City waits to see what happens on state budget

By John Howell
Posted 7/4/17

By JOHN HOWELL The Speaker of the House has no intention of altering his plan to bring car tax relief to the owners of motor vehicles even though the state budget for the fiscal year beginning July 1 is in limbo. But Cranston isn't waiting for

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City waits to see what happens on state budget

Posted

The Speaker of the House has no intention of altering his plan to bring car tax relief to the owners of motor vehicles even though the state budget for the fiscal year beginning July 1 is in limbo.

But Cranston isn’t waiting for legislators to resolve their differences and is moving to get out the bills.

Larry Berman, spokesman for Nicholas Mattiello, said Monday the Speaker is urging the State Senate “to come back into session” and approve the $9.2 billion state budget as agreed. Berman’s counterpart for Senate President Dominick Ruggerio contends the Senate has approved a budget and it’s up to the House to approve it.

“It’s up to the House to consider it,” said spokesman Greg Pare yesterday.

As part of the budget package, $26 million is allocated to the first year of a six-year plan to phase out the local car tax. Under the plan, cities and towns would be reimbursed for lost car tax revenues that would total $226 million annually when fully phased out.

In anticipation that some form of car tax relief would be approved, Cranston, Warwick and Johnston delayed mailing car tax bills rather than being faced with having to credit or reimburse taxpayers. Now with uncertainty swirling over the outcome of the state budget, Cranston isn’t waiting any longer.

Mark Schieldrop, assistant to Cranston Mayor Allan Fung, said Monday that the city is planning on sending out car tax bills.

“Because of the General Assembly and what happened we’re just going to send the bill out as they were before the phaseout and we’ll just have to deal with sending rebates out or making adjustments down the road depending on what ends up happening with the General Assembly,” Schieldrop said.

Cranston Tax Assessor Sal Saccoccio said the bills would be sent out in late July, and the deadline to pay them will be extended to the middle of August. Saccoccio said there are approximately 82,000 vehicles in Cranston, which is about one for every resident.

On the other hand, having just notified taxpayers that motor vehicle taxes would be delayed last week before the budget flap, Warwick Mayor Scott Avedisian said Monday in an email, “We will wait a week to see if there is movement from the Legislature to reconvene.  If there is no indication of that, we will send out car tax bills under the existing law.”

He goes on to say, “Should they make further changes to that law, we would make future credits to taxes owed.  The intent of the state law is to lower the tax burden for residents, and we will make sure that that is exactly what happens.”

Both of the House and Senate bills would remove 21,000 Warwick registered motor vehicles that are 15 years or older from the city tax rolls this year as well as reduce the valuation assigned vehicles by 5 percent. The city has 109,000 registered motor vehicles that generate $24 million in taxes. In the first year of the phaseout, city tax revenues would drop $3 million, which would be reimbursed by the state.

The House version of the budget, which was approved by the Senate Finance Committee, was expected to gain Senate approval Friday. The Senate amended the car tax article, however, to include what Senate Majority Leader Michael McCaffrey called “a safeguard” Monday. The amendment would postpone the next phase of implementing elimination of the tax if the economy should take a downturn and the state was financially strapped.

“It would level fund it,” said McCaffrey, indicating the relief plan would stay in place but simply be delayed depending on the state’s financial situation.

McCaffrey pointed out that unlike other states facing budget impasses threatening massive furloughs and a shutdown of government, Rhode Island has a provision to continue operations under the terms of the prior budget until a new one is in place.

Berman said Mattiello and Senate President Dominic Ruggiero had an agreement the budget as approved by the House would be passed by the Senate.

“That wasn’t the original agreement,” Berman said of the amendment that was made unanimously by the Senate. “They backed off on their word.”

Berman also pointed out that “they did this at the eleventh hour” when, if there were concerns over the state’s ability to carry out the program senators could have raised them before the Senate Finance Committee.

Asked whether Mattiello thought a “safeguard,” as McCaffrey puts it, is a bad provision, Berman pointed out that the budget is introduced annually and the program could be amended at that time. There’s no need for an amendment.

“There’s a trigger every year it gets approved,” he said.

Pare argues the Senate has expressed concern over the sustainability of car tax relief since Mattiello introduced the legislation and the aim of the Senate is to provide “added taxpayer protection.”

In a statement issued Friday Ruggerio said, “Speaker Mattiello does not dictate to the Senate which bills we are permitted to amend. The Senate will thoroughly review the language of every piece of legislation that comes before us and pass the language we deem most appropriate on behalf of our constituents, whether that bill is paid sick leave, domestic violence legislation, or the budget.” He said the Senate “repeatedly” expressed concerns to Mattiello over the sustainability of the car tax relief program.

With both sides saying the other should make the move to reconvene, Pare was asked if the Providence Journal headline of “Standoff” was accurate. Pare said it was, which raises the question whether there might a “shootout.”

(With reports from Jacob Marrocco, editor of the Cranston Herald)

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