Car tax bills go out later this month

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Not that anyone is anxious to get them or in a rush to pay them, but 50,000 city car tax bills should be ready to go in the mail by Aug. 25. When they arrive the bills will be at least 5 percent less than what they were last year and, in a lot of cases, there won’t be a bill at all. That’s all because of the $9.6 billion state budget approved by the Senate and signed into law by Gov. Gina Raimondo last week – more than a month after the start of the fiscal year on July 1.

Along with the budget finally came approval of House Speaker Nicholas Mattiello’s six-year plan to phase out municipal car taxes. In the first year of the plan, which eliminates the car tax through a combination of factors, Warwick car owners will see the 5 percent reduction in their bills plus the elimination of bills for vehicles that are 15 years old or older. There are 109,000 vehicles registered in the city of which 21,000 are at least 15 years old.

In future years of the phaseout program, the Warwick tax – which has remained consistent at $34.60 per $1,000 of valuation – will be reduced. Also, the basis of valuation will change to more accurately reflect vehicle values.

Tax Assessor Christopher Celeste, who has been on a merry-go-round on whether to go ahead and issue the tax bills or wait out the state budget impasse, estimates the state relief package will cut about $2.5 million from city collections. Under the legislation those funds will come back to the city in the form of state aid. When fully implemented, the city is looking for the state to reimburse upwards of $22 million annually. Overall, the state will be reimbursing $222 million annually to cities and towns when the phaseout is completed.

It was the sustainability of Mattiello’s plan that troubled the State Senate. With only hours before the commencement of the new fiscal year, the Senate approved an amendment to the budget that would implement a “trigger” to freeze the program if the state fell short on funding. That sent the budget back to the House. It was late. Mattiello said the revised bill broke an agreement he had with Senate President Dominick Ruggiero. Mattiello adjourned the House, leaving the state without a 2018 budget.

Warwick and other municipalities that had already delayed car tax bills were in a quandary. As there appeared to be little effort to resolve the budget impasse, some municipalities, including Warwick, went ahead and printed up the bills as if the relief plan was dead for this year. Then it looked like the impasse would be resolved and Mattiello’s plan for tax relief would, indeed, happen.

Fortunately, Celeste and Mayor Scott Avedisian put a hold on sending out the bills. Those bills will end up going in the recycling bin, but the city had avoided the greater expense of wasted postage. Even more important, while car tax revenues were delayed, the city would not be faced with recalculating 50,000 bills and the confusion that would cause.

Now, Celeste explained, the city and its software company is “working diligently” to write and implement the program to issue the reduced tax bills. Celeste said those taxpayers – from 400 to 500 of them – who went ahead and paid car taxes based on last year’s bill would see proof of their payments when they get their bills. In some cases where cars are coming off the tax rolls, there may be no taxes due. Celeste said those issues “would be reconciled.”

“We caught it at a good time,” Celeste said of the decision not to send out car taxes before the budget impasse was resolved.

Under the resolution between the two General Assembly leaders, the Senate approved the House budget and Mattiello agreed that the House would consider an amendment that the state director of revenue would commission an annual study of the state’s ability to finance the program.

“They’re going to get car tax relief,” Celeste said of Warwick car owners.

He also said they will get plenty of time to pay their bills. Once the bills are in the mail Celeste said people would have until Sept. 30 to make their first quarterly payment or the full payment if that is due.

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