Not that anyone is anxious to get them or in a rush to pay them, but approximately 18,000 car tax bills should be ready to go in the mail by Aug. 21. When they arrive the bills will be at least 5 percent less than what they were last year and, in some 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.
“I’m very happy, it’s too bad it took this long but at least it’s done. I don’t want to hash out old wounds but it’s done and hopefully something like that never happens again because they put a lot of communities in fear of the unknown,” said Johnston Mayor Joseph Polisena.
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, Johnston 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.
“I commend Speaker Mattiello for putting the plan forward and sticking with it. I’m glad that Senator Ruggiero, the president, had cooler heads prevail, and now we move forward and turn the page,” said Polisena.
In future years of the phaseout program, the Johnston tax – which has remained consistent at $41.46 per $1,000 of valuation – will be reduced. Also, the basis of valuation will change to more accurately reflect vehicle values.
Johnston had been on a merry-go-round on whether to go ahead and issue the tax bills or wait out the state budget impasse. In the end, the town chose to wait to send out the 18,000 bills, which cost about $35,000 to print and pay for postage. Under the legislation those funds lost in car taxes will come back to the town in the form of state aid. Overall, the state will be reimbursing $222 million annually to cities and towns when the phaseout is completed.
“I’ve never played poker in my life, but I kind of played poker and I think I won the pot by holding off,” said Polisena. “I didn’t want to inconvenience the taxpayers because they’d get a bill for one amount and then we may have had to change that. We avoided a big mess.”
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.
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, such as 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.
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.
“I also think it’s going to stimulate the new car market for people to buy newer cars now. That, in turn, will help economic development,” said Polisena.
The mayor added that car owners will get plenty of time to pay their bills. Once the bills are in the mail people would have a grace period from Oct. 1 through the 24 for their first quarterly payment. What remains unclear, however, is if the town will receive funds from the start of the fiscal year, July 1, retroactively now that the budget has been passed.
“I don’t know if we’re going to be made whole, I would like to assume that because our fault, meaning the cities and towns, mayors, managers and town administrators. I would hope that they would make us whole,” said Polisena. “For us, there was a possible loss of $22,000 for the schools and a few thousand for other programs that come to the town directly. Can we absorb it, yes, but I don’t want to and we shouldn’t have to.”