By DONNA KENNY KIRWAN
Calling it the “fiscally responsible” thing to do, a 5 to 4 majority of the City Council voted Tuesday to give first passage to a budget amendment that will decrease the exemption on automobile taxes from $6,000 to $3,400, thereby providing the city with $3.1 million in auto tax revenue.
Because the car tax exemption is part of an ordinance to the city’s operating budget, second passage is required. The City Council will hold a public hearing on the $3,400 exemption and vote on the matter again at the Aug. 11 City Council meeting.
The move, however, still leaves a shortfall of almost $5.8 million in revenue that the city has to come up with to make up the $9.7 million in state auto reimbursement aid that was eliminated.
City officials have said that if no further actions are taken to either increase revenue or reduce costs, this shortfall would require 331 lay-offs of municipal employees.
The total budget shortfall for the city, including the School Department budget, is currently estimated to be at around $15.5 million
The vote by the Council came on the heels of an earlier motion to leave the auto tax exemption at the current rate of $6,000. Supporters, including Council President Henry Kinch Jr. and Councilors Jean Philippe Barros, Albert Vitali Jr. and Thomas Hodge, maintained that enough savings cuts and union concessions could be made throughout the year to make up for the $9.7 million loss in state auto reimbursement revenue. This motion failed by a 4 to 5 vote.
A subsequent motion by Hodge to lower the exemption to $5,000 failed for lack of being seconded.
In a Finance Committee meeting held prior to the vote, Kinch had unveiled what he called his “blueprint” to address the budget shortfall through a combination of savings measures, revenue boosters and union concessions. He urged his fellow councilors to leave the car tax exemption at the current rate of $6,000, and said his plan would allow for the $9.7 million in lost revenue to be made up through the remaining 11 months of the fiscal year.
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