House Speaker Nicholas Mattiello doubled down Tuesday on his pledge to begin a phaseout in 2017 of the state’s unpopular car tax.
But it remains unclear where the money to pay for the tax cut will come from, particularly as the state faces a $110 million deficit for the fiscal year starting July 1.
During his speech on the first day of the 2017 legislative session, Mattiello revisited a promise he first made while facing a stiff re-election challenge from Republican Steven Frias. “Now is the time to be bold,” Mattiello said. “Now is the time for decisive actions that will improve the lives of all Rhode Islanders. That is why my number one priority is phasing out the car tax and eliminating it within the next five years.”
Asked later by RIPR how the tax cut will be paid for, Mattiello said, “We’re not planning on making any cuts. We’re going to control spending. We’re not going to increase spending unnecessarily. And we’re going to rely on economic growth …. The state is slowly but surely moving in the right direction.”
Rhode Island’s cities and towns collect $215 million each year through the car tax. Mattiello said he wants to hold the communities harmless while gradually eliminating the car tax in increments of roughly $40 million each year.
But while the speaker has broad power over the final outcome of the state budget, the outlook is clouded by how Rhode Island faces a $110 million deficit for the fiscal year starting July 1, and how Governor Gina Raimondo and Senate President Teresa Paiva Weed have called for a broader look at changes to the car tax.
Mattiello said he has not received any indication from Raimondo will include a car tax cut in her budget proposal, which is expected January 19.
Nonetheless, Mattiello pledged during his speech: “Make no mistake, this year’s budget will provide significant relief from this regressive tax. Cutting the car tax will also improve our tax competitiveness nationally, advance quality of life in community, and increase spending in our local economy.”
After previously winning the support of a Democratic caucus, Mattiello won election to his second full term as speaker on a party line 63 to 11 vote, with one representative absent.
Mattiello rose to what is often called the state’s most powerful elected post after the sudden resignation in 2014 of Gordon Fox, who was later convicted in a corruption case and who remains imprisoned in Pennsylvania.
In his speech, Mattiello said he has fulfilled an initial promise to focus on jobs and the economy. As evidence, he pointed to cuts in the state corporate tax, a raising of the exemption of the estate tax to $1.5 million, and eliminating the state income tax on Social Security and other retirement benefits for “many recipients,” among others.
Mattiello said his priorities for 2017 include raising the minimum wage, although he would not say by how much. The speaker said he also wants to improve public education, expand the estate tax exemption, and increase the level of income exempted for retirees on their state income tax.
Across the Statehouse, in the Senate, Senate President Teresa Paiva Weed also cruised to re-election. She said her priorities include increasing mental health services — a step, she said, that would have widespread benefits — and passing a package of criminal justice reforms that didn’t win House support in 2016.
Twelve new state reps and four new state senators were inaugurated as part of the opening day festivities, joined by throngs of family members and friends.
The General Assembly remains overwhelmingly Democratic, with just 11 Republicans in the 75-member House and five in the 38-member Senate.
House Minority Leader Patricia Morgan was generally supportive of Mattiello’s opening day message, but she called for more steps to help average Rhode Islanders, including reducing regulations on small businesses.
Governor Raimondo attended the start of each of the legislative chambers, although she spoke briefly only in the Senate. Asked if that was meant to send any kind of message, Mattiello offered a one-word answer to reporters: “No.”
