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Car tax signed by pete wilson { October 1 2003 } Original Source Link: (May no longer be active)
http://www.fresnobee.com/local/story/7526473p-8439900c.htmlRepublicans say the Davis administration illegally increased the fee to raise $4.2 billion to help plug a gaping hole in the state budget. Davis countered that state law passed by the Legislature and signed by his predecessor, Gov. Pete Wilson, in 1998 required the fee to return to 2% of a vehicle's value when the budget was in the red.
http://www.fresnobee.com/local/story/7526473p-8439900c.html
Car tax rise today might sway recall
By Jennifer Oldham
Los Angeles Times
(Published Wednesday, October 1, 2003, 12:25 PM)
With the recall election days away, car-obsessed Californians will be required to pay three times more to license their vehicles, starting today.
The increase will ensure that Californians pay among the highest car taxes in the United States. And that has Pasadena resident Percy Kosoi fuming.
"It's ridiculous," Kosoi said. "If you're going to raise it, raise it a little, but don't triple it."
The higher car tax, which will require him to pay about $445 next March for his new Toyota Camry, has prompted the 77-year-old retiree to consider voting to recall Gov. Davis.
In a state that often is referred to as the car capital of the world, the tax boost is seen by many as an assault on their way of life. Major recall candidates have sought to capitalize on Californians' emotional attachment to their vehicles, plastering "Stop the Car Tax" posters on telephone poles and flooding talk radio with angry curses against the governor.
Anger over the increase in vehicle license fees, which will boost the average annual fee for a passenger car from $73 to $223 and take effect just days before the Oct. 7 recall election, could encourage voters such as Kosoi to flock to the polls.
"This could be the one unforeseen risk for the governor," said Sherry Bebitch Jeffe, a political analyst at the University of Southern California. "This could stall the momentum that appears to be turning" in Davis' favor.
The increase touches most Californians. Unlike gasoline and sales taxes, which residents pay out during the course of a year in smaller amounts, the car tax requires them to write checks, often hefty ones, to the state.
Dealerships across the state have been cashing in on anger against the tax by urging consumers to buy cars before the new tax kicks in today.
Sales jumped by 20% at Galpin Ford, which operates eight dealerships, after the Los Angeles-area company started running anti-tax ads a few weeks ago.
Valley auto dealers report mixed sales with the looming registration increase.
"In the last few days, business has been booming," said Michael Saporetti, Internet sales manager at Valley Ford-Lincoln-Mercury in Hanford.
Saporetti, who averages 20 car sales a month on the Internet and in the showroom, said he sold four cars Monday. His sales were a Lincoln Navigator, F-250 Ford truck, a van and a luxury sedan.
The license fees on a $50,000 Lincoln Navigator are about $400 but will jump to about $1,046 today, he said.
Brett Hedrick, general manager of Hedrick's Hallowell Chevrolet, was surprised when the Clovis dealership didn't get a run on business.
"I expected there to be," he said. He figures many people are probably waiting to see whether a new governor begins an effort to rescind the tax.
Republicans say the Davis administration illegally increased the fee to raise $4.2 billion to help plug a gaping hole in the state budget. Davis countered that state law passed by the Legislature and signed by his predecessor, Gov. Pete Wilson, in 1998 required the fee to return to 2% of a vehicle's value when the budget was in the red.
Four dozen GOP legislators have challenged the increase in court, along with the Howard Jarvis Taxpayers Association. They contend the tax increase is illegal because only a two-thirds vote of the Legislature can raise taxes.
Starting today, California car owners will be required to pay 2% of each of their vehicles' value to the Department of Motor Vehicles when they renew registration. Over the past five years, California motorists have seen their fees decline by two-thirds.
When Wilson approved a bill lowering the car tax five years ago, the state treasury was flush with cash, thanks to the dot.com boom.
Most vehicle owners received rebate checks in the mail and quickly became accustomed to paying lower fees to register about 30.8 million cars, trucks, trailers and motorcycles each year.
But lawmakers and Wilson envisioned a time when the treasury would run dry and the "temporary rebate" would end.
That end came this year, when a $38 billion shortfall threatened cuts in basic government services unless lawmakers found other funds.
Davis' finance chief, Steve Peace, announced in June that the state would restore the car tax to 1998 levels, citing the so-called trigger in the Wilson administration law.
Since then, the DMV has sent 600,000 notices weekly to car owners, alerting them to the higher fees. The vehicle license fee on a new Saturn valued at $11,995 is growing from $122 to $283 a year, on a new $24,995 Ford F-150 pickup from $207 to $543, and on a new $247,995 Aston Martin Vanquish from $1,649 to $5,005, according to an analysis from Galpin Ford.
The car tax is hardly a new issue in California. Since 1935, the state has been collecting the tax on behalf of cities and counties, which rely on it for between 10% and 25% of their revenue.
Davis said he supports reducing the fee as long as it does not mean cuts to local police and fire departments, which are primary beneficiaries of the tax.
Davis included the car tax increase in his revised budget last May after the Legislature rebuffed his January proposal to raise more than $4 billion by increasing taxes on cigarettes and the income of the richest Californians. He said he still favors his original proposal.
Republican recall candidates Arnold Schwarzenegger and Tom McClintock have said they would roll back the tax increase on their first day in office.
Lt. Gov. Cruz Bustamante, however, doesn't want to completely scrap the vehicle license fee, proposing that it be eliminated for cars selling for less than $20,000.
Fresno Bee staff writers Tracy Correa and Sanford Nax contributed to this report.
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