PROVIDENCE – The fiscal 2018 budget impasse is no more. Legislators resolved their differences over the budget that was to have begun July 1, and Gov. Gina M. Raimondo quickly signed it into law Thursday afternoon.
The new state budget provides $9.2 billion in state and federal dollars for state services, including K-12 education, tax relief, aid to cities and towns and free tuition for students entering the two-year Community College of Rhode Island.
The budget holdup emerged in late June, and related to how the state would reduce the automobile excise tax. The House had approved a six-year plan to eliminate the car tax, while the Senate added an amendment that would have changed the planned reduction during an economic downturn.
On Thursday, the Senate voted to eliminate its amendment from the budget and create a separate requirement for annual reports on the motor vehicle phaseout, according to a statement issued through the Senate spokesman.
Senate Finance Committee Chairman William J. Conley, D-East Providence, said the agreement frees the state to move forward, “allowing the excise tax phaseout while still providing protections that will monitor its economic feasibility for the state.”
The car tax reduction will begin immediately. It will reduce the taxable portion of a car’s retail value from 100 percent to 95 percent, and increase the minimum exemption from $500 to $1,000, and cap the tax rate at $60 for each $1,000 of value in 2018.
Cars that are 15 years or older will no longer be taxed, effective this year.
While the dispute over how to handle car tax relief had resulted in the budget impasse, the final passage of the budget on Thursday clears many other bills that had been held in limbo.
They include:
Restoration of a no-fare program for low-income elderly and disabled riders on the Rhode Island Public Transit Authority.
The minimum wage will increase by 90 cents, to $10.10, on Jan. 1, 2018, and gain to $10.50 on Jan. 1, 2019.
Cigarette taxes will increase to $4.25 a pack, up 50 cents a pack, a move expected to generate $7 million in new revenue.
The state will begin collecting sales tax on online purchases made in Rhode Island. Amazon.com, the nation’s largest online retailer, has already voluntarily contributed sales tax on local purchases.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com
