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Permit resolution falters on council tie

April 17, 2012

WOONSOCKET – A resolution opposing a controversial House bill that has been framed as an incentive to the construction trades died on a 3-3 tie vote after some feisty back-and-forth among members of the City Council Monday night.
With the bill held for further study in committee since April 5, all the hoo-ha may have been more instructive about the new political dynamics on the council than anything else.
The even split was possible only because freshman Councilman Robert Moreau was on vacation and couldn’t attend the meeting. But even in his absence, the top vote-getter in last November’s elections demonstrated his power as the seven-member council’s swing vote.
Also, the House bill is sponsored, in part, by State Reps. Lisa Baldelli Hunt (D-Dist. 50, Woonsocket) and State Rep. Jon D. Brien (D-Dist. 49, Woonsocket). The bill is just one of several issues over which Baldelli-Hunt has squared off against Mayor Leo T. Fontaine, who hotly opposes the legislation. And Rep. Brien is the son of Councilman Albert G. Brien, a leading advocate of the bill and a strident detractor of the mayor.
Even if it had passed, the resolution would have had no binding force; it would have merely put the council on record that the city opposes it in hopes of influencing lawmakers.
At issue is House Bill 7867, deemed “An Act Relating to Health and Safety – Taxation – Impact Fees.” Among other things, the bill would reduce by half the cost of building permits for new homes, renovations and other projects for two years. Similarly, the sales tax on lumber and construction materials would have been halved, to 3.5 percent.
“I am convinced this bill would enhance our revenues by providing an incentive to people who would not otherwise make home improvements,” said Councilman Brien. “It’s good consumer legislation and it ought to be passed.”
Brien sided with councilmen Marc Dubois and Roger G. Jalette in rejecting the resolution. Council President John Ward and councilors Chris Beauchamp and Daniel Gendron voted for it, embracing the view of the Fontaine administration.
The mayor’s chief argument against the bill is that the incentives for contractors on the cost of building permits would come at the expense of taxpayers. Based on tracking from the building inspector’s division, Fontaine said the bill, if passed, would cost the city $160,000 to $180,000 over two years in lost permit fees – substantially more if Steward Health Care buys Landmark Medical Center. The for-profit hospital outfit envisions investing tens of millions in capital improvements at the hospital, all of which would be subject to building fees.
“We could be losing enormous amounts of money in permitting fees,” the mayor told councilors.
The fees are designed to pay for service of providing building inspections, and cutting them will only hurt taxpayers, he said.
“We need to still have the personnel to provide those services,” Fontaine said. “If we don’t have the revenue to offset those costs, it falls back on the taxpayers.”
Council President Ward allowed that at least one feature of the bill seemed appealing – a reduction in sales tax for lumber and construction materials. This could be a boon for vendors in Woonsocket and other border communties where sales taxes would remain comparatively high for those items just over the state line.
All things taken into account, however, Ward said, the positives were outweighed by the negatives. In its current financial condition, the city is simply not in any position to absorb a possible two-year loss of $180,000 in revenues.
“That I can’t live with,” he said. “The taxpayers would have to pick up the tab.”
The Fontaine administration is not alone among the ranks of municipal governments who have taken a firm stance against the measure. Weeks ago, the Rhode Island League of Cities and Towns took a position against the bill after conferring with mayors and town managers across the state. For many other communities, the potential losses are far greater than those Woonsocket faces, Fontaine said.
“The amounts were astronomical,” he said. “Woonsocket was small compared to some of the other cities and towns.”
Only one individual from a thin crowd in the spectator section of Harris Hall addressed the issue during the open comment portion of the meeting. Not surprisingly, Jeanne Budnick, a co-owner of Pepin Lumber, urged the council to drop its opposition to the bill. Anyone in the market for home renovations in nearby Massachusetts or Connecticut can take a short drive over the state line and save money by purchasing materials from homegrown vendors, and “that means more business for Rhode Island,” said Budnick, president of the Blackstone Valley Independent Business Alliance.
“Think long and hard before you approve this,” she said. “I’m not the guru, but I do have some guidance from the chamber of commerce.”

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