Car fee boost collides with Davis' drive to keep his job

SF Chronicle ^ | 7/27/03 | Mark Martin

[randita]

Car fee boost collides with Davis' drive to keep his job

Mark Martin, Chronicle Sacramento Bureau

Sunday, July 27, 2003

URL: http://sfchronicle.com/cgi-bin/article.cgi?f=/c/a/2003/07/27/MN291768.DTL

Sacramento -- An incumbent's nightmare will begin arriving in millions of Californians' mailboxes just as Gov. Gray Davis launches an unprecedented fight for his political life.

Notices of higher vehicle registration fees, which the Davis administration recently tripled as a way to help plug the state's budget deficit, will hit the mail starting Friday for cars with registrations that expire in October.

The increase will cost the average California car owner $158 per vehicle.

"It's the most expensive piece of direct mail Californians have ever received during a campaign," quipped H.D. Palmer, a spokesman for Republicans in the state Senate.

Already, Davis allies have begun discussing possible ways to soften the blow, even eliminate the increase for many motorists. But the new fee -- always referred to as the "car tax" by Davis opponents -- is still likely to be a huge political liability throughout the campaign.

Republicans are hammering Davis daily about the fee hike, mentioned dozens of times at a rally Saturday in Sacramento held by recall proponents.

Sen. Tom McClintock, R-Thousand Oaks (Ventura County), who is likely to run for governor on the recall ballot, promised he would repeal the increase "within five minutes of taking office."

The increased fee is expected to generate more than $4 billion in new revenue toward the state's projected $38 billion hole. But sources told The Chronicle on Saturday that some lawmakers have discussed a new proposal to eliminate the added car fees while making up the revenue loss by raising other taxes.

Under one plan, cars valued at less than $15,000 would be made exempt from the new fee, while income taxes would be raised on the wealthy. Other tax increases, on everything from alcohol to cigarettes, are also being discussed.

Some have suggested Democrats could cut the car fees and raise other taxes by a like amount without obtaining the two-thirds vote of the Legislature that is required for new taxes. That's because the move would be presented as revenue-neutral, and thus subject to simple majority vote.

Democrats are a majority in both houses of the Legislature, but they need a handful of Republicans to reach the two-thirds threshold.

The idea of tinkering with car fees is not a part of the budget the Senate is expected to vote on tonight, however, and a spokeswoman for Assembly Speaker Herb Wesson, D-Los Angeles, said the idea has not been given serious thought by leaders in the Assembly.

The vehicle license fee has been a political hot potato all year.

The fee was lowered five years ago by Republican Gov. Pete Wilson, and a heated legislative debate erupted this year as Democrats urged Davis to raise it to help with the deficit. Republicans have argued that the fee hike should also be approved by a two-thirds vote of the Legislature and have sued over the issue.

In June, Davis raised the fee without a vote -- earning the derisive nickname "the immaculate taxation."

Davis and Democrats argue that the 1998 law that reduced the fees contained a provision to increase them if the state fell on sour economic times.

"It's in the law that Wilson passed," said Steve Maviglio, Davis' press secretary.

State law requires the Department of Motor Vehicles to give car owners 60 days' notice before registration fees are due, so notices will begin to hit the mail Friday for those who have to renew by Oct. 1.

The recall election is set for Oct. 7, which puts Davis in the unenviable position of having to run a campaign all fall as potential voters are getting the bad news in the mail.

The fees are based on a percentage of the value of the vehicle, so the increase motorists will pay will vary. For example, for a 2003 Ford Explorer XLS sold for $28,050, the vehicle license fee would go from $182 to $561. For a 1999 Honda Civic EX purchased used this year for $7,950, the fee would go from $52 to $159.

The fee will undoubtedly be a centerpiece of several campaigns.

At the pro-recall rally outside the state Capitol Saturday, the car tax was public enemy No. 1 for the more than 1,000 people who showed up to jeer any mention of Davis.

It's a fee that has sunk governors before.

In 1979, Bill Clinton, then governor of Arkansas, raised the fees his residents paid to register cars by between $6 and $10. Clinton lost his re- election bid in 1980 to an opponent who ran on a slogan that mentioned the fee hike.

Clinton later won the job back in part by apologizing to Arkansas residents for upping the fee.

Chronicle staff writers Robert Salladay and John Wildermuth contributed to this report. / E-mail Mark Martin at markmartin@sfchronicle.com

©2003 San Francisco Chronicle | Feedback

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[randita]

All you Californians who've been looking for a good price on a late model used car are in luck. After people get this fee increase, I'll bet the market is going to be flooded with cars people now think they can do without.

[randita]

ping

[Eric in the Ozarks]

This is higher than Minnesota before Minn lowered their rates for new tags. Breathtaking !

[goldstategop]

The Senate Republicans helped to pass a budget that keeps spending intact and relies on the illegal car tax and massive borrowing to finance it. Oy vey! This is not a conservative budget by ANY stretch of the imagination. Its a time bomb waiting to explode again next year in a bigger deficit. Tom McClintock, who voted against it warned of the consequences. After all we've been through, our state's bipartisan political establishment still doesn't get what needs to be done.

[PistolPaknMama]

$158? Is that a 1-5-8 in dollars or yen?

[Fraulein]

...for a 2003 Ford Explorer XLS sold for $28,050, the vehicle license fee would go from $182 to $561

!!!

[Publius6961]

But the new fee -- always referred to as the "car tax" by Davis opponents -- is still likely to be a huge political liability throughout the campaign.

And what do the Davis supporters call it?
When is a tax not a tax?

When it is invented to circumvent citizens' initiatives?
When revenues are used to fund all kinds of absurdities and essential services are left unfunded?
Hmmmmmmm.

[goldstategop]

This tax would never have passed the Legislature. It would have been a career ending move. I'd love to see politicians explain to their constituents they just tripled the car registration fee they owe DMV every year. At least Davis will pay the price and the timing couldn't be more fortuitous for a nicer guy.

[Fraulein]

And what do the Davis supporters call it?

The writer keeps calling it a "car fee."

For example:

The idea of tinkering with car fees is not a part...

The car fee was lowered five years ago by Republican Gov...

Davis raised the fee without a vote...

[Grut]

When is a tax not a tax?

When it's an 'investment in fairness', of course.

[WestPacSailor]

Raising the car tax in California? What is this man thinking? If that alone doesn't kill his desperate bid to save his job than NOTHING can. The recall supports couldn't have asked for a better gift: Increase on car tax right before the recall vote...it's like somebody handed them the governors seat.

[Former Proud Canadian]

"...for a 2003 Ford Explorer XLS sold for $28,050, the vehicle license fee would go from $182 to $561."

I guess they don't want people to buy these cars.

[OldFriend]

No one is mentioning the fees put on SUVs.........

Just the car issues alone will be enough to remove Davis from office.

[goldstategop]

Never call it a tax. With semantics liberals think they're being clever. Hahahaha

[goldstategop]

It got Clinton booted out office in 1980 and he raised the Arkansas car tax a trifling $4. Harrrumph.

[OldFriend]

Weird too how the dems keep calling this a right wing extremist coup..........as if all those democrats who signed the recall petitions don't exist!

Might be good publicity for those outside the state but it just isnt' working in California.

[sushiman]

>158? Is that a 1-5-8 in dollars or yen?

The Japanese have Californy beat bigtime . Annual inspection fee ( a joke ) starts at around $ 1000 . The newer the car the more expensive the car the higer it goes . Then there is outrageous reg. fees ...and other taxes ...Huge bucks to use the highways ( $ 200 to Tokyo from where I am ...about the same as a one way plane ticket ) ... Gasoline 2/3 times higher than U.S...and on it goes .

[ex-Texan]

I was considering helping California motor vehicle owners register their cars in Oregon by setting up a web site and offering to sell stock shares in vacation property as a way to get by local DMV rules. However, my research showed that a person must elect to change their domicile to Oregon -- not merely own a residence or vacation property in this state. Then there is the problem with obtaining an Oregon driver license and insurance. Of course, people might buy a car here and property here and keep the auto in Oregon as a second car. Oh, well . . .

Such a pity. Looks like the only way to lower license fees for Cailfornicated car owners is to oust Gray-Out-Davis!

[TankerKC]

Help me out here. I was home in June. An acquaintance told me that the car fees were temporarily lowered during the economic boon. Part of the temporary lowering was the understanding that they would be raised back if needed. I haven’t had CA tags since 1990, but it seems to me that they were around $400 at the time.

Can anyone clarify?

[ex-Texan]

Dems always lie about taxes and state fees. Californicated is the worst place to live. Be sure to move before you retire or they will try to attach your retirement income.
They lost a BIG case a few years back (I had someting to with the case being filed). But California's Franchise Tax Board choses to ignore that legal precident and still will bluff former residents with legal action.