Finance committee endorses state tax-exemption measures for three local nonprofits

The Providence City Finance Committee voted on May 27 to recommend to the full City Council three separate resolutions urging the Rhode Island General Assembly to grant property tax-exempt status to local nonprofit organizations.

The committee approved the three resolutions after nonprofit representatives described their missions and the parcels involved and after committee members raised questions about precedent, future acquisitions and the city and state timelines for action.

A presenter who identified herself as Eileen Hayes said she is the chief executive officer of a housing nonprofit that owns multiple properties used to house people experiencing homelessness. Hayes told the committee the organization currently pays property taxes on three parcels and asked the committee to endorse a state bill that would provide tax-exempt status for those parcels and for similar purchases made during the bill's effective period. Council members acknowledged the provider's track record serving people with very low incomes but raised concerns about creating a precedent for future acquisitions and asked about the organization's plans. Hayes said the nonprofit received federal appropriations in 2024 and is preparing a master plan; she said residents in the organization's housing generally have incomes at or below 30 percent of area median income.

The committee then considered a resolution supporting legislation to grant tax-exempt status to the Rhode Island Business Development Institute, Inc. (REBA). A representative for REBA described workforce and small-business development services the group provides from a building at 220 Smith Street, said REBA paid about $10,000 in property taxes since acquiring the building in 2022 and asked the committee for a city resolution to accompany state legislation. Committee members noted REBA's partnerships with local institutions and recent losses in funding and approved the resolution.

A third presenter, the long-time executive director for a Southeast Asian community organization, asked the committee to support state legislation to exempt three parcels she said the organization occupies (including an address on Hackwood Avenue and an associated parking lot). The presenter told the committee the parcels had been the subject of prior city-level exemptions and that recent transfers had created uncertainty; she asked the committee to back state legislation clarifying nonprofit exemptions for those parcels.

Committee members discussed each request and repeatedly noted concern about the signal a city resolution could send to other nonprofits seeking exemptions. Several councilors suggested notifying other local nonprofits and making sure any future acquisitions remain targeted to low-income or mission-driven housing. Committee members also said the state legislative calendar made timing an issue and that waiting could reduce the chance of state action this session.

Votes at a glance

- Resolution endorsing House Bill 2025 H-6272 (described in the meeting as an act relating to taxation and properties subject to tax): motion carried; committee recommended approval to full council; tally reported in the record: 4 ayes, 0 no, 0 abstain. The committee's record notes the recommendation will go to the City Council for formal action.

- Resolution supporting legislation to grant tax-exempt status to the Rhode Island Business Development Institute, Inc. (REBA): motion carried; committee recommended approval to full council (vote recorded as unanimous by voice).

- Resolution endorsing House Bill 2025 H-6233 and Senate Bill 2025 S-0197 (both described in the meeting as relating to taxation and properties subject to tax) as they apply to a Southeast Asian community organization's parcels: motion carried; committee recommended approval to full council (vote recorded as unanimous by voice).

Committee reaction and context

Committee members generally expressed support for the specific organizations presenting, and several members praised the nonprofits' work with low-income residents and small-business clients. But multiple members said they were reluctant to set a broad precedent that would make future tax-exemption requests automatic. Councilors asked presenters for details about future property purchases and emphasized that any additional exemptions should align with low-income housing or mission-driven uses.

The presenters said the tax bills under consideration at the state level had deadlines tied to the legislative session and that city support could aid the nonprofits' chances before the General Assembly. Several councilors asked staff or the policy office to notify other nonprofits and stakeholders about the proposals so that the effect of city endorsements on other providers could be assessed.

The committee's recommendations will be forwarded to the full Providence City Council for final consideration.