Council reviewing slight break on vehicle taxes

Council reviewing slight break on vehicle taxes

CUMBERLAND - The Town Council's finance subcommittee last Wednesday devoted a full hour of debate to a plan that if adopted would put an extra 10 bucks a year in taxpayers' pockets.

The proposal comes from Councilor Art Lambi, who wants to increase the motor vehicle tax exemption on valuation from $500 to $1,000.

The idea is expected to get a second review at the March 19 subcommittee meeting.

Considering Cumberland's rate of $19.87 per thousand dollar valuation, that's an added $10 for one car and $20 for two, assuming they're worth at least $1,000.

If the current budget is amended first, the reduction would be reflected in tax bills going out May 1, according to Lambi's plan.

The change would cost the town about $170,000 according to Lambi, who said he was using figures obtained from the Office of Tax Assessor.

He noted, however, that because of the town's unsynchronized tax and spending years, the first year's loss would be spread over two fiscal years.

He proposes paying for it this year by tapping the $500,000 additional revenue in past-due property taxes collected through a large tax sale.

Next year's lost revenue would be made up through an increasing tax base, he said.

Lambi's point is that Cumberland is enjoying a small surge in revenue that ought to be shared with taxpayers.

Commenting after the meeting, Lambi said, "There's no such thing as a large tax decrease in local government. The only decrease will always be small and I'm fighting for the small one. If we don't start with $500, we'll never get to the $6,000."

Beginning in 1989, the state had been picking up a percentage of Rhode Islanders' car taxes through an exemption program that by 2010 amounted to the first $6,000 in value. Towns and cities were reimbursed directly by the state for the lost income.

That changed in 2010 when, at Governor Carcieri's urging, the state helped close a $570 million deficit by eliminating all but $10 million of the $120 million program.

With the state still compensating towns and cities for the first $500 in value, the rest was shifted to taxpayers in most communities.

Town Council members say they want a review of the full impact of the change before making a final decision about the 10-buck break.

Suggested Lambi, "With all the positive things happening now, the intention is to reward taxpayers for being patient during the years when the town was required to increase taxes and decrease the exemption from $6,000 to $500."

But Councilor Bill Murray questioned, "What are we really accomplishing? We really need to have a clear picture through your office," he said to Finance Director Brian Silvia.

And Councilor Craig Dwyer cautioned, "Once you lose revenue, it's difficult to get it back."

Lambi countered, "Ten dollars per car may not sound like a lot of money, but $20 is $20," he said referencing the number of families with two or more cars. "It's not much, but the town should take this first initial step to be returning what people had."

Lambi noted that the $6,000 exemption had saved most residents $100 a year.

"I'll take 10 bucks anytime anyone wants to give it to me."

Comments

It's a disgrace that the tax payers of RI get taxed year after year on any car! We pay a state sales tax when we buy..and more taxes and fees year after year. The madness needs to stop. Soon, very soon 75% of mine and your income will all go to pay taxes and fees.