STATE HOUSE — On Wednesday, June 15, 2015 the House Republican Caucus will introduce an amendment to the budget that will begin to restore the car tax phase-out. Representative Patricia Morgan (R-District 26, West Warwick, Coventry and Warwick) will be sponsoring the amendment.
After the recession of 2008, the General Assembly cut the funding that allowed cities and towns to exempt payment on a portion of a car’s value. Concurrently, they passed a law that permits our municipalities to change their deduction values. As a result, municipalities have cut the exemption dramatically increasing the cost burden to already beleaguered residents.
“Our property tax rates are among the highest in the nation. Added to our overall tax burden, which places us 6th highest in the nation, the car tax is another bill that hardworking Rhode Islanders struggle to pay. Compared to last year’s enacted budget, this fiscal year budget has grown by over $270 million. Make no mistake, the more money we extract from Rhode Island wallets through taxes, fees and tolls, the worse our state will be,” said Rep. Morgan.
“The Republican Caucus proposes to prioritize tax relief. To maximize the benefit to all our citizens, we are proposing the eventual elimination of the car tax. This year’s installment offers a significant down payment. We propose to raise the exemption from $500 to $1500, a threefold increase.”
Rep. Morgan stated, “two years ago, the General Assembly passed DMV fee increases that tripled car registrations, driver’s license renewal fees, and inspections. This has hit some families very hard. Cars are a necessity in most families’ lives. It simply is not a luxury, but the only means of transportation to and from work and for shopping. Despite this, our state’s leaders have made it increasingly expensive for average families.”
“We will be taking the needed tax revenue from spending in the budget that we feel does not give taxpayers the highest value for their hard-earned dollars:
$15 million from Rebuild RI Tax Credits- This Commerce RI program gives subsidies to real estate property developers. Because of the poor business climate, the state pays developers to conduct business. Better use of the money would be to change the poor business climate, not provide money to only a few corporations. .
$7 million from the Closing Fund Tax Credits – This Commerce RI program provides funding when a company cannot get it from traditional sources. The taxpayer should not be paying for the state to play banker or operate in the private equity business.
$1.388 million from newly created Office of Diversity, Equity, Opportunity – Our traditional human resource offices have always done an admirable job at recruiting and retaining talent from our diverse workforce and ensured equal protection to all.
$700,000 by eliminating 4 new senior staff positions at the Division of Capital Asset Management and Maintenance. This division was consolidated in 2015, yet the division is expanding the following year. Rhode Island lawmakers need to hold their budgets and control spending.
$500,000 from Industry Cluster Grants – Another program destined to pay companies to locate and operate in Rhode Island because the state ranks so poorly in business climate.
$3 million from the Film Tax Credit program – Since the beginning of this program, the state has issued approximately $7 million tax credit annually. We feel the residents will receive more value in their daily lives from a phase out of the car tax.
$2.3 million from the elimination of legislative grants – If we lower taxes, Rhode Islanders will be more able to contribute to charities of their choice.
$1.5 million from Air Service Commerce RI – Airlines will add service to cities based upon demand. Taxpayers should not be subsidizing poorly subscribed air routes.
$3.5 million from the Wavemaker Program – Graduates will stay in Rhode Island when there are jobs with futures for them to fill.
$2 million from the Clean Diesel Fund- Owners, not taxpayers, should be responsible for maintenance that ensures maximum operating efficiency.”
Rep. Morgan concluded, “the cost of this phase out is $37 million. Next year, an additional $8-9 million will be needed to expand the exemption. Although it is a multi-year initiative, we intend to pursue the complete elimination of the car tax and make it fair for all Rhode Islanders. Strong fiscal values and conservative spending will ensure that Rhode Islanders keep more of their hard earned money.”
