Mageau Attacks Tax Cut Plan for Average Charlestown Residents

"If it's not my idea - or worse, the idea of my enemy - I'm against it"

By Will Collette

To show how deeply motivated Jim Mageau is by his hatred for his enemies, former Council President Jim Mageau has sent the members of the Town Council an error-filled letter condemning the Charlestown Democratic Town Committee's proposal that Charlestown provide homeowners who make Charlestown their homes a $1000 Homestead Tax Credit.

In years past, Mageau has been a big supporter of cutting taxes for various groups of taxpayers. He has never come forward with a plan as practical and far-reaching as the CDTC's proposal, however. But despite all of his past positions on taxes, Mageau has come out full-bore to block this proposal, even to the point of adopting the rhetoric of some of his other arch-enemies (e.g. the RI Statewide Coalition).

We're not going to try to match Mageau insult-for-insult. For one thing, he's better at slinging insults than we are and besides, we think Charlestown residents would rather have facts than rhetoric.

So here is the response CDTC Chair Cathy Collette sent to the Town Council as rebuttal to Mageau's e-mail. (Disclosure - I'm married to Cathy).

December 9, 2011

To the members of the Charlestown Town Council

From Catherine O. Collette, chair

Charlestown Democratic Town Committee

Re: Rebuttal to Jim Mageau e-mail on CDTC’s Homestead Tax Credit proposal

I recently saw Jim Mageau’s e-mail to you regarding the tax cut measure the Democratic Town Committee proposed to you at the November Town Council meeting. It contains so many errors of fact and distortions that we cannot allow it to go unchallenged.

I have reproduced the text of Mageau’s e-mail and marked it in red italics. Our rebuttal follows each section and is set out in bold blue.

From: Jimmag...@aol.com [mailto:Jimmag...@aol.com]
Sent: Wednesday, December 07, 2011 4:32 PM
To: greg.avedis...@charlestownri.org; lisa.dibe...@charlestownri.org;
marge.fr...@charlestownri.org
Cc: tom.ge...@charlestownri.org; dan.slatt...@charlestownri.org;
rep-wa...@rilin.state.ri.us; tfer...@gmail.com
Subject: Homestead Exemption

MAGEAU: Please be advised that I have received several negative telephone calls from taxpayers who thought that I am still associated with the Charlestown Democratic Town Committee. They were adamantly opposed to the CDTC proposal and so am I. It is instructive to recall that the town's part time residents  and taxpayers have already objected to not being afforded the right to vote at Financial Town Meeting/Referendum and adopting this type of proposal is only going to open Pandora's Box.


CDTC: Rhode Island law prohibits voting by non-residents. This is a non-issue at the town level. As many of the Council members know, the one-time candidate for Representative for District 36, Matt McHugh, was a long-time champion of state legislation to provide voting rights for non-residents, but that position, and his candidacy, were resoundingly beaten in Charlestown.
I don’t know why Mr. Mageau raises this point, since it has nothing whatsoever to do with the merits of our Homestead Tax Credit proposal.


MAGEAU: It is to simplistic to say that there are other cities and towns in the state who have adopted similar ordinances.


CDTC: But it is true.


MAGEAU: Providence, Johnston and the others do not experience a population increase each summer from 7800 residents to more than 20,000 like we do.


CDTC: This statement actually supports our position. Permanent Charlestown residents bear the cost of a 12-month infrastructure that serves that swelled summertime population with their state income taxes as well as their town property tax. It is one of the main reasons why Charlestown Democrats have proposed the Homestead Tax Credit.


MAGEAU: Furthermore, while these other communities have enacted similar ordinances do we know if any of them have ever been challenged in State or Federal Court because the proposal appears to be very discriminatory.


CDTC: The state Homestead Tax exemption statute and the municipal enabling legislation have been in place for many years. We know of no court challenge, and certainly none that has succeeded.


Every state in the Union, except Delaware, authorizes Homestead Tax exemptions. Outside Charlestown, the Homestead Tax break is well-known, understood and used. It is a state-wide feature of property taxation in Florida, where many of our non-residents declare their residency.


The Charlestown Democrats’ proposed Homestead Tax Credit is structured exactly like the existing tax credits the town currently offers. It is no more discriminatory to property owners not receiving the benefit of the tax credit than any of these other tax credits.


Charlestown has historically chosen to give its property tax breaks in the form of credits, rather than as percentage reductions in assessments. For that reason, we used Charlestown’s traditional approach in designing this proposal.


MAGEAU:  I am not opposed to a Homestead Tax Exemption for elderly long time residents of the town who are having trouble paying their taxes but the CDTC proposal goes way beyond that and appears to involve the redistribution of wealth.


MAGEAU: Charlestown already has what is essentially a Homestead Tax Credit for the elderly (as well as for veterans, the blind and disabled), as one of the essential eligibility criteria for these existing town tax credits is full-time residency.


As for Mr. Mageau’s remark about “redistribution of wealth,” it is no more so than the other tax credit programs already on the books. We know of no instance where any court challenge has been brought against our town’s existing tax credits as discriminatory against those persons who are not eligible to receive them.


MAGEAU: May I recommend that you contact Attorney Sandra Mack, Esq. and ask her if she has any approved plans. She is the lawyer who designed the special tax qualified Other Post Employment Benefits plan that my successors on the town council adopted. During our meetings a plan to provide tax relief for the elderly was discussed and she submitted a proposal to design one for the town but it was rejected on a tie vote of the then town council. Thank you. Jim Mageau


CDTC: The Charlestown Democratic Town Committee would expect nothing less than a careful review of our proposal not only by our Town Solicitor and Town Treasurer, but also the town Budget Commission.


Our proposal calls for three steps:


(1) Town Council enactment of a resolution to seek state enabling legislation;


(2) The enactment of state enabling legislation and


(3) The hard job of determining exactly how the program will work, including whether to initiate the program at the full authorized level or to phase it in. That third and final step gives the Council the authority and responsibility to put in place a program that provides the greatest good to the greatest number.