Lawmakers look to address unrealistic vehicle values
Local officials and citizens agree that the values assigned to motor vehicles are “unrealistic” and they joined at the State House last Wednesday to discuss ways give the situation a tune up.
Led by Rep. Joseph McNamara, the group examined proposed legislation he is drafting relating to Chapter 44, the excise tax on motor vehicles and trailers. In a phone interview last week, McNamara said he hopes a final draft will be today or tomorrow after he adds suggestions.
At the meeting, McNamara’s Warwick colleagues, members of the Vehicles Valuation Commission, the Rhode Island League of Cities and Towns, as well as local residents, concurred that the state must develop a methodology that factors in the mileage and condition on vehicles as far as assessments are concerned.
Further, they agreed that using average trade value would be more appropriate than taxing people on the clean trade value, which is the highest tier the National Automobile Dealers Association (NADA) lists for used vehicles.
They also decided that a more transparent appeal process should be implemented. Warwick resident Rob Cote, who during the summer of 2011 organized the Car Tax Revolt, suggested that if people have a conflict with values assigned to their vehicle(s), they should be able to go to a car dealer, get a certified appraisal and take it to the local municipality.
“From the discussion, I learned that it’s not a huge expense,” said McNamara. “Someone said the price is around $10 or $15.”
The commission, which is a volunteer board, currently manages the appeals. David Quinn, a member of the commission, who also is the Pawtucket tax assessor, said he is concerned that the commission would be responsible for reviewing the condition and mileage for more than 1 million vehicles.
“I honestly don’t know how you do that,” he said at the meeting.
He also noted that it’s “not a stand alone issue,” as cities and towns would lose revenue if assessments were adjusted. While he agrees the assessments need to be altered, Dan Beardsley, the executive director of the Rhode Island League of Cities and Towns, expressed the same concern.
Sen. William Walaska said it would be “almost impossible” for the commission to address every appeal. He also said he feels “assessments are not very transparent.”
“If you want to be transparent with tax rates and raise revenue, you don’t do it through assessments that are unrealistic and these assessments are unrealistic,” said Walaska.
Additionally, upon the suggestion of Westerly District Attorney Sam Azzinaro, a section of the law that relates to maximum taxable value, which is responsible for discrepancies, is being omitted from the legislation.
In an interview on Thursday, Cote said his main concern is that if and when the legislation is passed it won’t go into affect until Jan. 1, 2013. He hopes it will be implemented upon passage.
“Tax bills don’t go out until July 1 so if it goes through upon passage nothing changes until then anyway,” said Cote. “It’s not like we have to go back retroactively since December 31. It would mean the new program will be instituted by July 1 of this year.”
McNamara said it’s possible the bill will take effect upon passage.
During the meeting, Cote also suggested that in no situation should a value be placed on a vehicle that is higher than the value of which sales tax is collected.
“The appeal process should mirror the appeal process that you have with sales tax,” he said in an interview. “Then, you have continuity.”
Cote feels that lowering the car tax and forcing cities and towns to work within their budget would allow the process of cutting budgets and streamlining the city to run more efficiently.
“They are worried about the revenue stream but a portion of it is unjustifiable because it’s based on a fictitious value,” he said. “It’s unethical and corrupt. It’s like them passing a law saying, ‘On, Tuesday, we’re breaking into your house and taking your kids’ piggybank because we need it for taxes.’ It’s just wrong and they can’t keep coming up with more and more ideas to feed this machine that is going off the tracks.”
Nevertheless, Cote said he is pleased with the results of the meeting. McNamara is in agreement.
“I think it was a positive outcome for everyone there and I’m thankful,” said McNamara. “It was nice to see a wide variety of individuals getting together to come to a consensus on a legislation that I believe will improve not only the function of the Vehicle Valuation Commission, but will give citizens of the state of Rhode Island realistic appraisals and values for their vehicles.”
McNamara also said he is happy that Commission Chairwoman, Linda L. Cwiek, who is the tax assessor of North Kingstown, mentioned that the commission recently sent a letter to Governor Lincoln Chafee requesting him to fill the three vacancies on the commission. McNamara also sent a letter asking Chafee to fill those spots.
“It will enable the commission to fulfill its statutory obligations in a more efficient manner,” he said.
Once he finishes a final draft, McNamara said it will be referred to a legislative committee and a hearing will be posted on the state website. Members of the public will be allowed to offer written and oral testimony. Then, he said, there will probably be a Senate version, which will go through the same process and be passed down to the floor to be signed by Chafee.
So far, he is optimistic with the changes and said his colleagues at the State House will have the opportunity to sign on to the legislation as co-sponsors.