September 3, 2014
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Shekarchi seeks car tax resolution

Citizens frustrated about car taxes will get the chance to voice concerns this evening at the State House, as the House Finance Committee hears testimony on Rep. K. Joseph Shekarchi’s (D-Dist. 23, Warwick) recently drafted reform bill.

The issue with car taxes first flared tempers about two years ago when the $6,000 statewide automobile excise tax exemption was eliminated, which allowed municipalities in Rhode Island to reduce the exemption to as low as $500. It spawned car tax revolts in Warwick and Providence, with Rob Cote leading the charge in Warwick, and Anthony Sionni organizing one in Providence.

Shekarchi originally drafted legislation that would standardize automobile taxes statewide by imposing an excise tax in a flat amount of $600 for vehicles less than three years old, and $360 for vehicles more than three years old.

But last week he said he is making modifications to the bill. While he was mum on details, Shekarchi said Cote contacted him to offer input about the legislation, and Shekarchi is taking Cote’s advice on particular points.

“I took some of his concerns into consideration,” Shekarchi said. “I think he’ll be happy when he sees the bill.”

However, said Shekarchi, he’s not making changes simply to please Cote. He’s adjusting the bill in order to provide relief for all taxpayers, as he said it was one of the top issues constituents had when he was canvassing during campaign season.

“It’s still a big issue,” Shekarchi said, also noting the importance of working with his colleagues, as there are several local bills relative to car taxes. “I want to take the best of all these bills and try to come up with something that’s workable and doable. We’ve got to put them together and come to a consensus. The goal is to be fair to everybody.”

Rep. Joseph McNamara (D-Dist. 19, Warwick, Cranston) is sponsoring another bill that would amend car tax statutes to require that the assessment of vehicles be based on the average trade-in price, as opposed to the full clean retail price, after a three-year phase-in period. The legislation proposes that municipal assessors assess vehicles at 95 percent of the clean retail value beginning in 2014.

By 2015, assessors would use 90 percent of the clean retail value, and by 2016 and thereafter, assessors would make assessments at 100 percent of the average trade-in value. The bill would also extend the appeal period from 30 to 45 days.

Rep. Gregory Costantino (D-Dist. 44, Lincoln) and Rep. William O’Brien (D-Dist. 54, North Providence) are also co-sponsoring legislation. Their bill, which would restore the full exemption beginning in the 2014 fiscal year, is currently before the House Finance Committee with action yet to be taken.

In order to make up for the lost revenue from restoring the exemption, the bill proposes an additional 1 percent sales tax to be imposed on all sailing vessels sold in excess of $100,000, as well as an annual property tax of 1 percent imposed on all sailing vessels registered in the state and valued in excess of $100,000.

Cote said he finds each of the bills problematic and plans to attend tonight’s hearing. He was hesitant to speak of the advice he gave to Shekarchi, saying he has yet to see Shekarchi’s modifications before press time. However, for the last two years, one of the main points Cote has suggested is to value vehicles at the average trade value, as opposed to a “fictitious” value.

On Friday, GoLocalProv.com posted an article on the topic that includes a table that ranks the 39 cities and towns in Rhode Island from highest to lowest for the 2013 fiscal year. Warwick ranked number 14.

Mayor Scott Avedisian, who in May increased the motor vehicle tax exemption threefold from $500 to $1,500, said the ranking is “not bad.”

“In a city our size, it would not be uncommon to find that we are ranked second, third, or similar in any analysis of statewide rates for taxes,” Avedisian said in an e-mail. “So to be 14th in the state is welcome news. In fact, Newport is the only city with a lower rate.”

He continued, “that being said, I know that there are a number of pieces of legislation pending before the General Assembly. There are good points and bad points in all of the legislation. I am focusing on my upcoming budget and spending my time looking to see if there is a way to increase the exemption that the city of Warwick offers our residents.”

Shekarchi said he’s hoping his bill will have a better chance of passage considering his revisions. He’s interested in hearing testimony from residents and colleagues alike.

“It’s clearly an issue that resonates within the General Assembly, so we want to try to do something that works,” Shekarchi said.


Comments
7 comments on this item

Before Shekarchi changes the car tax, why doesn't he first eliminate state mandates e.g. min. manning for the fire dept. that would greatly reduce taxes. How about eliminating a limit on class sizes so the school administrators can recapture their management rights?

Mr. Shekarchi...do your homework and find out what's causing the car taxes to increase.

$360 a year? Can't afford it. Will have to register in Ma.

Reality,

With all due respect, Mr. Shekarchi is taking a stand on the issue. the first step in eliminating waste, whether it is minimum manning, car taxes etc.. is to choke off the revenue stream and force the administration into fiscal soundness and efficency. The problem is that in Warwick, is that the administration allows the waste and abuse to go on because the net results is votes to keep the same people in power to allow the waste and abuse to go on. The car tax reform issue effects the entire state and if passed will send exactly that message. Cities and town administrators are only concerned about revenue streams, they are not concerned of how they are generated. You make some very valuable points, understand that at least Mr. Shekarchi is taking a stand on the issue and putting it forth. Presently, he has no power to negotiate contracts that some other body ratified.

Fencemen

Mr. Skekarchi is only grandstanding....have him introduce legislation that will eliminate the abuses like min. manning for fire dept etc. Have Skekarchi do his homework first.

Reality, again, with all due respect, you cannot introduce legislation to remove a negotiated contract benefit. The general assembly is not the venue to do that. It is done at the city level. Minimum manning is not RI law, it is a negotiated benefit that has been used by politicians to garner votes to keep them in office at the city level. It is strangling every city and town. The only way to stop it is for the residents to take action, as Coventry has just done. With the Warwick city Council mmetings void of residents, and the budget hearings even worse, there is a slim to none chance that change will take place. If Sekarchi was grandstanding, I would be the first to call him out. Give credit where credit is due. He did a good job on this one.

Fenceman

You are stating the obvious. The state can make it illegal for cities to agree to min manning.

Good luck trying to make that happen.

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