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PO Box 364
Slatersville, RI 02876
(401) 769-4598
e-mail: cashumway@aol.com
March 21, 2005
Honorable RI State Representatives
State House
Providence, RI 02903
Dear Representative,
I would like to bring your attention to a section of
Public Law 110 (Sales and Use Taxes – Liability
and Computation section 44-18-30.C) which allows for
Municipal Economic Development Zones in “deteriorated,
blighted areas” in West Warwick, Central Falls
and Woonsocket. I believe the legislature created and
passed this law with the most honorable of intentions.
However, now that the city of Woonsocket is about to
take advantage of the tax exemption, many unforeseen
and negative consequences appear to be imminent.
A developer is proposing a 120 acre retail mall in
North Smithfield with an adjoining 19 acres in Woonsocket.
Woonsocket officials have designated their portion of
the project as a Municipal Economic Development (MED)
Zone. There are four retail stores planned for the MED
zone, two of which are big-box retail giants. Unconfirmed
reports say that a Home Depot and Best Buy or similar
stores will be located there, along with two other retailer
stores. For the record, these 19 acres are not located
in a “deteriorated, blighted area” of Woonsocket.
They are pristine, undeveloped woodlands, one of the
very few still undeveloped areas of the city.
As I am sure you are aware, MED zone retail stores
are allowed to charge only 3.5% sales tax for the first
ten years of their existence. What’s more, Woonsocket
gets to keep the 3.5% sales tax collected, while the
state receives nothing. Woonsocket officials have crowed
that the city stands to gain at least $30 million in
tax revenue over the ten years. That means that the
state of Rhode Island will lose $60 million in revenue
over the next ten years.
One has to question how the state will make up for
this lost revenue. Will they decrease Woonsocket’s
state aid to education? Will they raise the income tax
on all citizens? That would mean that RI citizens would
be subsidizing two retail giants that earn billions
in sales each year. RI citizens would also be subsidizing
the city of Woonsocket, with no benefits to their own
communities. Public schools in rural and suburban communities
in RI are almost completely financed with residential
property taxes, which are increased on yearly basis.
The poorer cities already receive the bulk of state
aid to education. Will these communities be forced to
raise property taxes even more to make up for the $60
million in lost state revenue due to the MED zone?
Another unforeseen consequence of the MED zone is the
way it will hurt retail sales in other cities and towns.
Consumers will drive to the MED zone to save on major
home improvement projects and major electronic purchases.
While there they will patronize the businesses in that
mall, rather than supporting stores closer to home.
Retail stores in Lincoln, Smithfield, Cumberland, Pawtucket,
Central Falls, Warwick, West Warwick, Providence, North
Providence, Johnston, Cranston, Burriville and Gloucester
will likely see sales decreases due to the impact of
the MED zone in Woonsocket. How many of these stores
will survive ten years of unfair retail advantage the
MED zone will enjoy? How many of these stores will need
to layoff employees as a result of lost sales? These
surrounding communities will certainly lose a portion
of their commercial tax base, putting even a greater
strain on residential property taxes.
The residents of North Smithfield do not want this
sprawling set of big box stores in their community.
They rightfully fear traffic congestion, increased crime
rates, air and water pollution and the degradation of
their small town character and way of life. There is
plenty of evidence from other towns nationwide that
these consequences will happen. A small group of elected
officials want the project for the millions in tax revenue
they think it will bring. We believe they are shortsighted
and that the mall will cost the town far more in services
than it will provide in revenue.
I hope that the state senators and representatives
from surrounding communities will add their voices to
this debate. Bringing all the issues to the forefront
will help elected officials make the right decision.
In a democracy, all voice should be heard. I thank you
for your attention to this matter.
Very sincerely yours,
Dr. Caroly Shumway
Chairperson
Valley Alliance For Smart Growth Member
Walter Chomka, Jr.
Manager, Vose TrueValue Hardware
Member, Valley Alliance For Smart Growth
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