Posted on 03/15/2002 5:06:12 PM PST by Ernest_at_the_Beach
SACRAMENTO – Just two years after shaving the state's car tax, some influential Democrats are considering restoring higher vehicle license fees to help plug a potential $17.5 billion budget gap.
"Someone with a Mercedes gets a $400 break. Do they need the $400 or are you better off giving it to education?" asked Senate President Pro Tempore John Burton, D-San Francisco.
But resistance to the idea is building, and not just among conservative Republicans.
Gov. Gray Davis, a Democrat who has been weakened by his handling of an energy crisis and sour economy as he runs for re-election, has said he wants to avoid raising taxes. Chief budget writers for the Democratic majority in both houses of the Legislature also vow to deliver balanced spending plans without raising the fee.
But the state is in deep financial trouble, with a budget shortfall that may be too huge to fill by cutting programs and deferring bills to future years.
Raising the vehicle license fee to its historic level could produce $4 billion.
Once among the nation's highest, California's car tax has been pared by 67 percent over a three-year period. That has saved the average motorist $124 annually.
But the generosity doled out in boom years has come back to pinch lawmakers. As part of the rollback, the Legislature promised cities and counties, which receive most of the car tax, that any lost revenue would be replaced.
The outcome will be greatly influenced by whose budget projections are accurate. In January, Davis estimated the gap was more than $12 billion. More recently, the nonpartisan Legislative Analyst said the shortfall is up to $17.5 billion. More definitive figures will arrive in May.
Sen. Dede Alpert, D-Coronado, said lawmakers could avoid a hike if Davis' figures hold up. But they may have no choice if the gap reaches $17.5 billion, she said.
"You can't do it all with cuts and deferrals," Alpert said.
The car-tax debate also will be shaped by interpretations of an obscure section of the legislation that originally gave motorists relief. The section could trigger an automatic return to higher fees if the state is too broke to keep its commitment to repay cities and counties.
Legislative analyst Elizabeth Hill said clarifying legislation is needed to determine what constitutes a shortage of funds and who makes the call.
Burton said the trigger could restore the higher tax without any need for legislative action.
"You don't have to do anything. It just happens," Burton said.
That interpretation, however, bothers Democrats who don't want to see the vehicle license fee raised.
"We're not planning to mess with the VLF," declared Assemblywoman Jenny Oropeza, D-Long Beach, who chairs the powerful Assembly Budget Committee.
Oropeza has an ally in Sen. Steve Peace, D-El Cajon, who is chairman of the Senate budget panel. Peace said he has no plans to move a car-tax hike out of the committee.
"The votes aren't there," he said.
But that won't stop Assemblywoman Carole Migden from trying. The San Francisco Democrat has introduced AB 1753 to repeal the rollback.
"This rebate is an extra that few depend on. It pales in comparison to the problems we face," Migden said.
Though Democrats hold comfortable majorities in both houses, they need some GOP support to pass tax bills by the required two-thirds majority.
"The Republican caucus has never been more united than it is today" against tax increases, said Sen. Tom McClintock, R-Northridge.
Two years ago California had a budget surplus and a heavy "rainy day" fund. Now they have a $17.5MM budget deficit.
note to Gray Davis: "Lucy! You got some splainin' to do!"
Regards
By what right, by what right do you reach into someone's pocket?
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