August 29, 2011

Car Tax Shame All Around

Justin Katz

It's always appropriate to call for a greater sense of shame among Rhode Island's politicians, but Ed Achorn was a little too specific in his column, last week:

The politicians of Rhode Island would be ashamed of themselves, had they not lost the capacity for feeling shame long ago. Their determination to balance their enormous budgets, larded with stunning benefits for special interests, on the breaking backs of struggling working people is outrageous.

I write of the General Assembly's action in permitting cities and towns to hike property taxes on the most shabby motor vehicles. Now, some municipalities are hammering people who own anything valued at $500 or more (according to the municipalities' highly skewed definition).

The reality must be acknowledged that municipal governments didn't have to increase their revenue from the car tax. Other means exist for them to absorb losses in money that the state, in its mismanagement, is unable to provide. For one, lost revenue is among the exemptions that allow them to raise property taxes beyond the cap; going that route would have given residents a stronger sense and say in whether their hometowns raised taxes at all. More wisely, local governments could simply have cut back spending, even though it might mean reducing the scope of their activities. We can't forget that the General Assembly also gave cities and towns permission to reduce school budgets for a couple of years, temporarily disengaging the statutory ratchet that requires school spending to go in no direction but up.

Yes, state legislators ought to feel shame that the tools that they leave to municipalities to balance budgets are so limited. Taxing clunkers was the easiest and most visible means of compensating for losses in state aid, and the General Assembly should have taken the opportunity of hardship to tone down the demands that it makes on local governments, from minimum manning to basic education plan (BEP) requirements to the way in which labor contracts must be negotiated.

The real shame, however, belongs with the people of Rhode Island, who continue to accept government as it is. Apathetic or on the take, too many voters implicitly agree that this is the way things ought to be.

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Some towns just could not cut by the amounts that they lost in state aid. There comes a point where you do have your bottom line that you have obligations for. Once the deficit starts eating into those, there isn't much you can do.

Granted there probably are towns that still have fat in their budgets, but there are some that do not.

Plus, another thing that people need to keep in mind that a side intent of the car tax is to get tax money from non-property owners. It's pretty easy for someone to dodge quite a bit of tax by simply renting. The car tax hits them with some of this. Then again, if that really is the intent, then why not allow a different tax level or a writeoff for property owners in town?

Posted by: Patrick at August 29, 2011 9:41 AM

Renters pay property tax. They just pay it via their landlords. Property tax is just one of many expenses, like insurance and maintenance, that a landlord has to factor into the rent if he is to make a profit

Posted by: David P. at August 29, 2011 11:02 AM

Patrick, apparently this is a toughie for you to figure out, , so allow the benevolent Sammy to assist you

Landlords don't pay property taxes, they pass the cost on to their tenants

Sammy the landlord, in RI and Arizona

Hope this helps.

Posted by: Sammy at August 29, 2011 1:02 PM

Gee,what a surprise,Sammy is a landlord!!

Posted by: joe bernstein at August 29, 2011 4:50 PM
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