Gov. Raimondo offers alternative to Mattiello approach on cutting car tax

PROVIDENCE, R.I. (WPRI) — As one of the key points discussed in her State of the State address, Gov. Gina Raimondo announced that she is putting forward a plan that would cut the car tax by about 30 percent.

Raimondo’s proposal would require cities and towns to use the fair trade-in value of cars, or 70% of full value, starting in July 2018. She estimated it would cost the state about $55 million to reimburse municipalities for the lost revenue.

An example provided by the governor’s office showed that the car tax on a 2010 Honda Accord would fall by $40 in Newport, $204 in Providence, and $306 in Cranston.

Raimondo said in the speech she wants a plan to lower the car tax that is “fair, fiscally responsible, sustainable in the long run and provides relief for every Rhode Islander.” She added: “We also must protect all the progress we are making, investing in our schools, job training, and economic development.”

The proposal is Raimondo’s counter to House Speaker Nicholas Mattiello, who pledged during his campaign last year to eliminate the car tax entirely over the next five years, and use state money to replace the roughly $215 million municipalities currently collect from it.

Mattiello said after the speech he still wants to go further than the governor. “I’m calling for a total phaseout. I believe the public wants it,” he said. “We’ll hear from the public in committee and I strongly believe they want a total phaseout and that’s what we’re going to work towards.”

Commenting on Mattiello’s plan Wednesday, Raimondo said “he has said that he wants to eliminate it – I haven’t seen a plan that shows where we would get $200 million, and do that in a responsible way, so as I said last night I’m open to compromise.”

While the speaker is still working out the specifics of his plan, he has suggested that rising revenue and economic growth across the state will help pay for the elimination of the car tax.

The governor is scheduled to unveil her full budget proposal for 2017-18 on Thursday.