PROVIDENCE, R.I. (WPRI) – Making the case that car taxes unfairly target the state’s most vulnerable residents, the Democratic candidates for Rhode Island governor and Providence mayor pledged Wednesday to provide car tax relief if they’re elected Nov. 4.
State Treasurer Gina Raimondo and mayoral hopeful Jorge Elorza stopped short of offering any concrete plans for reducing the tax, but the candidates said they both consider the issue a priority during a press conference at Plainfield Auto Sales on Plainfield Street in the city’s Silver Lake neighborhood.
“The car tax is one of the most regressive taxes that we can have here in the city,” Elorza said. “It’s a new tax and it falls squarely on those who are least able to afford it.”
Elorza is running against independent Vincent A. “Buddy” Cianci Jr. and Republican Daniel Harrop in the race for mayor. Raimondo is running against Republican Allan Fung and Moderate Party candidate Robert Healey.
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Providence residents currently pay $60 per $1,000 of assessed value – the highest tax rate in Rhode Island – but Elorza said the burden was made worse by the city’s 2011 decision to reduce the tax exemption on vehicles from $6,000 to $1,000. (The city also reduced the rate from $76.78 per $1,000 to $60.)
The change helped the city bring in more than $13 million in new annual revenue, but effectively resulted in a new tax for nearly 60,000 car owners. Providence currently generates $31.6 million annually from car taxes.
Elorza said his goal is to raise the car tax exemption above $1,000, but did not say whether he could make that happen in his first year in office. The City Council is projecting a budget gap of between $15 million and $24 million for the fiscal year that begins July 1, 2015.
“It’s likely going to take a long time before we get the exemption back up to $6,000 where it was previously, but we’re going to start and we’re going to make it a priority because fundamentally it’s an issue of fairness,” Elorza said.
As governor, Raimondo would not have control over any municipality’s car tax rate, but she said she wants to “give cities and towns the tools they need to tackle their fiscal problems” so they don’t have to rely so heavily on taxes. Raimondo and Elorza also said they would like to reassess the vehicle valuation process, which has long come under fire from residents who say the actual value of their car is not close to the assessed value.
All three of the candidates for mayor have pledged to make changes to the car tax, but none have released policy proposals for accomplishing their goals.