I don’t think the taxpayers are getting the whole picture.”

When Bergner asked which Town Council members were chamber affiliates and whether this affected their judgment in making a decision, Councilman O’Neill lashed out, calling Bergner’s question of ethics “foolish, stupid, dumb arguments.”

“We are up here to make these decisions,” he said.

Town Solicitor Michael Ursillo said O’Neill and McEntee’s membership with the chamber did not legally disqualify them from participating in the vote because they did not hold paid or leadership positions within the organization.

“Yes it may be legal, but is it ethical,” asked Bergner in an interview after the meeting.

In the end, three council members – taking the majority – voted to approve the exemption.

“This is not automatic that it is going to be granted,” sad Whaley, council president. “This is a yearly thing that comes up at the table.”