Charlestown residents may soon see a major property tax savings

Town Council asks legislators to seek General Assembly approval for a Homestead Exemption

By Will Collette

Thank you to our CRU Charlestown Town Council
members. Looking forward to quick action to enact a
town ordinance.

In many Rhode Island municipalities, lots of property is owned by non-residents. This is especially true in coastal communities like Charlestown where waterfront properties are often bought by wealthy non-residents for far more than the tax assessed value of those properties.

Charlestown’s summertime population jumps from around 8,000 to almost 30,000. The influx of non-residents requires the town to maintain an infrastructure that supports three times the number of full-time residents. We need roads, facilities, town staff and public safety investments to support all those extra people. The town even organizes volunteers to pick up trash from around their homes and along the roadways.

Our neighboring towns address these burdens by offering a Homestead tax break to permanent residents that, in many municipalities, takes the form of a reduction in the tax assessment. Most recently, South Kingstown got General Assembly approval for a new ordinance that would reduce the tax assessment of full-time residents by up to 10%.

On April 14, the Charlestown Town Council, comprised entirely of Charlestown Residents United (CRU) members, voted to seek General Assembly approval for similar homestead exemption similar to South Kingstown. It’s very likely the legislature will approve this request.

What does this mean to you?

In 2011, Charlestown Town Democrats proposed a flat $1000 homestead tax credit, an idea that was obviously ahead of its time, but were beaten down by the Charlestown Citizens Alliance. They organized what I dubbed “the riot of the rich,” mobilizing non -resident property owners to violently protest the concept.

The CCA and its absentee owner-benefactors argued a tax credit wasn’t fair (“class war” they said) that could motivate wealthy property owners to leave or to boycott local services and charities.

Those arguments were pretty lame back in 2011 and even more so today. Out-of-state owners are paying mega-bucks for Charlestown properties. If they decide they want to leave because their tax goes up by a few thousand, that’s fine since we seem to have a big pool of buyers ready to pay as much as a million or two more than assessed value.

And seriously, are these absentee homeowners going to mow their own lawns, fix their own plumbing, clean their own houses and swimming pools, or bring their groceries with them from Manhattan?

I'm sure non-residents grab a bite or two at local eateries, but I suspect their tastes run more to the cuisine at Ocean House, not Monahans.

As for donations, other than the CCA’s campaign fund, where else do donations from non-residents go? 

All told, the main contribution non-residents make to Charlestown’s economy is in the form of their property taxes. A Charlestown homestead exemption will simply increase their share to compensate the town for their out-sized impact on the town’s costs.

Depending on the final size of the exemption, i.e. what percentage, and the assessed value of your home, you will save on taxes and pass the cost of those savings onto to absentee landowners.

Only a tiny peep from the CCA

I was a bit surprised to see a relatively muted response from the Charlestown Citizens Alliance to the Town Council’s recent action compared to their 2011 freak-out.

Here’s how they describe the history of the fight over the homestead tax break:

Over the years, there have been proposals to enact a Homestead Exemption. These would have exempted a percentage of the assessed value of real property from taxation for certain taxpayers. One group of taxpayers would have received the exemption, but because the town would have needed to collect a given amount of revenue to provide services and support capital improvements, another group of taxpayers would have needed to pay the difference. None of these proposals has received support from the community in the past.

Notice no mention of the CCA’s leadership of the opposition to the homestead tax break since 2011. They are also cagey about saying the truth: the homestead tax break would benefit those of us who make Charlestown their home while non-resident property owners would, as the CCA puts it, “pay the difference.” Another important, but unmentioned, factor is how much the CCA counts on political donations from non-residents to fill their campaign coffers.

The CCA also claims there was no support for a homestead tax break from the community. Well, the CCA ensured there would be none by shutting down all discussion about this tax break for years after their political donors objected. Town voters rejected the CCA in the last two elections so the CCA’s claim is no longer valid.

Finally, the CCA blandly complains that “There seems to be a rush on the part of the Council to get this authority” but admit “it is late in this year’s legislative session.”

Even though it is late in the 2025 General Assembly session, Town Solicitor Peter Ruggiero told the Council on April 14 that there were ways to get action on legislation this year.

Back in 2011, I supported a flat rate Homestead tax credit of $1000. I still like a flat rate because it would provide the greatest amount of tax relief to owners of lower priced homes. But I’m OK with a 10% exemption. 

Under the 10% plan, the higher your assessment, the bigger your assessment. That obviously favors high-end properties, unless the Council decides to cap the assessment subject to exemption, like $1 million just for the sake of argument. But everyone who makes Charlestown their home can benefit.

These are all questions to be addressed if the General Assembly authorizes Charlestown to proceed to craft an ordinance. That is a lengthier process and all the more reason to take this modest first step. That’s not rushing it – this tax break for Charlestown residents is 14 years overdue.

Pusher of land trust scam now Trump advisor

“Worst of the Worst” tax dodge

By Peter Elkind for ProPublica

Even as he has vowed to eliminate “every dollar of waste, fraud, and abuse across the federal budget and operations,” the new acting administrator of the General Services Administration, Stephen Ehikian, has appointed a senior adviser whose firm used to specialize in tax transactions that a bipartisan Senate committee excoriated and that the IRS branded as “abusive” and among “the worst of the worst tax scams.” The adviser has been battling the tax agency in court over $4 billion in disallowed deductions for thousands of his clients.

The GSA, the federal agency responsible for managing the government’s land and property, will now be taking advice from Frank Schuler IV, the 57-year-old co-founder and longtime president of Ornstein-Schuler, an Atlanta-based real estate investment company. Schuler’s firm was for years among the most prolific promoters of tax-shelter deals known as “syndicated conservation easements.”

Schuler and his colleagues exploited a tax deduction that was created to reward landowners who give up development rights for their acreage, usually by donating those rights to a nonprofit land trust. When used as intended, conservation easements can preserve pristine land, sometimes as a park that the public can use, and reward the land donor with a charitable tax deduction.

But middlemen like Schuler’s firm turned the tax provision into a highly profitable business, packaging easements into what were essentially outsized tax deductions for purchase. After snatching up a cheap piece of vacant land, Schuler and others typically hired a private appraiser willing to declare that the property had huge untapped development value — that it was suited to become anything from a gravel mine to a luxury resort — and was worth many times its purchase price. 

They then sold stakes in the easement donation to rich individuals, who claimed wildly inflated tax deductions based on the appraisal, cutting their taxes by twice as much as they’d invested. ProPublica first began investigating the syndicated easement business, which has cost the government tens of billions in tax revenue, back in 2017.

The IRS, the Justice Department and Congress struggled for years, through public warnings, hundreds of audits, tax court cases and criminal prosecutions, to shut down the scheme. Those efforts were countered by $11 million in lobbying expenditures from the promoters and the creation of a Washington-based trade group, called Partnership for Conservation, which Schuler founded. Syndication advocates pressed Congress to defund the IRS crackdown.

Suckers!

They paid their fair share, unlike Trump, Musk and America's super-rich

Heat Pumps: Deep Dive Into Whether, and How, to Make Switch

They work and save you money

By Craig O'Connor / ecoRI News contributor

When Kyle O’Neil bought his home in Ashaway, R.I., three years ago, he asked his home inspector and his real estate agent, “What do you think about heat pumps for this house?”

They answered with variations of, “We’re not in the proper climate, heat pumps aren’t for the Northeast.” O’Neil didn’t know it then, but they were wrong.

It’s a common experience: Rhode Islanders interested in switching to modern heat pump technology — which is both more efficient than other heating and cooling options and has a far less negative impact on the environment — often hear myths and concerns based on outdated or false information. And, in our busy lives, that’s usually where the story ends.

“I’m too busy at the time to do research because I got a zillion other things, I’m buying a house, I’ve got three young kids,” O’Neil said. “I didn’t even think about it.”

In effort to encourage the transition to heat pumps, Rhode Island has joined eight other states in the Northeast States for Coordinated Air Use Management (NESCAUM)-written pledge that electric heat pumps will make up at least 65% of all residential heating and cooling products shipped to Rhode Island and other partner states by 2030, and raise that to 90% by 2040. 

However, according to the latest survey by the Energy Information Administration (EIA, 2020), Rhode Island uses electricity for only 11.9% of heating needs, which includes inefficient electric resistance as well as heat pump technology, meaning Rhode Island is far from the 16% average across the nation.

There are many preconceptions about heat pumps, which can heat and cool a home by replacing both a traditional air conditioner and a home heating system such as a furnace, boiler, or inefficient baseboard heat. 

EDITOR'S NOTE: Cathy and I have been satisfied heat pump users for over 15 years. We have a combo ductless air conditioner and heat pump system that works efficiently and cuts our energy bills. Ductless units, also called mini-splits, are ideal for older New England homes that don't have HVAC duct work. You also get a substantial cost reduction through the federal tax credit of up to $2000 and the state rebate of $1000 or more depending on the size of the unit. - Will Collette

Save on taxes

 

Sticker shock from new Charlestown tax assessments

Charlestown’s tax base rockets up by 47%: how this will affect your taxes

By Will Collette

Charlestown property owners received letters this week from town Tax Assessor Ken Swain showing the results of the town’s full reassessment of property values.

Before the reassessment, Charlestown’s “Grand List,” the total value of taxable property, was $2.88 billion. The new number is $4.22 billion, a rise of $1.34 billion or 47%. This will mean higher taxes for some, lower taxes for others and for some, almost no change at all.

Big bucks being paid mostly by wealthy out-of-staters for shore property propelled this increase in the total tax base. However, on a personal level, this has meant an assessment hike for nearly all of the rest of us, averaging around 50%.

For example, Cathy and I received Swain’s notice that the assessment on our home and adjacent vacant lot, five acres total, rose by 65% to just under $1 million ($998,000).

In past articles about fake fire districts, two of which are in Charlestown, I compare our 2.5-acre north of One vacant lot to a 2.5-acre vacant lot owned by the Central Quonochontaug (Fake) Fire District. Both are zoned R3A. Our 2.5-acre lot is now assessed at $262,300 while its southern counterpart is assessed at only $33,700.

We’ll get back to that issue: how the Central Quonnie and Shady Harbor (also fake) Fire District evade Charlestown property taxes when neither Fire District actually fights fires. In reality, they are both jumped up homeowner associations who gamed the system. Anyway, more on that later.

Incidentally, Ken Swain’s office maintains a free, open database you can access for data on every property in Charlestown. CLICK HERE. All information disclosed in this article is public.

For years, the Charlestown Citizens Alliance (CCA) focused only on the tax rate, noting how low it is compared to most other municipalities, including those that provide far more services for the money. 

But in the real world, what you actually pay in taxes is the product of multiplying the tax rate (projected to drop to $5.71 per $1000 in value from the current $8.17) times the assessment.

My friend and Progressive Charlestown co-founder Tom Ferrio did this analysis for Charlestown Residents United:

New Valuations and Taxes

Use our tax calculator below to estimate you taxes with the new assessment value.

The new Charlestown property valuation letters arriving in the mail have caused a lot of discussion and concern, with many property values increasing by 40% to 50%.

It is very important to understand that a new tax rate is computed every year based on the budget for the town and the total value of the properties in the town. The assessed value of your property going up does not mean that your taxes will necessarily go up - with the inflation in property values over the last several years, the effect on your taxes depends on whether your property value went up more or less than the average increase in our town.

The town website has posted an estimate of the tax rate for 2023-24 tax year based on the new property valuations and the current draft budget. That estimate shows the tax rate dropping dramatically: from $8.17 per $1,000 valuation in the current year to $5.71 for the 2022-2023 fiscal year.

Incredibly easy to use. Plug in the old and new
assessments that are in Swain's letter.

We have provided this online calculator to see your current and projected taxes.

You can get your assessment valuations from your recent letter ( Old Assessment and New Assessment) or the tax database here (2021 Total Valuation and 2022 Total Valuation).

Or you can compute the taxes manually:

Multiply your 2021 Total Valuation divided by 1000 by $8.17 to get a tax bill estimate for next year.

Multiply your 2022 Total Valuation divided by 1000 by $5.71 to get a tax bill estimate for next year.

Thanks, Tom. I used Tom’s calculator to project our new tax bill. It looks like Cathy and I will be paying an additional $250.

When Cathy and I bought our house in 2000 and the adjacent lot in 2001 for a total of $396,000, we never expected to be property millionaires. Thanks to the buying binge by non-residents, lots of us full-time Charlestown residents saw the theoretical (and taxable) value of our homes skyrocket.

Can we actually sell our property for a million bucks? We can ask, but we might not get. Ex-CCA Town Councilor Bonnita Van Slyke put her Arnolda waterfront estate on the market for $3 million. After a year of no takers, she ended up settling for $2 million.

Mortgage rates are at a 15-year high and there is a limit to what the market for homes for working families will bear. While rich New Yorkers may slap down the cash here in Charlestown because our prices beat the Hamptons, it’s a different market north of Route One.

The Providence Journal notes there is an overall shortage of houses, especially acute under $500,000. Even though CCA leader Ruth Platner does not believe in the law of supply and demand, the market does. Shortages really do drive up prices, despite what Ruthie thinks. 

Right now, you need to be rich to get what you want in the housing market. The only proactive step we can take to bring prices down to some semblance of affordability is to increase the supply.

I think there are three take-aways from the new tax assessment numbers.

First, fake fire districts need to be abolished.

Unless a fire district actually devotes most of its resources to fighting fires, it is not worthy of the name. Indeed, these phony fire districts are an insult to real firefighters.

We have two fake fire districts: Central Quonnie and Shady Harbor. There are more than a dozen others dotting the coast. You can read more about them in Alex Nunes excellent series on fake fire districts on The Publics Radio. CLICK HERE.

Shady Harbor FD pays ZERO property tax to Charlestown despite owning six prime pieces of coastal real estate. Their 19.26 acres total includes a private beach where public access is strictly forbidden, a dock, boat launch, three vacant lots on Meyerand Drive and a pumping station for private water, assessed at $247,900 though actually worth millions. The Fire District pays nothing.

Central Quonnie is not tax-exempt, but its property tax assessments are insanely low, as the example I used comparing my 2.5-acre vacant lot with a similar lot owned by Central Quonnie where my assessment is eight times higher than Central Quonnie’s.

Part of Central Quonnie's portfolio, this 4.1-acre tennis 

complex is assessed at only $130,100 

(Charlestown Tax Assessor) 

They own 10 prime coastal properties totaling 38 acres with tennis courts, a sports field, private beach docks, boat launches and a beach club as well as a private water system plus five vacant lots on Surfside Ave. 

Their total assessed, taxable value for all that prime property is $738,323. If they weren't masquerading as a fire district, their assessment would be in the tens of millions. 

Almost 60 prime shore acres owned by the two fake fire districts are not being taxed fairly or at all. We are subsidizing two homeowners’ association to the tune of millions of dollars. That’s just wrong.

Second takeaway: full-time residents deserve a tax break.

The CCA, which counts on non-residents for political donations, has been adamantly opposed to the whole idea of the “Homestead Tax Credit.”

Homestead tax breaks are available in just about every state and are a common practice among coastal communities like Charlestown to compensate those of us who call Charlestown home for the added costs we pay for our summer people.

Narragansett has had this popular program for several years. North Kingstown added it a couple of years ago. Newport is adding it this year.

Homestead tax breaks can be designed in several different ways to reduce full-time homeowners’ taxes. A simple option would be to simply assign a dollar figure, maybe $1000 as town Democrats suggested in 2011, or $5000 or whatever is fair and affordable, to be credited against your tax bill. Or it could be a percentage of your assessment. I like the dollar amount for its simplicity.

Whatever the reduction in taxes for full-time resident homeowners costs the town, it's added back through the tax rate paid by all taxpayers. 

The CCA screamed about the “unfairness” of town Democrats’ proposal in 2011 calling the idea “discriminatory.” It's not, especially since part-time residents probably get a homestead exemption where they live.

Summer visitors can triple Charlestown’s population. Taxpayers support a year-round infrastructure to accommodate that surge in visitors from Memorial Day to Labor Day. We pay for their services. We pick up their trash when they leave it by the roadside. We are also paying for them through our higher tax assessments as their properties drive up housing costs.

Third takeaway: we need to make sure our tax credit system serves those who need it.

Charlestown has an array of tax breaks available to veterans, the blind, handicapped, disabled and low-income elderly. I have long advocated for a new tax credit for volunteer firefighters both as a reward for standing ready put their lives on the line for us and to aid in recruitment and retention.

Do all individuals and households who are eligible even know these tax breaks exist? Qualified property owners need to apply – no one gets the tax break automatically. Links to the tax breaks for most categories plus the FFOS (Forest, Farm and Open Space) tax break are now on the Tax Assessor’s Office web page (left-hand column). 

I would like to see the town do a special issue of the Pipeline mailed to all households.

Whether you see the huge rise in property assessments as good news or bad news, it’s all the more reason why Charlestown needs to take a cool, critical look at tax policy fairness. 

Taxes are the price we pay for a civilized society. While we may never develop a perfect system, we should nonetheless continue to make improvements whenever and wherever we can.

Elon Musk's Billionaire Taxation Misinformation

Don't tax gazillionaires, he says 

BOB LORD,  WILLIAM RICE by Inequality.org

Elon Musk, the planet’s wealthiest person, is once again spreading disinformation in the hopes of keeping billionaires like himself from having to pay their fair share at tax time.

This latest disinformation involves the big chunk of Musk’s Tesla shares that he sold last year. Musk is claiming that he made this sale — and incurred a big tax bill in the process — because he polled his devoted fans on Twitter and they told him to make the sale. The reality: Musk was sitting on a stack of Tesla stock options about to expire. 

Options give their holders the right to buy shares at a predetermined, usually below-market price. Musk’s expiring options would have become worthless if he didn’t exercise them. In 2021 he was also facing a reasonable chance that federal tax rates on big incomes would be higher this year. Given all these factors, exercising his options last year made perfect business sense for Musk.

By claiming otherwise, by claiming his stock trading merely reflected his faith in his followers, Musk scored a disinformation two-fer. He could position himself as a “man of the people” by palming off a clear-eyed business decision as a victory for economic democracy. 

Musk also, by publicizing the tax bill on his stock trades last year, could claim that our current rotten tax system actually does tax the rich. In fact, Musk typically pays only a tiny share of his huge annual income in taxes. In one recent year, Musk paid nothing at all in federal income tax.

Now, in the wake of this two-fer, Musk and his fanboys are claiming that SpaceX and Tesla would not exist today had President Biden’s newly proposed Minimum Billionaires Income Tax been the law of the land back in 2008, the year both companies were experiencing growing pains and a nasty divorce had Musk on the financial ropes. This claim turns out to be dishonest, arrogant, and illogical, all at once.

Charlestown, we have a budget

It’s an election year budget

By Will Collette

On June 6, Charlestown voters will have their say about the proposed 2022-23 budget.

This is an election year and the CCA wants to hold on to its Town Council majority as it has for over a decade. 

Between Planning Commissar Ruth Platner’s shady land deals and the $3 million oopsie, this budget has become a political statement that the CCA hopes will get voters to forget their financial escapades over recent years, including their record of raising taxes. This year, the tax increase is disguised.

After months of defensiveness, the Budget Commission has come forward with a $28,939,953 total budget that they say is around $1.3 million less than last year.

You may recall that last January, the Budget Commission was told by town auditors that a string of errors stretching over more than a year led to the $3 million oopsie. In plain terms, the Budget Commission discovered it had $3 million less in its unassigned fund balance than it thought and spent mainly to try to prevent a hike in the tax rate.

The town, and particularly the Charlestown Citizens Alliance (CCA) prefer to call the oopsie a mis-assignment, misallocation, or some other “mis” word (misdirection comes to mind), any term other than a MISTAKE.

Throughout the long reign of the CCA, we’ve come to learn the CCA never makes a mistake, or at least will never admit to one. Not only does the CCA seem incapable of admitting error, but they will go on the attack against anyone who points out their mistakes.

The $1.3 million reduction in the proposed budget should actually be a million dollars higher because three one-time expenses in the current year’s budget are not in the proposed budget: the Old Mill Road project at $1.8 million, OPEB healthcare at $285,000 and an extra pension contribution of $230,000.

Allan Fung, who is happy to take our money

Those items total $2,315,000, not $1.3 million, begging the question “where did that $1 million go?” Bad arithmetic? Another oopsie? Did it get dropped into one of Charlestown’s mysterious budget black holes? Or is it simply another one of those mistakes the CCA will never admit it made.

The Budget Commission also threw in $410,617 of one-time new funding from the American Rescue Plan Act (ARPA), even though we just hired two consultants, one being Republican Second Congressional District candidate Allan Fung, to help us figure out how to properly spend the money.

But why should that concern deter the Budget Commission from spending the money anyway? Hey, they only listen to consultants who tell them what they want to hear as they did when they came up with a new Unassigned Fund Balance policy.

Plus, they are apparently violating their own new fund balance policy by using one-time funds – the ARPA money – to pay for annual operating expenses.

One budget surprise is the lack of any apparent effort in the proposed budget to re-build the unassigned fund balance that was $3 million less than the Budget Commission thought it was. Their new fund balance policy anticipates building up the surplus to $10 million which would have required a whopping tax hike.

But nope, it’s not there and I’ll bet Budget Commission chair Dick Sartor is eating his shorts over the political choice to not try to rebuild the Unassigned Fund Balance.

The proposed budget presumes a $369,662 payment increase for the Chariho School system. About half of Charlestown’s total budget is spent on Chariho.

However, Chariho’s budget was rejected by a majority of voters in Charlestown, Hopkinton and Richmond earlier this month.

Chariho is putting a new reduced budget before the voters on May 4. We don’t know yet what effect that will have on the $370 thousand increase assumed in our proposed budget.

Even though the proposed budget anticipates an increase in departmental expenditures of around $200,000, it expects to make up for it by cutting $1.4 million in capital expenditures (hopefully by ending Ruth Platner’s open space buying spree, but I’m not holding my breath).

They also expect to collect an additional $859,791 in taxes even though they call for holding the tax rate (a.k.a. the mil rate) at $8.18 per thousand. The only way to increase tax collections by a projected 3.73% is through higher tax assessments. No matter how you parse it, this is a major tax increase.

Charlestown’s tax base

Right now, the Budget Commission estimates that all the taxable property in Charlestown is worth almost $3 billion. The exact total of our “Grand List” is $2,887,328,019. About 60% of that is south of Route 1, at least as long as that land stays above water.

This is the real underpinning for the town’s finances. The pandemic brought an influx of rich people from out of state who bought property in town and drove up property values. That’s not going to last especially as the impact of the climate crisis sets in.

I asked town GIS Specialist and map-maker Steve McCandless if this map
included the property owned by the fake fire districts. He replied that he couldn't
answer that question before running it up the chain of command.
I'm not holding my breath.

More than half of the property in Charlestown simply doesn’t get taxed. Every time Ruth Platner buys another major parcel of land to set aside as open space, she takes taxable property off the tax base.

There is another shady deal in the works for the town to buy another over-priced parcel for at least $800,000 (CLICK HERE for details). Not only will that land cost a lot of money, it will remove $312,800, its current assessed value, from the tax base.

Platner has done several deals like this in the past few years that cost money to buy and reduce our tax base. And she and her husband Cliff Vanover claim – without evidence – that this actually boosts the tax base.

We also lose tax base dollars for the property owned by Charlestown’s two fake fire districts – Shady Harbor and Central Quonnie. Shady Harbor’s real estate holdings are tax exempt and Central Quonnie’s are assessed at ridiculously low amounts. CLICK HERE for more details.

We lose tax base dollars on properties that are improperly zoned. Our former town Planner Ashley Hahn raised this issue years ago and Commissar Platner promised to fix it, but never did. CLICK HERE for details.

We don’t tax properties owned by the town, the state, the federal government, most non-profits, and churches. We give tax discounts to veterans, the disabled, low-income elderly, and the blind. Lots of land is tax-favored when the owners grant conservation easements or take part in the Farm, Forest and Open Space program.

These latter tax policies are reflections of town values to honor veterans, help people who need it and encourage land conservation. But they reflect the zero-sum nature of budgeting: to reduce taxes for some means increasing taxes for others.

What’s not in the budget, but should be

A tax credit could put a big dent in CFD's volunteer shortage

This budget, like past CCA budgets, fails to do some things I think would be good for Charlestown. 

For example, it would help our active fire companies to fill their ranks with much needed volunteers if the town offered a substantial tax credit to those who serve.

We could use our tax policy to encourage the switch to green energy by offering property tax credits to homes and businesses that install and maintain energy sources that reduce our dependence on fossil fuels.

Finally, we should re-think whether to offer year-round residents a Homestead Tax Credit as many coastal communities do – e.g. Narragansett where full-time residents get a 10% discount on their assessments. CLICK HERE for details.

The CCA killed the idea of the Homestead Tax Credit at the behest of their financial supporters among the absentee property owners. Since some of them are now permanent residents, maybe it’s time to look at the idea again.

Taxes are the price we pay for a civilized society, as the late Supreme Court Justice Oliver Wendell Holmes put it. I don’t mind paying taxes as long as they are fairly levied and properly spent. But in Charlestown, we are far from that ideal.

Time for the middle-class to get overdue relief

Biden: Tilt taxes to the middle class

By Gerald E. Scorse, Progressive Charlestown guest columnist 

The bad news is that taxes in America are tilted in favor of the rich. The best news is that we could be only weeks away from a tilt in favor of the middle class: the reforms President Biden is urging to help balance the Administration’s $3.5 trillion budget bill. 

The changes won’t be going as far as the president first proposed. Congress writes the laws, and House Democrats have already dialed back on Biden’s wish list.  Even so, the bill will almost certainly reflect a sharp shift in America’s priorities. 

As Biden himself puts it, “My tax policy is based on a simple proposition, which is to stop rewarding wealth and start rewarding work a little bit.” 

Republicans oppose everything, and a few Democrats have differences as well. Here’s a quick rundown of some major items as legislators continue to shape the final bill. 

A cut in the top marginal rate was part of Trump’s 2017 tax giveaway. Biden wants the rate back where it was, at 39.6 percent. It would apply to taxable incomes above $400,000 for individuals and $450,000 for married couples. 

The tax break on capital gains is a huge part of America’s tax handout to the haves. The current levy on long-term capital gains tops out at 20 percent, little more than half the top rate on income from work. Biden hoped to equalize those rates, but that hope is history. 

Long-standing inequities still left in Charlestown’s tax system

Fake fire districts are one of the most outrageous rip-offs of them all

By Will Collette

The Quonnie Central Beach Fire District's 28 acre rec center,
assessed at $98,000. This is the photo the Charlestown Tax Assessor
posted in 2014, not the one being used today. See below, right for the
photo currently being used to depict this property

All of us who own property in Charlestown (homes, cars or land) will soon receive our new tax bills based on a lower tax rate, higher tax assessments and a town budget based on financial assumptions that no longer make sense.

I’m fine with paying taxes. I subscribe to late US Supreme Court Chief Justice Oliver Wendell Holmes’ view that “taxes are what we pay for a civilized society.”

What I do expect is tax fairness – that people pay their fair share.

In Charlestown, our town is financed through the annual property tax where the bottom line is the assessed value of our property multiplied by the tax rate (called a "mill rate" in some jurisdictions).

The tax rate is the dollar amount we pay on every $1000 in property value assessment. A $10 rate on a $100,000 property will lead to a total tax bill of $1,000.

In the decade Charlestown has been under the control of the Charlestown Citizen Alliance (CCA Party), they have tried to increase tax bills every year, either by raising the tax rate or through higher assessments.

This year, we may see an actual drop in the tax rate BUT most of us saw large increases in our property assessments, unless you are among the chosen few, so we will pay MORE in taxes. Again. 

Those new assessments are based on the hypothetical housing market but NOT on the fact that, as of February, the country entered a new recession that may make the 2007 Great Recession seem mild by comparison.

That aside, when it comes to fairness, Charlestown tax policies allow a number of its prominent property holders to dodge paying their fair share of taxes.

Today, we’ll look at one of the most glaring examples of Charlestown tax-dodging.

At some point after my 2014 expose on fake fire districts, the Tax
Assessor's Office replaced the photo of the tennis court (above, left)
with this one of the shed that is barely visible in the background of the
tennis court photo. Which photo do YOU think is the more honest
representation of this property?

In 2014, Progressive Charlestown exposed one of Charlestown’s biggest tax rip-offs in the form of two so-called “Fire Districts” that have nothing to do with fighting fires: the Shady Harbor Fire District and the Quonochontaug Central Beach Fire District. 

CLICK HERE and HERE.

These fake Fire Districts mainly provide services the rest of us have to pay for – and then some. 

They offer trash collection, plowing and street maintenance, beach, docking and recreational facilities for their privileged members.

Their “Fire" district tax – the equivalent of club or association fees other gated neighborhoods charge - is deductible from their state and federal income taxes, even though the value of property tax deductions changed after Trump’s infamous tax cut bill.

But the essential fact is these two “Fire” Districts don’t fight fires – they have no fire stations, fire trucks, fire-fighting equipment or volunteer fire fighters. It’s possible they may have a fire extinguisher on the patio next to the Quonnie Central Beach tennis courts. They’re more like beach clubs or ritzy residents’ associations.

Both “Fire” Districts hold a considerable amount of prime beach property.

Here are their holdings:

Screen shot from the Charlestown Tax Assessor's database

Screen shot from the Charlestown Tax Assessor's database

The Shady Harbor "Fire" District pays NO property tax on this
parking lot, beach and boat launch (Charlestown Tax Assessor photo)

Shady Harbor Fire District pays NO tax on its six properties because it was somehow able to secure non-profit status. 

Central Quonnie Fire District pays almost no tax because Charlestown gives it insanely low tax assessments on 10 pieces of prime property.

In fact, the total tax paid by the Quonochontaug Central Beach Fire District for last year was $4,722.98.

One of their prime holdings is a 27.97 acres plot on Ninigret Avenue zoned R3A. That land hold a tennis court with lights, a patio and a storage shed. There's mention of a ball field and playground on the District's website.

The current assessed value for this recreational complex (account #17-0061-00) is $98,000!

In 2014, when I first wrote about Charlestown’s fake Fire Districts, the Tax Assessor’s office had posted a nice snap of the tennis court (see above, top). But if you click on that account now, you only see the shed. Can’t imagine why they swapped pictures, though I have asked Tax Assessor Ken Swain to explain. 

CLICK here for the Charlestown Tax Payment database. CLICK here for Charlestown’s Tax Assessor database. Don't just take my word - do your own research, too.

Tale of two properties

Collette property: 2.5 acre wooded lot (photo by Will Collette)
Assessment: $156,700.

Here’s a more concrete way of looking at this problem.

Cathy and I own our home on a 2.5 acre lot on north side of Route 1 on the moraine. Our assessment for house and land went up by 12.5%. 

We also own an adjacent 2.5 acre vacant wooded lot zoned R3A. The assessment on that remained unchanged at $156,700.

The Quonochontaug Central Beach Fire District also owns a 2.5 acre vacant undeveloped lot (account #17-0061-00). It sits on Bay View Road just down the street from CCA leader and former Town Council President Tom Gentz. It is zoned R3A just like ours and is assessed for tax purposes at $24,100.

When I first wrote about this property in 2014, it was assessed at $23,200, while our lot was assessed at $142,000. Over the past six years, our vacant lot’s assessment went up by almost 10% while the Quoonie “Fire” District’s vacant lot assessment only rose by 3.7%.

Quonnie "fire" district 2.5 acre undeveloped lot. Assessed at $24,100
(Charlestown Tax Assessor)

Some might say I am comparing apples and oranges and, to an extent, I admit that comparing our 2.5 acre R3A vacant land on the moraine to 2.5 acre R3A vacant land in Quonnie does have a certain fruity essence given the dramatic difference in location.

I think most of us who chant the real estate mantra (“location, location, location”) would expect the Quonnie property to carry a much higher assessment. 

But in fact, our North of One lot is taxed 6.5 times higher than the “Fire” District’s land.

I had – and reported on – a long conversation I had with long-time Charlestown Tax Assessor Ken Swain in 2014 about the disparity in assessments and didn’t get an answer that made sense to me. Maybe I’m stupid – read my article HERE or the verbatim transcript of our dialogue HERE - and judge for yourself.

I’m not complaining about the $156,000 assessment on our 2.5 acre lot – I know buildable lots in Charlestown are valuable even in this new recession. But I do object to the bogus $24,100 assessment granted to the fake Fire District when a fair assessment, given its location, should be at least ten times higher.

I exposed this issue six years ago and the Charlestown Citizens Alliance-controlled town government did nothing to make these fake Fire Districts pay their fair share. Their 16 prime properties are worth millions of dollars more than their current assessed value.

Between them, the two fake fire districts pay less than $5,000 in Charlestown property tax. Because they do not pay their fair share, the burden is passed on to the rest of us.

The Charlestown and Dunn’s Corner Fire Districts also pay no Charlestown property tax, but they earn that tax-free status (and our gratitude) by working hard to protect us. Plus they have not abused their status by accumulating prime real estate unrelated to fire-fighting.

There are other ways that Charlestown residents can reduce their property taxes, some quite respectable and others not so much. We’ll take this on over the coming weeks.

Trump tariff profiteers

How Trump’s Trade War Is Making Lobbyists Rich And Slamming Small Businesses
By Lydia DePilli for ProPublica

Mike Elrod voted for Donald Trump in 2016, hoping for a break from tight government oversight that his business had endured for years, which he often found unreasonable.

“There was a time when every day I dreaded opening the mail,” said Elrod, who founded a small firm in South Carolina called Eccotemp that makes energy-efficient, tankless water heaters. 

“The Department of Energy would put in an arbitrary rule and then come back the next day and say, ‘You’re not in compliance.’ We had no input into what was changing and when the change was taking place.”

Elrod also thought that big businesses had long been able to buy their way out of problems, either by spending lots of money on compliance or on lobbyists to look for loopholes and apply political pressure. Trump, of course, had promised to address that — to “drain the swamp.”

Elrod is in his mid-60s, tall with a white beard and deliberative drawl. He trusted the president even as Trump started a trade war with China, where Elrod manufactures his heaters. 

The administration said U.S. companies that could prove they had no other source for their imports and whose business would be gravely injured could be spared the punishing tariffs that Trump was imposing. They would simply have to file for an exemption.

The IRS Tried to Crack Down on Rich People Using an “Abusive” Tax Deduction.

It Hasn’t Gone So Well.
By Peter Elkind for ProPublica

Wikipedia image

Read ProPublica's original article HERE.

In March 2019, the IRS added a scheme to its annual “Dirty Dozen” list of “the worst of the worst tax scams.” That same scheme was targeted, just weeks earlier, when the U.S. Department of Justice filed a fraud lawsuit against a handful of promoters allegedly responsible for generating more than $2 billion in improper tax write-offs. 

And the Senate Finance Committee has been investigating that very same racket, recently demanding thousands of pages of documents from six promoters. Lawmakers from both parties have introduced legislation to halt the same practice.

The scheme they’re all trying to kill is what’s called a “syndicated conservation easement,” which the IRS calls “abusive” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues.

A conservation easement, in its original, legitimate form, is granted when a landowner permanently protects pristine land from development. In that scenario, the public enjoys the benefit of undeveloped land and the taxpayer gets a charitable deduction. 

By contrast, the syndicated form, created and packaged by profit-seeking middlemen known as “promoters,” involves buying up land, finding an appraiser willing to declare that it has huge development value and thus is worth many times the purchase price, then selling stakes in the deal to wealthy investors who extract tax deductions that are often five or more times what they put in. (ProPublica investigated syndicated easements in the 2017 article “The Billion-Dollar Loophole.”)

EDITOR'S NOTE: Conservation easements are very popular in Charlestown. I wrote about this HERE and HERE primarily related to impact on Charlestown property taxes (not federal or state income tax). Unknown: whether any Charlestown properties were involved with  syndicates or promoters.   - Will Collette