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Public speaks out against motor vehicle tax in South Kingstown

April 18, 2011

SOUTH KINGSTOWN–The town held its first public hearing on the preliminary budget Wednesday night with most of the public speaking out against the motor vehicle exemption tax.
With both the town council and school committee present, Town Manager Stephen A. Alfred first gave an overview of the total $89 million municipal budget.

Alfred explained the changes in the motor vehicle exemption if vehicles were taxed at the $500 level or the $3,000 level. At the $500 exemption, the tax distribution for 2011 would be $14.30 with a total motor vehicle excise tax decrease of $4.21 million. This represents an increase of 0.11 cents. At the $3,000 exemption, the tax distribution would be $14.54 with a total excise tax decrease of $3.18 million. This represents an increase of 0.35 cents. Despite the changes in the motor vehicle excise tax, the total tax levy would not change and remains at $66.1 million.

“The increase in the levy doesn’t change, but it means the money raised through the motor vehicle excise tax has to increase,” Alfred said.
Although it was a public hearing, not many from the public spoke on the budget, but the few who did concentrated their concerns on the motor vehicle excise tax.

Though Steven Corali thanked the town council and school committee for their service, he said he disagreed with the $500 exemption and that it was not enough.

“You can now sell a junk car and get $350 so a $500 exemption is nothing. I’m going to have to itemize whether I pay my car tax or house tax. Ninety-five percent of the people have a car less than $9,000 and don’t itemize. I hope you look again at that money for me and my house,” Corali said.

Resident Bob Trager said he agreed with Corali, stating that many people would not benefit from the motor vehicle tax exemption at the rate that is proposed.

“If you break it down to a household with two cars and say it’s $11,000 for a car. Your house would have to be $425,000 and if the two cars are $11,000 each, it would be a wash. If you had no taxes on the car, maybe you’d sell a few more cars.

Trager also said he did not know how the Town Manager derived the $500 and $3,000 figures. In response, Alfred said he took numbers close to the midpoint and used the average costs of a car and house to compute the numbers.

“If you’re taking the average value of the vehicle and house whether its $14.21 or $14.54, the tax effort increase is about the same,” Alfred said.

“You say things that confuse people,” Trager said “Obviously, you’re a master of numbers and people come here and you spew more numbers out.”

For more information pick up a copy of The Narragansett Times.

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