McKee, Legislative Leaders Propose Elimination of Car Tax, Reject Tax Rebate and Cut to Gas Tax

McKee, Legislative Leaders Propose Elimination of Car Tax, Reject Tax Rebate and Cut to Gas Tax

At a press conference held in the State Room in the Capitol building Thursday afternoon, Governor Dan McKee, flanked by legislative leaders Speaker Joe Shekarchi and Senate President Dominic Ruggerio, announced that this year’s budget would include ending the tax one year early, which is expected to cost the state $64 million.

The draft budget is being considered by the House Finance Committee on Thursday night.

The three had also considered sending checks to each taxpayer as a de facto rebate as the state now has a record surplus. Rhode Island is estimated to finish the fiscal year with a surplus of close to $900 million.

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They also considered a cut to the state’s gas tax, but rejected the proposal. On Thursday, Rhode Island officially hit $5.00 per gallon according to AAA Northeast.

In March GoLocal reported that Connecticut Governor Ned Lamont has announced that he would sign legislation to suspend his state’s gas tax, lowering the cost of gas by 25 cents per gallon.

Rhode Island’s gas tax is substantially higher than Connecticut’s.

Rhode Island’s tax is more than $0.35 per gallon. Connecticut’s goes from $0.25 to zero.

 

Republicans Criticize the Failure to Cut the Gas Tax

The Rhode Island Republican party said in a statement, "Today, Governor Dan McKee, House Speaker K. Joseph Shekarchi, and Senate President Ruggerio announced a deal on next year’s state budget. It included some tax relief but did not include a suspension of the state gas tax. This deal was announced on the same day gas prices in Rhode Island hit $5 a gallon. Meanwhile, other northeastern states like Connecticut and Maryland have temporarily suspended their state gas tax because of the rise in gas prices that occurred during the Biden administration and began prior to the Russia-Ukrainian War."

“We are pleased that the proposed budget will include some tax relief, which Republicans have called for over the years. For example, the state budget will include the completion of the car tax phaseout which was originally promised by former House Speaker Nicholas Mattiello in October 2016 in response to being challenged for reelection by Republican Steve Frias. It will also include a phase-out of the income tax on military pensions, which has been supported by Republican legislators. However, with gas prices above $5 a gallon, we must suspend the gas tax now," said the GOP

“Rhode Island has an $878 million dollar surplus. There is enough money in the state treasury to temporarily suspend the state gas tax until gas prices come down to a more reasonable level. The question is not whether we can afford to pay for a reduction in the gas tax reduction but why do the politicians running the state house refuse to reduce the state gas tax?" The GOP added.