East Greenwich Property Taxes:
Why did my tax bill go up? (or down?)
Social media and public pronouncements are filled with conflicting anecdotal evidence about property taxes:
- "My tax bill went up X% but my neighbor's only went up Y%"
- "Everyone I know got a big tax increase this year"
- "My tax bill went from X in 2008 to Y in 2018"
- "My tax bill actually went down"
- "The tax rate only increased by 2% but my tax bill went up 10%"
Actually, property tax bills are a matter of public record. The most recent property tax bills for every property in the town are posted on the East Greenwich Town Website under the Tax Rolls link. The Tax Rolls page contains separate links to the personal property tax roll and the real estate tax roll.
For prior years, paper copies (back to 1970) are maintained in the finance department at Town Hall, the East Greenwicy Free Libray has tax records back to 1880, and the East Greenwich Historical Preservation Society records go back even farther.
So when it comes to property taxes, there are no secrets.
You can also request an electronic copy for recent years through an Access to Public Records Act (APRA) request.
The real estate tax roll lists the following data elements for every property in the town:
- The address and parcel number of the property
- The name and address of the owner
- The assessed value of the property on December 31 of the year prior to the tax year. For example, the tax roll currently posted on the town website is for Fiscal Year 2019, tax year (the year the bills are sent out) 2018, and valuation date 12/31/2017.
- The amount of the tax bill
- Any exemptions the owner is entitled to. These include senior citizen, veteran, and various disability allowances.
The major factors that determine an individual tax bill are:
- The tax rate
- The assessed value of the property
- The revaluation cycle
- Exemptions, if any
The tax rate is set by the town before the start of the fiscal year as part of the budget process.
- The tax rate is expressed as a dollar amount per $1,000 of assessed value of the property.
- The tax rate for the current fiscal year (FY2018) is $23.00.
- To compute your tax bill, multiply the value under the 'Assessments' heading on the tax roll by 23.00, divide by 1,000, and subtract exemptions if there are any.
- You can think of the tax rate as 10 times the percentage of the assessed value property owners must pay. A $23.00 rate means property owners pay 2.3% of the assessed value of the property. So the more valuable the property, the higher the tax, but everyone pays the same percentage of their assessed value.
- In recent years, the real estate market has experienced considerable turmoil so there has been quite a bit of volatility in tax rates, but this is purely due to housing prices and should not be attributed to increases in the town's operating costs.
The assessed value is the value of the property. It is the number you multiply the tax rate by and divide by 1,000 to get the tax bill (before exemptions are deducted).
- The assessed value of a property is defined as the most probable price the house would sell for in an arms-length sale (meaning the seller did not give the buyer any special consideration) in the current market.
- Within a revaluation cycle, assessed values stay the same unless there is a sale or building permit activiity.
The revaluation cycle is a process of continuous revaluation designed to ensure that valuations are aligned reasonably well with the current real estate market.
- Assessed values are recalibrated every three years (the "revaluation cycle") to bring them into line with the current real estate market.
- Every third cycle (every nine years) properties are assessed by a profesional real estate assessor.
- Otherwise, a statistical revaluation is done. This means a complex formula is used to estimate the new assessed value, based on the sale price of comparable properties in the area. The algorithm used is proprietary, but Dr. Daniel Ducharme, the IT Director and Revaluation Analyst at Northeast Revaluation Group, told me he is authorized to release this formula which is similar.
- While attempts are made to control the variability, there will always be a certain amount of "random noise" in this process. This causes a great deal of consternation as people try to come up with some logical reason why their valuation changed in a certain way, and their neighbor's did not, but usually it's just an artifact of the algorithm. It also explains the "Everyone in my neighborhood got a big tax increase" complaint, because in a platt of houses of similar construction and age, the valuations will tend to move together.
When you combine the effects of the real estate market, the revaluation cycle, and the town's operating costs, you get a rather complicated picture, as the graphic below depicting six most recent revaluation cycles shows:
The clear groupings of three are in the same revaluation cycle. There is an anomaly in the first year of the 2013-2014-2015 cycle due to incorporation of the fire district, but if you add the fire district rate in for 2013 it lines up the same way the other cycles do.
You can see that the 2006 tax rate is less than half the 2000 rate. This was caused by the runup in real estate valuations during the housing bubble. Because revaluations only occur every three years, there is a bit of a time lag before the tax rate reflects rising or falling real estate prices.
It goes without saying that by cherry-picking different time intervals, it would be easy to spin this data any way you wanted, from "tax rates are going through the roof" (2006-2016) to "tax rates are falling through the floor" (2000-2006). I have posted an objective, but more technical analysis on a separate page.
The long term history of East Greenwich tax rates exhibits a strong cyclical pattern as well, but the overall trend is a gradual downward slope. In fact, current rates are quite low by historical standards, and approximately equal the the rates of the early 1940s.
In the interest of making it easier to fact check anectodal claims about tax bills (many of which are exaggerated), I have posted a tax bill history back to 2000. It includes tax bills and valuations, but does not list exemptions.
The tax bill is obtained by multipying the tax rate times the valuation divided by 1,000 and subtracting any exemptions.
The exemptions are not in the file, but you should be able to figure them out using the tax bill, the valuation, and the tax rate.
Likewise, you should be able to figure out the tax rate from any property that does not have an exemption. In this case, multiply the tax bill by 1,000 and divide by the valuation.
In recent years, exemptions appear in the tax roll in tax dollars, but if you go further back they are in assessed value dollars. It's usually clear from the magnitude which one you are dealing with.
The East Greenwich Tax Assessor is the definitive source for tax bill information. The information in the file was extracted from tax roll documents and should be reasonably accurate, but I will defer to the tax assessor in case of any inconsistencies.