The Irony: State officials considering a tripling of vehicle license fees

The Los Angeles Times reports that state legislators are considering a tripling of vehicle license fees as they struggle to solve California's perennial budget shortfalls.

Here's an excerpt from the article by Evan Halper:

"Under the plan, GOP lawmakers -- most of whom have signed anti-tax pledges -- would vote to triple the vehicle license fee that owners pay when they register their cars every year in exchange for a ballot measure that would impose rigid limits on future state spending. Motorists' annual license fees would rise from 0.65% of the value of their vehicles to 2%. For a car or truck valued at $25,000, the increase would be $336.

The higher fees would generate $6 billion annually, helping to fill a budget gap that is projected to reach nearly $28 billion over the next year and a half."

As noted by Halper later in the article, former Gov. Gray Davis support for higher license fees was one of the factors that cost Davis the governorship. Californians kicked Davis out of office in 2003 at a time when the Golden State was mired in rolling blackouts and budget troubles.

That recall election thrust former "Terminator" star Arnold Schwarzenegger into California's top office amid promises to dramatically reform state government and restore fiscal stability to Sacramento.

Schwarzenegger may very well have voter outrage over hiked car fees to thank for the fact that he was elected as governor in the first place. Now, the prospect of significantly hiked vehicle license fees has returned at a time when more and more people are losing their jobs and their homes.

As reported by Halper:
In a meeting with Times reporters and editors last week, the governor said he would not rule out raising the car tax.

"Everything is always on the table," Schwarzenegger said when asked about the prospects for a sharp increase in vehicle license fees. "If I hate something, you can bring it up and you can show to me why that is a good idea, and maybe you know with the new circumstances, there is a good idea that I maybe looked at it in the past and didn't think it was a good idea. This is a crisis situation and one has . . . to look at it in a fresh new way."

And here:

"Some analysts say that in the current economic climate, the plan could be an unwise gamble for Democrats. Voters, they say, may be inclined to approve the kind of spending restraints that GOP lawmakers have long sought. The Republicans' proposed cap would limit growth in government to a modest percentage each year, regardless of how well the economy does and how much revenue flows into the state.

"I suspect the public would vote for it," said GOP political analyst Tony Quinn. "This deal could make a lot of sense from the perspective of Republicans."

"The plan could deal another blow to the automobile industry. It would add hundreds of dollars to the price of most new cars sold in California at a time when sales are plummeting, dealerships are closing and major American automakers are on the verge of bankruptcy.

"But a fee increase has long been supported by Democrats in the Legislature; they say the current rate of 0.65% was never meant to be permanent. They say it is a discounted rate reflecting tax cuts that were supposed to prevail only when the state was flush. Before 1999, the rate paid by Californians was 2%."