A bill to eliminate the car tax is scheduled for its first hearing in the House Finance Committee Tuesday. Lawmakers will likely hear arguments for and against the proposal, but they are not expected to vote.
Starting a phaseout of the car tax is House Speaker Nicholas Mattiello’s top priority for this legislative session. Almost every member of the House of Representatives has co-sponsored Mattiello’s plan, so the bill has a clear path to passage.
Mattiello’s proposal would cut car tax revenue by $26 million in the fiscal year starting July first. Mattiello says the state will compensate cities and towns for losing that money.
Completely eliminating the car tax will take six years, under Mattiello’s plan, and will cost the state $220 million a year. Critics question whether that’s sustainable. Mattiello says he’s counting on economic growth and leaner government to enable the state to compensate municipalities for lost tax revenue.
