PROVIDENCE, R.I. – There is more validation for Rhode Islanders who complain about the car tax: it turns out the state has the highest car tax in the country.
A new WalletHub report shows Rhode Island's effective tax rate is 4.8 percent. That adds up to $1,100 a year for the average $23,000 car.
In her recent budget proposal, Governor Gina Raimondo pitched cutting the car tax by 30-percent by assessing cars at trade-in value. "The car tax is a problem and we need to cut it," she said. "Let's cut it and give families a break and let them put some more money in their pocket, instead of putting so much in car taxes."
But for House Speaker Nick Mattiello, the governor's plan isn't enough. "This is an oppressive, regressive tax," he told ABC6 News.
Mattiello wants to phase out the car tax entirely over five years, ear-marking $40 million a year for cities and towns to make up the difference. "Trimming around the edges is not going to make us competitive nationally,” he said. “It's not going to help us as much in our national standings and that matters."
Meanwhile, House Minority Leader Rep. Patricia Morgan agrees the car tax should be eliminated, but adds: “I just think we need to find other avenues to eliminate it completely."
She wants the state to tighten its belt more through avenues like pension reform. She says that would help municipalities get better control of the finances, which in turn would help them lower the car tax. "We have plenty of waste and abuse at the state level that we can squeeze out,” Morgan said.
Massachusetts ranks 45th in the WalletHub report, with a tax rate roughly half of Rhode Island’s, while 23 states and Washington, D.C. have no car tax.