What is the money for car tags for then?
There is also an excise tax on tires for road maintenance.
Originally, [in the early days of the Model-T] those tags were supposed to be a 'one time' deal, to ensure the state would have a registry for recovering & returning stolen vehicles to their rightful owner...and later to know to whom to send the police for accidents & violations.
Then, it became an annual revenue generating scheme, to finance the DMV to perpetually collect the fees, with any excess going to management raises.