Newport Council Comes Out Against Taylor Swift Tax

The Newport City Council voted 4-3 Wednesday night pass a resolution declaring Newport’s objection to the so-called Taylor Swift tax proposed by Governor Gina Raimondo.

The resolution, co-sponsored by Councilors Kate Leonard and Marco Camacho, states that the proposed statewide property taxes on non-owner occupied residences and vacant land valued at more than $1 million would deal a blow to Newport’s tourism economy as well as to middle class folks — not just rich out-of-staters and CEOs with mansions on Ocean Drive.

Leonard, before the vote, noted that the proposed statewide tax would affect just 17 of the state’s 39 cities and towns, including Newport. All the money collected from the tax, which is projected to be about $12 million, would roll into the state’s General Fund.

“It’s never been done, it’s a new kind of tax, I don’t know anywhere where this has been implemented,” Leonard said.

Realtors are particularly alarmed about the proposal, especially since communities with which Newport is compared, like Martha’s Vineyard, Cape Cod, the Hamptons and Nantucket, are not subject to a similar tax.

She also said that taxes tend to stick around once implemented and has never heard of any “legislature that said ’we changed our minds and we don’t need [this tax] anymore.’”

Camacho said that the unlike a homestead exemption, which offers an incentive for locals or people with a second home to stay here, “this is a disincentive.

“This is nothing more than a money grab by the state to transfer monies from municipalites into state coffers,” Camacho said.

Money that won’t be used for city roads, schools.

Councilor Justin McLaughlin suggested the council postpone a vote on the resolution citing a lack of firm data and the early stage of the state budget process.

Comparing the state budget to cloth, McLaughlin said that the tax proposal is one thread in a larger, complicated fabric.

“I’m not sure what pulling this thread out does,” he said. “The General Assembly certainly needs to constrain and control cost of government in Rhode Island, but it also has to pass a balanced budget that meets all needs of the state. In my mind [the resolution] is premature and I’m not persuaded, to be quite blunt, of the negative impact.”

Also suggesting a delay was Councilor Lynn Ceglie, who said that while she appreciates and agrees with a number of points raised against the proposed tax, there is a lack of information to make an informed decision.

Mayor Jeanne Marie Napolitano said that she has a big problem with Newport being hit with the tax while other communities will be spared simply because of property values.

She said that here in Newport, the fact that there are megamillion-dollar mansions clouds the fact the Newport has the highest per-capita percentage of subsidized housing in the state. Yes, there are a lot of second homes in Newport, she said, but “I don’t like the feel of [the tax]. I think it implies that if you do, you have a wealthier community or a community with resources such as these then the state has the ability to tax it.”

The reality is that Newport is a community with a large population of both working class and low-income people, Napolitano said, and the city can no longer afford to be seen as a potential harvesting site for low-hanging revenues by state lawmakers.

McLaughlin, Ceglie and Councilor Naomi Neville voted against a motion to approve the resolution.

The “Taylor Swift Tax” is a term coined by Rhode Island Public Radio’s Scott McKay.

Swift is widely known for her purchase of a mansion in Westerly in 2013 for $17.75 million.

Westerly has the vast majority of $1 million-plus second homes in Rhode Island, with more than 550, according to the state Office of Management and Budget.

New Shoreham, or Block Island, is second with 423. Little Compton lands at third with 222.

Newport has the fourth most, at 217.

The tax apparently would also apply to rental properties.

Councilors in favor of the resolution said that the earlier their objections were heard, the better, since state lawmakers are now picking apart the Governor’s budget proposal.