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Could a tax revolt be coming to Woonsocket?

July 16, 2013

WOONSOCKET — A fundraising campaign has been launched for the purpose of underwriting a possible legal challenge to the $2.5 million supplemental tax bill the city is planning to issue next week.
The main organizers are Roland Michaud, a member of the Zoning Board of Review, and Dick Bouchard, part-owner of radio station WNRI.
Roger Bouchard, the general manager of WNRI and Dick’s brother, says he is uninvolved in the effort, but he’s keeping track of the receipts while his brother is on vacation. Roger Bouchard said Tuesday he’s taken in $1,845 in checks since Friday, most of it from individuals who donated $100 each.
A third individual, James Cournoyer, says the fundraiser wasn’t his idea, but he says it’s a good one and he’s considering stepping up as a plaintiff.
“I support it and I’ll probably contribute to it and I’m going to consider my legal options to deal with this,” said Cournoyer, an assistant treasurer for Textron. “It annoys me no end I even have to consider my legal options. I would prefer my elected officials simply follow the law.”
The basis for the legal challenge concerns the language of the enabling legislation that allowed the state-appointed Budget Commission to impose the supplemental tax. The legislation explicitly requires the commission to demonstrate that it has realized at least $3.75 million in savings from cuts in health benefits to city employees and retirees as a condition of issuing the tax bill.
The commission claims it’s achieved at least $4.7 million in projected savings in fiscal 2014, more than meeting the benchmark during the first year of its five-year solvency plan.
But Cournoyer and others claim the commission is counting its chickens before they’ve hatched, which, in this case, is not just unwise but illegal.
For example, State Sen. Marc Cote (D-Dist. 24), points out that $2.7 million of the savings is in question because retirees have challenged the cuts in Superior Court, asserting they were unlawfully imposed upon them without collective bargaining.
Cote was one of the state lawmakers who voted in favor of the legislation to allow the supplemental tax, provided the conditions were satisfied, but he told commissioners during a public meeting this week he believes they’ve violated the letter and spirit of the law.
“The supplemental tax’s enabling legislation is crystal clear,” Cournoyer told The Call. “The legislation did not make the tax contingent on “potential” savings or “anticipated” savings or “hoped for” savings or savings “to be realized in the future.”
The law says the tax is “contingent upon the city of Woonsocket’s realization of a total amount of no less than $3,750,000 in savings resulting from municipal enactment or concessions from collective bargaining with applicable Woonsocket unions and retirees.”
Michaud said he is openly encouraging taxpayers to refrain from paying their bills as long as possible to give the organizers of the fundraiser time to decide whether to proceed with a lawsuit.
He said there’s been no firm decision yet on whether such a suit will be filed, but there has already been a meeting with a lawyer interested in the case. Michaud declined to identify the lawyer, saying the individual is not yet on retainer.
Michaud said he believes what is being called the Woonsocket Legal Defense Fund has already amassed enough resources to initiate litigation.
“We are and continue soliciting checks, whatever people can afford,” said Michaud. “This is not about one person with $10,000 dollars, but maybe it’s a thousand people with $10 each.”
He said checks could be dropped off at WNRI’s broadcast studio, located at 786 Diamond Hill Road. If the organizers of the tax protest decide against filing a lawsuit, he said all the checks will be returned to donors.
Members of the budget commission have already addressed allegations that the supplemental tax has been imposed unlawfully. The commission’s lawyer, Edmund Alves, has opined that the tax is not in violation of the enabling legislation, they say. So has Dan Kinder, a lawyer handling labor negotiations for the city.
“Everyone is welcomed to mount whatever legal challenge they choose, but I would prefer if they actually had an alternative to the supplemental tax,” said Council President John Ward, a member of the commission. “By that I know they will claim the alternative is bankruptcy, but bankruptcy will essentially have all the same elements that the five-year plan currently has. The likelihood of that outcome being different from what the budget commission has already proposed is virtually nil.”
Ward said a legal challenge to the supplemental tax is yet another curveball that could upend the five-year plan and thrust the city into receivership and, possibly, municipal bankruptcy.
The Superior Court challenge to retiree cuts in health care, if successful, is another. The International Brotherhood of Police Officers union has also filed a personnel grievance challenging the commission’s efforts to impose changes in health care benefits on members without collective bargaining, a move that could be the precursor of another legal challenge.
“Each one of these things has a big enough dollar value to it that it could compromise the five-year plan,” said Ward.
Should a legal challenge to the supplemental tax bill go forward, it could inject havoc into a confusing tax situation which has already been set in motion. The supplemental bills aren’t due to be mailed until next week, according to the tax assessor’s web site. But the $2.5 million it would raise has already been added to the tax base used to calculate bills for fiscal 2014.
Those bills were mailed out Monday and are due Aug. 9. The supplemental tax bill will be mailed “by the end of July” and will be due no later than Aug. 29, according to the assessor’s site.

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