§ 44-5-2. Maximum levy.
(a) Through and including its fiscal year 2007, a city or town may levy a tax in an amount
not more than five and one-half percent (5.5%) in excess of the amount levied and
certified by that city or town for the prior year. Through and including its fiscal
year 2007, but in no fiscal year thereafter, the amount levied by a city or town is
deemed to be consistent with the five and one-half percent (5.5%) levy growth cap
if the tax rate is not more than one hundred and five and one-half percent (105.5%)
of the prior year's tax rate and the budget resolution or ordinance, as applicable,
specifies that the tax rate is not increasing by more than five and one-half percent
(5.5%) except as specified in subsection (c) of this section. In all years when a
revaluation or update is not being implemented, a tax rate is deemed to be one hundred
five and one-half percent (105.5%) or less of the prior year's tax rate if the tax
on a parcel of real property, the value of which is unchanged for purpose of taxation,
is no more than one hundred five and one-half percent (105.5%) of the prior year's
tax on the same parcel of real property. In any year through and including fiscal
year 2007 when a revaluation or update is being implemented, the tax rate is deemed
to be one hundred five and one-half percent (105.5%) of the prior year's tax rate
as certified by the division of property valuation and municipal finance in the department
of revenue.
(b) In its fiscal year 2008, a city or town may levy a tax in an amount not more than
five and one-quarter percent (5.25%) in excess of the total amount levied and certified
by that city or town for its fiscal year 2007. In its fiscal year 2009, a city or
town may levy a tax in an amount not more than five percent (5%) in excess of the
total amount levied and certified by that city or town for its fiscal year 2008. In
its fiscal year 2010, a city or town may levy a tax in an amount not more than four
and three-quarters percent (4.75%) in excess of the total amount levied and certified
by that city or town in its fiscal year 2009. In its fiscal year 2011, a city or town
may levy a tax in an amount not more than four and one-half percent (4.5%) in excess
of the total amount levied and certified by that city or town in its fiscal year 2010.
In its fiscal year 2012, a city or town may levy a tax in an amount not more than
four and one-quarter percent (4.25%) in excess of the total amount levied and certified
by that city or town in its fiscal year 2011. In its fiscal year 2013 and in each
fiscal year thereafter, a city or town may levy a tax in an amount not more than four
percent (4%) in excess of the total amount levied and certified by that city or town
for its previous fiscal year. For purposes of this levy calculation, taxes levied
pursuant to chapters 34 and 34.1 of this title shall not be included. For FY 2018,
in the event that a city or town, solely as a result of the exclusion of the motor
vehicle tax in the new levy calculation, exceeds the property tax cap when compared
to FY 2017 after taking into account that there was a motor vehicle tax in FY 2017,
said city or town shall be permitted to exceed the property tax cap for the FY 2018
transition year, but in no event shall it exceed the four percent (4%) levy cap growth
with the car tax portion included; provided, however, nothing herein shall prohibit
a city or town from exceeding the property tax cap if otherwise permitted pursuant
to subsection (d) of this section.
(c) The division of property valuation in the department of revenue shall monitor city
and town compliance with this levy cap, issue periodic reports to the general assembly
on compliance, and make recommendations on the continuation or modification of the
levy cap on or before December 31, 1987, December 31, 1990, and December 31, every
third year thereafter. The chief elected official in each city and town shall provide
to the division of property and municipal finance within thirty (30) days of final
action, in the form required, the adopted tax levy and rate and other pertinent information.
(d) The amount levied by a city or town may exceed the percentage increase as specified
in subsection (a) or (b) of this section if the city or town qualifies under one or
more of the following provisions:
(1) The city or town forecasts or experiences a loss in total non-property tax revenues
and the loss is certified by the department of revenue.
(2) The city or town experiences or anticipates an emergency situation, which causes or
will cause the levy to exceed the percentage increase as specified in subsection (a)
or (b) of this section. In the event of an emergency or an anticipated emergency,
the city or town shall notify the auditor general who shall certify the existence
or anticipated existence of the emergency. Without limiting the generality of the
foregoing, an emergency shall be deemed to exist when the city or town experiences
or anticipates health insurance costs, retirement contributions, or utility expenditures
that exceed the prior fiscal year's health insurance costs, retirement contributions,
or utility expenditures by a percentage greater than three (3) times the percentage
increase as specified in subsection (a) or (b) of this section.
(3) A city or town forecasts or experiences debt services expenditures that exceed the
prior year's debt service expenditures by an amount greater than the percentage increase
as specified in subsection (a) or (b) of this section and that are the result of bonded
debt issued in a manner consistent with general law or a special act. In the event
of the debt service increase, the city or town shall notify the department of revenue
which shall certify the debt service increase above the percentage increase as specified
in subsection (a) or (b) of this section the prior year's debt service. No action
approving or disapproving exceeding a levy cap under the provisions of this section
affects the requirement to pay obligations as described in subsection (d) of this
section.
(4) The city or town experiences substantial growth in its tax base as the result of major
new construction that necessitates either significant infrastructure or school housing
expenditures by the city or town or a significant increase in the need for essential
municipal services and such increase in expenditures or demand for services is certified
by the department of revenue.
(5) In the city of Providence, for fiscal year 2026, any additional revenue generated
from the Class 2B rate exceeding twenty-eight dollars and eighty cents ($28.80) per
one thousand dollars ($1,000) may exceed the maximum levy. For the purposes of this
subsection, "Class 2Aâ€� and "Class 2Bâ€� shall have the same meaning as in § 44-5-11.18(1)(ii).
(6) Effective for tax assessment dated on or after December 31, 2025, and subject to all
requirements set forth in this section, the taxes levied on new housing units added
to the municipal tax base during a fiscal year may exceed the maximum levy. For the
purposes of this subsection, subject to the qualifying requirements below, new housing
units shall include newly constructed residential properties, meaning single-family
homes, two-family homes, single-family attached structures, multi-family dwellings,
mixed-use developments where residential units constitute at least fifty percent (50%)
of the building's total square footage as well as existing buildings converted into
residential housing units qualifying under adaptive reuse in § 45-24-37; provided such conversions meet all applicable zoning and building code requirements
and increase the municipality's total housing stock. New construction shall also include
modular and manufactured homes. This provision shall apply provided that:
(i) A city or town has issued over ten (10) certificates of occupancy for new housing
units during the fiscal year in which the exemption is sought; and
(ii) Such units are part of a development project that includes at least ten percent (10%)
of the units designated as low- or moderate-income housing as defined in §§ 45-53-3 and 42-128-8.1; and
(iii) Such units are taxed utilizing the same valuation methods and rates as similar units
in the respective city or town; and
(iv) The taxes levied on these qualifying new housing units may only exceed the maximum
levy for the fiscal year in which the certificate of occupancy is issued and two (2)
fiscal years thereafter in which the municipality shall phase in the full taxes for
these units into the maximum levy by the fourth fiscal year following the issuance
of a certificate of occupancy for the new housing unit(s).
(e) Any levy pursuant to subsection (d) of this section in excess of the percentage increase
specified in subsection (a) or (b) of this section shall be approved by the affirmative
vote of at least four-fifths (â…˜) of the full membership of the governing body of the
city or town, or in the case of a city or town having a financial town meeting, the
majority of the electors present and voting at the town financial meeting shall also
approve the excess levy.
(f) Nothing contained in this section constrains the payment of present or future obligations
as prescribed by § 45-12-1, and all taxable property in each city or town is subject to taxation without limitation
as to rate or amount to pay general obligation bonds or notes of the city or town
except as otherwise specifically provided by law or charter.
(g) Notwithstanding anything to the contrary, the town of Little Compton is permitted
a one-year levy cap exemption for fiscal year 2026 not to exceed twelve percent (12%),
and subject to approval by the Little Compton Financial Town Meeting.
(h) Notwithstanding anything to the contrary, the City of Providence is permitted a one-year
levy cap exemption for fiscal year 2026 not to exceed eight percent (8%).