Eliminating Auto Property Tax ‘Bad Environmental Policy’
April 28, 2022
As Senate president, Dominick Ruggerio has a big say as to how Rhode Island is run, so when he recently told the Northern Rhode Island Chamber of Commerce his priority for spending state revenue was to eliminate the property tax on cars, it has to be taken seriously. Reportedly, the senator wants to increase funding for the phaseout from the $167 million in the governor’s proposed budget by a “mere” $65 million to a total of $232 million. (It is about $100 million in the current fiscal year.) This is not a one-shot; it would be every year.
Though ending car taxes may be bad policy for economic, environmental and social-justice reasons, because it is presumed to be politically popular, few seem willing to question it, even as revenue is needed for health care, housing, environmental protection, eldercare, libraries and so on.
With the first $5,000 of a car’s value already exempt from property taxes, the remaining car tax is one of the few taxes on wealth. Eliminating it would shift the tax burden from those with many vehicles and/or expensive luxury cars to those with older, fewer, or no vehicles at all. From data I saw when on the state’s Transportation Advisory Committee, about 11% of Rhode Island households have no cars at all, and that number was about 22% in Providence. They would get no tax break at all, while the 5% of households with four or more vehicles, the ones that contribute the most to pollution and congestion, would get a big windfall. This is not social justice.
Ending taxes on cars encourages more driving, just when it should be evident we should be encouraging less, both to keep as much of our energy dollars within the state’s economy as possible instead of sending them to out-of-state oil giants, and to address global climate and local pollution concerns. We have already shifted auto registrations from a weight-based system to a flat fee, and as all vehicles get the phaseout regardless of the gas-guzzling they do, we are again missing a chance to give preferential treatment to fuel-efficient and electric cars, thus encouraging and rewarding a conservation ethic. This is bad environmental policy.
Driving is already highly subsidized when all costs such as “free” parking, protecting our oil supplies, stormwater runoff, court and medical expenses from accidents, maintaining and repaving local roads, lighting, snow removal, and enforcement. Much of this is paid for, not from gas taxes, but by local government, so it is only fair that motorists who need these services help pay for them.
I did write to Sen. Ruggerio as a constituent, suggesting he at least also help those that get around by public transit by supporting the bill, S2015, to make RIPTA fare-free for all. That would speed up bus trips, help low-income folks, those that ride because they care about the environment, and encourage others to ride too, which could help reduce congestion, pollution and climate emissions. I explained my estimate that the additional cost to taxpayers would be about $16 million a year, only about 1/14 of what would be given to motorists. Haven’t heard back yet.
Barry Schiller is a transit rider and longtime transit advocate. He also owns a car.
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The politicians who advocate the end of car taxes completely ignore the fact that cities and towns in the state rely on car taxes to help their budgets. Eliminate the car taxes and the municipalities will simply increase the property taxes to make up the losses. In short, all this effort is eliminating is the phrase “car tax”. Sounds good in an election year, but it is a smoke screen.
Once again you are spot on, Barry!
A lot of those taxes could be lowered if only the tax-evading locals running around with phoney Florida plates on their expensive cars were paying their fair share like the rest of us.
Maybe we should just ban automobiles. That would both eliminate the car tax and the DOT obsession with building and widening roads. A win for climate, clean air, and sanity
Here’s a thought. Instead of eliminating the car tax, re-direct what it can be used for, and ensure that it is all it will be used for. One use should be to encourage a shift to electric vehicles and charging stations. Another, to develop public transportation statewide that can actually be used, not only in Providence. Another is to use NONE of it for any budget item not DIRECTLY related to cars and roads. Not for schools, salaries, debt service or any other operational expense. We have far too many taxes and fees that do not get used for their intended purpose but instead end up in the general fund.