Retired commercial real estate broker Harry Makaloff is a walking model of a contemporary statist, The 70-year-old devotes his time and energy to chasing cars with nonresident license plates with New York State residents off the streets; in an effort to stymie the flight of tax dollars out of New York State.
This story was originally reported in Crain’s New York.
His crusade originated when he was looking for a parking spot on the Upper West side and was cut off by a resident with a Utah license plate.
State law requires new residents to register their vehicle in New York State within 30 days of arrival. Many do not bother to do so and avert payment of the accompanying tax while taking advantage of the city’s parking real estate, taking up space on the road without paying so much as a dime for the privilege.
According to Crain's, these out of staters cheat the state and the city of millions of dollars in revenue. The staggering statistic noted mentions that 25 % of the cars driven by the New York States belonging to local residents have out of state license plates. If we were to account for the revenue loss based solely on the cost of parking tickets, the figure would be a whopping $73 million.
A Senate report released in 2011 noted that 25% of all accidents involving Pennsylvania license plates occurred in Brooklyn, suggesting that Brooklyn residents may be registering their vehicles in Pennsylvania in order to save money.
According to the same report, resident drivers with non-resident vehicles deprive the state of $1 million annually in fees for license plates, titles and vehicle registrations.
Loss of sales tax revenue for the state amounts to $93 million as a result of non-resident drivers if we were simply to take into account the 25% figure of non-resident drivers in Brooklyn involved in accidents alone. Each purchase of a new car, according to Kelley’s blue book, racks in $3,000 worth of sales tax.
The rampant tax evasion is due to exponentially higher insurance rates within New York State. New York has the third highest rate of insurance coverage in the nation, at the rate of $1,182 annually. The Brooklynites that totaled their cars in accidents would be paying 30% less in Pennsylvania then they would within the state. The State Department of Financial Services has estimated that non-resident license plates cost New York based insurance companies $19 million in unpaid premiums. Nevertheless, the law that non-residents that have moved are required to register their cars within the allotted 30-day time frame remains poorly enforced.
By: Kathleen McGee