PROVIDENCE, R.I. (WPRI) – House Speaker Nicholas Mattiello said Friday that because state leaders are still hammering out the details, specifics on how to pay for his proposed phaseout of the car tax will remain thin until a final budget is released.
Mattiello’s plan – unveiled on Tuesday – calls for eliminating the car tax over six years at an eventual cost of $221 million, which is the amount the state will pay back communities for the revenue they lost.
The first year of the phaseout would cost $26 million in the new state budget year that starts July 1, with a reduction in car tax bills expected for all drivers and the elimination of the tax for those whose cars are more than 15 years old. During a taping of WPRI 12 Newsmakers, Mattiello said his aides would be looking for “efficiencies” in state government to pay for the proposal.
“It’s impossible to define where you’re going to find money for anything that’s already in the budget or that’s suggested,” Mattiello, D-Cranston, said. “You put the budget together and you effectuate the people’s priorities.”
When pressed on areas of government that could be run leaner, Mattiello said officials are considering everything, including “looking at changing formulas so you can maximize federal dollars and try to put money in different buckets so we get more federal reimbursement.”
Last month, State House number-crunchers revealed the 2017-18 budget was now facing a $134-million shortfall. Mattiello acknowledged his car tax proposal adds $26 million to that deficit, but he said the policy is a priority because “people absolutely want car tax relief.”
“I’m getting people calling me thanking me,” he said. “I haven’t had anyone yet call me and say, ‘Please don’t do it.’”
Final details on the proposed $9.3-billion state budget will be spelled out when the entire tax-and-spending plan is released by the House Finance Committee, which Mattiello said he hopes to happen within two weeks.
But it’s already clear declining tax revenue this year does not bode well for Gov. Gina Raimondo’s signature proposal to offer free college tuition at Rhode Island’s public institutions.
“The car tax is a little different: the car tax is giving their own money back,” Mattiello said. “Any new spending proposal this year is very difficult to consider or accomplish.”