Token Tax Cuts are Meaningless Without Spending Cuts

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WPRI’s Dan McGowan offers a very good breakdown of Providence Mayor Elorza’s proposed budget.

Providence Mayor Jorge Elorza proposed a budget Wednesday that slightly reduces residential and commercial property tax rates but still results in an overall increase in actual taxes for most city residents thanks to a large spike in property values. …

Elorza’s $716.8-million tax-and-spending plan for the fiscal year that begins July 1 also increases the car tax exemption to $2,000, which will result in about 6,500 low-value vehicles coming off the tax roll. All told, the mayor’s budget anticipates an additional $13.1 million in new revenue through taxes.

But because Mayor Elorza hasn’t reduced spending in his proposed budget, he has simply adjusted the tax burden slightly so he can say he (modestly) reduced the very unpopular car tax. Providence taxpayers would still pay more in taxes overall.

In a Kathy Gregg ProJo article today, Governor Raimondo and Speaker Mattiello are similarly making noises about cutting this or that tax, presumably in part on the basis of an unexpected rise in gaming revenue. But any tax cut would not be permanent, or would need to be replaced with a tax increase someplace else, if they don’t reduce spending the budget and gaming revenues fall, as everyone agrees they inevitably will.



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