At a South Kingstown Town Council work session on Oct. 21, town staff presented models showing that a 10% homestead exemption for owner-occupied residential property — the maximum allowed under recently enacted enabling legislation — would create an estimated $4,394,943 revenue shortfall and require a townwide tax-rate increase to make the program revenue-neutral.

Town Manager Jim Manny led the presentation. He said the enabling legislation “authorizes ... homestead exemptions to the owner or owners of residential real estate ... in an amount not to exceed 10% of the assessed value.” He told the council the town’s certified 2025 tax roll and a preliminary 2026 roll under audit were the bases for the models.

The presentation and follow-up discussion focused on three broad approaches: a percentage homestead (10% or 5%), a flat-dollar exemption (examples shown from $10,000 to $200,000), and targeted expansions of existing personal exemptions (elderly, veterans, legally blind). Staff provided the following key numbers from the town tax roll: 14,302 total taxable properties; 9,274 single‑family properties of which 7,443 are billed to the property address and therefore treated as owner‑occupied for modelling (about 80% of single‑family stock); a gross taxable base used in the analysis of roughly $8.83 billion; and a total tax levy of $79,178,696.

Under staff assumptions, a 10% homestead granted to the 7,443 owner‑occupied single‑family homes would lower assessed residential value and create the roughly $4.4 million shortfall. Staff said the estimated effect, holding other revenue items constant, would raise the town’s tax rate from $8.94 per $1,000 of assessed value to about $9.48 — an increase of about $0.54 per $1,000 — to offset the lost revenue. Manny summarized the financial picture: “The total tax levy in this town is $79,178,696.”

Staff also presented a 5% option that roughly halves the revenue loss (to about $2.2 million under the same eligibility assumptions) and a flat‑dollar model in which, for example, a $10,000 exemption would cost an estimated $665,000 in revenue. Staff estimated ongoing administrative costs to operate an annual homestead program at roughly $125,000–$155,000 (including one clerk position, software, and equipment); Manny said a clerk’s fully loaded cost could be about $90,000.

Councilors and staff discussed eligibility and enforcement details: applications would be annual (Jan. 1–May 1), title must be held as of Dec. 31, and the owner must reside at the property for at least six months plus one day. Proposed proof items included three of five documents (voter registration, state tax return, federal tax return, Rhode Island driver’s license/state ID showing the town address, motor vehicle registration). The draft rules presented also included language that would disqualify owners who rent any portion of a single‑family home; councilors said that provision could unintentionally exclude accessory dwelling unit (ADU) owners who live on the parcel and asked staff to revise the language.

Wendy Duarte, assessor staff, warned that the 80% owner‑occupied figure is an assumption based on where tax bills are mailed and could shift when applicants actually file. “It could be higher because of course we're talking about assumptions,” she said. Building‑inspector Jamie Gorman and staff also noted roughly 450 short‑term rentals were identified in town listings; councilors asked staff to provide more precise counts separating year‑round rentals from short‑term (less than 30 days) units.

Council members and members of the public pressed staff to consider targeted approaches. Councilors suggested: (a) prioritizing income‑ or age‑based eligibility to concentrate benefits on lower‑income seniors and longtime residents; (b) capping eligibility by assessed value (for example, only properties at or below the town median); (c) staging a rollout (5% first, then revisit after a rebalance); or (d) pursuing tiered tax-rate options that distinguish resident and nonresident properties. Resident commenter Roberta Mulholland said, “I think we should be looking at an income based homestead tax exemption,” arguing the program should target people unable to remain in their homes. Another commenter, Fred Harrington, urged the council to focus on spending controls rather than broad tax exemptions.

Staff and councilors also discussed process and timing. Because state enabling legislation requires municipal action and tax-roll certification timing affects implementation, staff said a homestead typically would take effect on the first assessment date after an ordinance is adopted. Manny and finance staff said the next certified roll and the town’s revaluation timing (roll certification cited as June 15, 2026 for the 2025 year-end roll) will materially affect calculations. Finance staff clarified the state’s 4% cap applies to the levy, not the tax rate, and that under the models shown the projected levy increase associated with the scenarios would remain under that statutory cap.

Council direction at the end of the session asked staff to return with additional analysis: a breakdown of commercial and non‑residential taxable properties; models that cap homestead eligibility by assessed‑value tiers (examples asked for at and around the town median and at $600,000–$700,000 thresholds); the fiscal impact of expanding existing personal exemptions (elderly, veterans, blind) including multi‑year projections; more precise short‑term versus year‑round rental counts; and examples of tiered tax‑rate approaches used by other Rhode Island municipalities. Staff agreed to return with revised figures at a future meeting.

The work session included public comment on the policy tradeoffs (targeting vulnerable residents versus broad benefit, enforcement and affidavit penalties, and effects on landlords and small businesses). No ordinance or formal vote was taken at the Oct. 21 session; councilors instructed staff to prepare additional options and data for follow‑up discussion.