One tool that the General Assembly gave towns and cities to generate revenue to replace declining state aid seems to be misfiring on all cylinders.
The issue is the vehicle excise tax exemption, which the legislature allowed municipalities to drop from its previously mandated minimum of $6,000 to as low as $500. For towns and cities struggling to cover expenses, the allowed change has become a significant salve to budget hemorrhaging.
Many impassioned – if not angry – words have been said about the tax, and especially about how the values of older, high-mileage vehicles have been calculated. These arguments miss the point, in that the real issue is municipal budgets that are still not doing what they should be in terms of living within their means.
Just as the state passed pension reform for its workers in this past fall’s special session, so too must towns and cities deal with their overhanging liabilities in ways that set them on the path to long-term sustainability. And the answer is not to be found in taxing clunkers for more than they are worth. •