Legislation for ‘fair’ auto values is likely stalled for another year

John Howell
Posted 5/19/15

Rob Cote was back at the State House for the fourth year Thursday in his crusade to have motor vehicles fairly valued. And even before Cote could make the argument that inflated car values used for …

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Legislation for ‘fair’ auto values is likely stalled for another year

Posted

Rob Cote was back at the State House for the fourth year Thursday in his crusade to have motor vehicles fairly valued. And even before Cote could make the argument that inflated car values used for the purpose of taxation cause people to lose faith in government and hurt those with low income and the elderly, he had a clue his efforts and those of some legislators were stuck in park and wouldn’t go anywhere.

Cote couldn’t sit still in the House Finance Committee when vice chair Rep. John Carnevale called for a vote to hold all five bills dealing with motor vehicle valuation for further study. Cote jumped up to talk with Rep. K. Joseph Shekarchi, the author of one of those bills, shaking his head and muttering nothing would get done.

While the committee agreed to hold the bills, the hearing progressed.

Rep. Joseph McNamara, author of a bill that would change the method of valuation from “clean” to the average trade-in value, told of a 1997 Plymouth he had owned that was valued at $3,000 for taxes purposes but he doubted he could have sold for $300. He ended up giving the car away.

“People may not know what their home is worth,” he said, “but they know what their car is worth.”

Using the “clean” value, McNamara said, affects the poor, working people and seniors. He said motor vehicle taxes act as a deterrent to new car sales, and people on fixed incomes are choosing not to buy a new car or not to own a car because of taxes. He suggested phasing in the trade-in values. He urged the committee to doing something.

“I’m trying to get some movement of this,” he said.

Shekarchi, author of a similar bill, tried to push things along. He said he talked with Dan Beardsley, executive director of the RI League of Cities and Towns. Shekarchi said he was looking for a “compromise” that would not hurt municipalities, but that Beardsley didn’t follow up on a suggested meeting.

“Let’s begin the process to do this right,” he urged. He suggested with improved state revenue projections, the state might be able to offset lost tax revenues to municipalities while lowering valuations and leaving the tax rate unchanged.

Committee Chair Rep. Raymond Gallison Jr. set Shekarchi straight.

“There’s no surplus of money out there,” he said, referencing the improved revenue picture. Shekarchi thought even temporary relief to cities and towns would be something.

Peder Schafer, deputy director of the League of Cities and Towns, said motor vehicle valuations are not the issue. He said the issue is the $124 million municipalities have lost in state aid. As part of that aid package, the state was reimbursing municipalities for up to $6,000 in motor vehicle exemptions as part of a program to phase-out the tax. The state eliminated reimbursing all but $500 of the exemption and empowered municipalities to do away with the exemption if they chose.

A few communities have left the exemption intact, but others have reduced or eliminated it.

Schaefer said use of the trade in value, instead of the clean value, would collectively result in a $50 million loss in tax revenues to cities and towns. The effect would be to pressure property taxes to off set the loss.

Gallison differed with Cote’s characterization that holding legislation for further study hasn’t accomplished anything.

Cote argued failing to fairly value motor vehicles shouldn’t be justified on how it impacts tax revenues. He said the root problem is the failure of municipalities to run efficiently and to address unfunded liabilities.

On his way out of the State House, a discouraged Cote said he thought this could be the last year he’s fought to change the method of motor vehicle valuations.

Comments

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  • connor

    Im so confused.... I thought this guy moved or was moving. OMG!!! What is he up to nowwwwww????

    Tuesday, May 19, 2015 Report this

  • richardcorrente

    Cote is right! Undiplomatic, not discreet, but right! Our car taxes are unfair by anyones opinion. Why can't we just make them "fair". If they were "fair", people wouldn't oppose them so much. Using the "average trade-in value" instead of the higher, "clean" value shouldn't offend anyone. It would be the first step to being "fair". Cote seemed surprised that we couldn't even get this first, logical step accomplished. I am too. By all standards, the car tax is the worst tax in Rhode Island. It changes from one city/town to another by as much as 300%. Is our legislature going to improve the car tax? I hope so. And to be honest, they should have corrected this unfair tax already.

    Thankfully, we have a catalyst like Rob Cote to push the issue!

    Thank you Rob, for donating a hundred plus hours of your life for the betterment of all R.I. car taxpayers.

    We need more people like you.

    Tuesday, May 19, 2015 Report this

  • wwkvoter

    Richard is correct, that Cote is absolutely correct. This issue is a disgraceful example of everything that is wrong with "leaders" in Rhode Island and why we rank last on so many lists.

    Tuesday, May 19, 2015 Report this

  • patientman

    Fair tax? We aren't taxed on what is fair. We are taxed on what the fools in the GA and city leadership have saddled us with. Poor leadership and political cowardice has brought us here. Everyone knows the tax is unfair to all Rhode Islanders. Everybody knows that the law is bad for car dealers. Everyone knows the law hurts Rhode Islands growth. Politicians have promised for decades that their grandchildren will pay for services that they couldn't. Fair? You want fair, vote for fiscal conservatives. Better yet move. Rhode Island remains in a death spiral and it will get a lot worse before it gets better.

    Wednesday, May 20, 2015 Report this