Of course, Governor Raimondo’s new tax on vacation-home rentals needs to go. Rhode Island government doesn’t have a revenue problem, it has a spending problem.
The bigger take-away from this Providence Journal article is how far off base her administration’s projections have turned out.
So far, Rhode Island’s plan to collect an extra $7.1 million in annual revenue through new vacation-home rental taxes is falling short of expectations.
In the first eight months since collections began, from last July 1 to the end of February 2016, the state has received just $1,563,565 in new rental taxes, according to Neil Downing, chief revenue agent for the state’s Division of Taxation.
Even on the basis of another projection – $5.3 million – presumably revised to account for a shorter season last year, the $1,563,565 actually collected is far short. Meanwhile, the biggest effect of the introduction of a new (ineffective) tax/fee is to reinforce Rhode Island’s reputation as heartily anti-taxpayer and anti-business.
Is this a preview of how far off the projections by her administration about toll revenue are? If so, what happens then? We know the answer: “Sorry, our projections were off. We now need to toll all vehicles including cars.”