McKee: Cumberland gets short end of car tax deal, too

By MARCIA GREEN, Valley Breeze Editor

CUMBERLAND - The mayor who said a year ago that state aid to education unfairly gives Cumberland one, two and three thousand dollars less per child than other communities, has a new gripe with Providence.

He's talking about the way the state reimburses communities under the auto excise tax phaseout plan.

His complaint has the support of Lincoln's Town Administrator T. Joseph Almond and some members of his coalition of town and city leaders.

McKee told The Breeze last week that the state's plan has been administered so unfairly that some communities are receiving hundreds of thousands of dollars more than Cumberland in annual state reimbursement checks despite having fewer registered autos and trucks.

Says McKee, the auto excise tax program, like the school aid formula, is producing "big winners and big losers.

"Cumberland," he says, "is one of the big losers."

And it's only going to get worse.

As the process of slowly eliminating the tax moves forward, the gap in refunds to the communities grows wider and more unfair, McKee charges.

The $144 million worth of cars and trucks owned by Cumberland drivers yields only half of the excise tax reimbursement check - $2.7 million - as the $80 million worth of cars and trucks registered in Woonsocket - $5.4 million.

Figures are based on 2006 assessments that governed 2007 tax rolls.

It was 1999, a year after the state posted a $132 million surplus, when the General Assembly decided to ease the local property tax burden on individuals by beginning to phase out excise tax on motor vehicles.

While citizens enjoyed a tax break designed to boost the economy by freeing up spending money, local governments would be compensated for lost revenue directly from the state.

(Then Gov. Lincoln Almond warned at the time the plan could jeopardize the state's ability to finance education and highway repairs.)

To implement the plan, the state froze each community's excise tax rate at the 1998 level.

And that, contends, McKee, is the key to the problem.

Cumberland's was frozen at $19.87 per $1,000 assessed valuation; Lincoln's at $30.66, North Smithfield's at $37.62 and Woonsocket's was frozen at $46.58. Cranston, North Providence and Barrington were on the high side at about $42 each and Providence at a whopping $76.78.

Looking at Lincoln, where the rate is frozen at $30.66, cars, trucks and trailers were valued in 2007 at $98.6 million - $45 million less than Cumberland - yet the town was reimbursed under the plan $200,000 more than Cumberland, $2.97 million.

From town to town, vehicles shouldn't bring varying amounts of revenue to community coffers, McKee is saying.

Even though Lincoln enjoys a rate that's higher than many, Almond is agreeing with McKee.

"Going forward, there should be one rate for the entire state. At one point, everyone gets the same," Almond said.

"A car is a car is a car," said Almond.

Almond and McKee say they both suspect that some community leaders knew the legislation was coming 10 years ago and raised the rate the year before the legislation passed.

Says McKee, "Rhode Island can't exist with big winners and big losers any longer. What happens in one community affects other communities."

The plan, championed in 1998 by Pawtucket's former Rep. Armand Pires, who was briefly a candidate for governor, was supposed to be phased in over seven years so that by 2006, citizens were no longer paying any tax on their cars and trucks and trailers.

It's actually been stalled so that citizens are still paying about two-thirds of tax and the state is reimbursing the towns and citizens for about one-third.

McKee argues that if and when the program reaches the 100 percent phaseout promised, Cumberland will be getting $8.55 million while neighbors get more despite having vehicles valued for far less.

At today's valuation rates, Lincoln's check would be $9.03 million, North Smithfield $6.30 million and Woonsocket $16.68 million.

McKee says he's raising the motor vehicle issue now before giving up on the revenue dollars taken away in the governor's supplemental plan.

McKee, whom some have described as a bit of a wonk, claims to have combed line by line through the state budget in search of ways to restore revenue sharing that was snatched at mid-year. He says this excise tax issue can't be explained "in a 30-second sound bite. Facts and ideas have to win the day," he says, "not talk radio and newspaper headlines."

McKee's coalition came together over perceived inequities in the school funding plan.

He admits that some who squawk about school funding shortfalls, aren't so passionate about the excise tax.

"If everything is on the table, then everything is on the table. There needs to be equal distribution to communities. You can't just pick and choose."

Gov. Donald Carcieri had hoped to propel the program two years ago when he signed legislation to enable BLB to purchase Lincoln Greyhound Park, a move expected to provide tens of millions of dollars in tax relief for Rhode Islanders while ensuring that the state maintains its revenue stream from Lincoln Park.

"This deal will enable us to finally phase out the car tax, while helping us preserve a critical source of state revenues," Carcieri said at the time.

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Marcia Green, Editor-in-Chief, The Breeze newspapers

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