Car Rental Surcharge Receipts Show Drop

December 4, 2013
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Quarterly payments to the City for the all-important car rental surcharge have sagged tremendously during the first quarter of the fiscal year – leading some to believe that the biggest rental company in the city, Thrifty, is no longer paying into the fund.

Questions have circulated endlessly within local government over the last few months as to whether the top-payer into the surcharge account was still paying despite having moved its operations to Logan Airport via a mandate from the U.S. Environmental Protection Agency (EPA).

Under special legislation drafted several years ago, any motor vehicle rented in Revere is subject to a $10 surcharge. That money is collected by the state Department of Revenue (DOR) and delivered to the City quarterly. It is a lynchpin in the City’s ability to pay for the bonded debt incurred from building the new Public Safety Facility that was completed in 2007. The surcharge ends when the debt is paid off, but the debt is still far from being paid off and the revenue is still extremely valuable.

However, it appears as if a major hit to that revenue stream is just now surfacing due to the move to Logan.

DOR collections for the first quarter of the fiscal year show that revenues are down by nearly half.

During the first quarter of last year, collections for the surcharge were $391,500. The most recent quarter reported collections of $183,099 – a loss of $208,401 from last year in one quarter.

The first quarter of the year is usually the largest of the four quarters due to the fact that it comes during the busy summer months.

Collections year to date are only $350,949 according to DOR numbers, as opposed to $588,513 at this time last year. That’s a difference of $237,564 so far this fiscal year (some collections from the previous fiscal year were reported in July).

Thrifty was ordered by the EPA to move onto Logan Airport property a few years ago into the Consolidated Rental Car Facility as part of a nationwide effort to reduce the carbon footprint of airport buses. That news drew major doubts about the financing of the Public Safety Facility going forward as Thrifty was the largest contributor to the surcharge fund. This past September, the rental car facility opened at Logan and Thrifty did move its operations there.

However, administration officials and some city councillors indicated that Revere would still retain the surcharge monies from Thrifty as it had agreed to keep its vehicles registered at the property in Revere on Lee Burbank Highway – which now serves mostly as a Park & Ride for the airport.

Director of Finance George Anzuoni said this week that it is still uncertain as to whether the Thrifty monies from the surcharge have been lost. He said the City is waiting for more numbers to come from DOR to determine if there has been a more substantial loss over more than one quarter.

He has said repeatedly in the past that any loss of Thrifty monies would be devastating not only for the surcharge, but also for the excise tax payments on the rental vehicles.

Total collections for fiscal year 2012 were $696,870 and total collections for fiscal year 2013 were $789,943.

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