Concerns over car tax repeal heard in committee hearing, Mayors call it progressive
By Kirsten Glavin
@kirstenglavin
PROVIDENCE, RI – For the first time, the House Committee on Finance met Tuesday night to hear testimony and discuss House Speaker Mattiello’s car tax repeal legislation.
Many people in favor of the plan referred to the phase-out as a progressive tax policy. Providence Mayor Jorge Elorza testified in support and said more than 34,000 vehicles in the city would be exempt in the first year alone. He added that he already asked his finance department to delay sending out car tax bills.
"I’ve asked my finance department to delay sending car tax bills for a few weeks if necessary, so we can limit the need for credits or refunds and make this work best for our city and our residents,” said Elorza.
Mayor Diossa of Central Falls also testified in support. He said car tax elimination would put money back into the pockets of low income and middle class residents.
"The citizens of central falls have suffered from this regressive tax,” said Diossa. “We are a middle class and low income city and many of our residents own older cars."
Some of those against the legislation argued just the opposite, reminding committee members that those the lowest income brackets cannot afford cars, and therefore, would not get any tax relief.
"What we’re really doing is ignoring the people at the bottom who don’t have access to cars,” said Providence resident James Kennedy, who later went on to say that he believes money will be taken from programs that lower-income residents rely on, in order to make up for the tax break.
Several people, referenced 1998 when the state nearly phased out the car tax, but in the end, backed out.
"Some of the same issues of environment, economy and social justice still remain,” said one man in his testimony.
The proposed car tax 6-year-phase-out allows for cities, towns and fire districts to be reimbursed for the money lost. If approved, the plan would take effect in July and would cost roughly $26 million in it’s first year.
Over 150,000 older cars would be taken off the tax roll. The first year, the minimum exemption applied to all cars would be raised to $1,000 from $500.
By 2024, Speaker Mattiello’s plan would cost the state $221 million.
