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Car tax rebate a tough sell
Oakland Tribune ^ | Steve Geissinge

Posted on 11/15/2003 6:08:22 PM PST by nickcarraway

Revelation a wrinkle in Schwarzenegger's plan to repeal licensing fee hike

SACRAMENTO -- Though part of Republican Gov.-elect Arnold Schwarzenegger's No. 1 campaign promise, millions of California motorists paying tripled car-tax bills since Oct. 1 won't get rebates -- unless a Democrat-dominated Legislature agrees to them.

The first official disclosure of the little-known hitch in Schwar-zenegger's vow to roll back vehicle license fees came in an interview Friday with the Legis-lature's independent, nonpartisan fiscal analyst.

The assessment by Legislative Analyst Elizabeth Hill puts motorists -- and their pocketbooks -- directly in the middle of what's likely to be an imme- diate series of partisan clashes between Schwarzenegger and lawmakers.

The actor-turned-politician is scheduled to take office Monday, replacing Democratic Gov. Gray Davis, who was recalled by voters angered in general by California's fiscal woes and specifically by Davis' car-tax hike.

At Schwarzenegger's request, legislators are set to return to work Tuesday to address the state deficit and other problems.

Topping the agenda is Schwarzenegger's vow to repeal the tripling of the vehicle license fee.

He plans to administratively roll back the unpopular tax on his first day in office and provide rebates to vehicle owners who have been paying the higher amounts since Oct. 1, then somehow replace the lost revenue that goes to local governments.

"We're advised that, under the law, it (the rollback and rebates) will be retroactive to Oct. 1," said Schwarzenegger spokesman H.D. Palmer.

But the legislative analyst said the new GOP governor -- who is opposed to tax hikes -- will have to persuade the Democrat-controlled Legislature to allocate hundreds of millions, or billions, of dollars in replacement funds for cities and counties and to cover rebates to motorists during the current fiscal year.

"I do not believe he could do it (rebates) administratively," Hill said. "I believe that would have to be part of legislation."

Clouding Schwarzenegger's rebate plan is the fact the Senate and Assembly are dominated by Democrats who want some kind of tax hikes to blunt further spending cuts. Hill and others have warned lawmakers against more borrowing by Schwarzenegger to close the state's multibillion-dollar fiscal gap.

Legislative leaders aren't saying yet what they intend to do on the issue.

The cost of replacing local government funds and making rebates would total about $3.2 billion in the current 2003-04 fiscal year, the legislative analyst said.

More than 8 million vehicle owners have received bills at the higher rates and at least 3 million have already paid them, according to the Department of Motor Vehicles. The state has received nearly $500 million in car-tax revenue since Oct. 1, though some of that includes motorists paying their bills late under the old rates.

While the political saga unfolds and the DMV deals with the administrative task of rolling back the rates, millions more of the state's motorists will get the higher bills while millions of others await an uncertain rebate. Californians own more than 30 million vehicles.

DMV officials have advised vehicle owners to pay their higher bills on time and wait for the refund, since the late fees are so high that they nearly outweigh the benefits of the refunds.

The complex matter is also filled with potential legal landmines.

If rates are rolled back, vehicle owners who paid the higher rates must receive rebates, according to legal experts.

Under the state constitution's "equal protection" clause, one group of taxpayers can't be subjected to a higher rate than counterparts whose bill happened to come due at a different time.

TOPICS: Business/Economy; Constitution/Conservatism; Culture/Society; Front Page News; Government; Miscellaneous; News/Current Events; Politics/Elections; US: California
KEYWORDS: california; cartax; catrans; schwarzenegger; taxes

1 posted on 11/15/2003 6:08:22 PM PST by nickcarraway
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To: Canticle_of_Deborah; NormsRevenge; DoctorZIn; ElkGroveDan; Ernest_at_the_Beach
2 posted on 11/15/2003 6:09:26 PM PST by nickcarraway (
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To: nickcarraway
Thanks for the info. I have already paid two registration fees which were tripled from last year. The one waiting for me to pay is the one for hubby's motorcycle (which he only rides maybe a dozen times a year). The fee is now $348. I hope every idiot in Sacramento who voted for this outrageous tripling of registration fees gets thrown out on his or her ass just like Gray Davis did.
3 posted on 11/15/2003 6:22:42 PM PST by janetgreen
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To: nickcarraway
Translation: The executive rollup in the VLF may well be rolled back admistratively but those who paid the increase will never get their money back.

Speculation: The VLF may be rolled back but not until Oct 1, 2004 to avoid public insurrection and litigation.

4 posted on 11/15/2003 7:12:32 PM PST by Amerigomag
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To: nickcarraway
If the legislature really wants to drive conservatives to the polls and sweep every conservative candidate and initiative along with them they only need to turn their backs on this issue.

We will do the work for them. The car tax initiative is rolling toward qualifying for a place on the ballot a year from now.

It will ban the car tax altogether; it will assure funding to local governments which have depended on this tax for revenue (except when Davis took it from them); and it will end the practice of calling taxes, "fees", just to avoid the required 2/3 majority to pass increases.

Help yourself when it comes time to claim a refund. Go to Stop the Car and follow the Instructions for Requesting a DMV Refund.

Then sign up to circulate a petition for the initiative. Do it now, the deadline is just a few weeks away.

5 posted on 11/15/2003 7:19:23 PM PST by concentric circles
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To: nickcarraway
Why should taxes collected by the state be sent to municipalities anyway? Cut em off. If they can convince their citizens they actually need the funds for other reasons than to fund continued waste, let them put it on a local ballot. The local govts. shouldn't be getting federal or state money anyway, as it just means more paperwork and no doubt comes with string attached as well, just to get back money citizens of their town sent the state. Further, if the state (or the feds, for that matter) doesn't need the money for projects in the state jurisdiction, what right do they have to collect it anyway? This kind of Peter taxes, then sends the funds to Paul, scheme pushes taxes higher, as the taxes are imposed without a vote of the people, and once the money is gone, who wouldn't want to get some of it back.
6 posted on 11/15/2003 8:14:11 PM PST by Still Thinking
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To: nickcarraway
A) Arnold will fail in this avenue, but we knew that.

B) The car tax initiative will make it on to the ballot with the efforts of McClintock and company.
7 posted on 11/15/2003 8:33:15 PM PST by Canticle_of_Deborah
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To: nickcarraway
This post has been added to the… California In Transition- Must read Threads!

Want on our daily or major news ping lists? Freepmail DoctorZin

8 posted on 11/16/2003 8:46:30 AM PST by DoctorZIn
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To: concentric circles
Thanks for these links. To date I can't tell you how many times I and others have requested these Petitions and so far...nothing. This is the first time I haven't been LED to McClintock's website to do it and nothing. It appears to have been a Mcclintock ploy to get money for his campaign for Governor.
Hopefully, I will receive the Petitions. Have handed out hunreds of Illegal Petitions and they have all been returned by friends and could be doing the same with these but NOBODY has any to even copy. What's the scoop here? Will be on a bus trip with 60 ladies to the Reagan Library on Thursday and would just love to have PEPITIONS to get signed...HELP.
9 posted on 11/16/2003 8:59:18 AM PST by TatieBug
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To: Still Thinking
The money is personal property tax and is a revenue that belongs to the cities and counties. For many counties, it comprises about a quarter of their general fund revenue. That is what is used to pay for basic services - police, fire, D.A., assessor, auditor, county clerk etc.

When the state was flush with surplus, it gave a discount to the tax payors on the counties and cities' car tax and then backfilled the cities and counties for their lost revenue. Now the state is not flush, so it can no longer offer the discount and backfill the counties and cities.

To continue with the discount and not backfill the counties and cities is to rob them of their revenue stream. With Prop. 13, there is not a lot of that coming in.

With just the lag in backfill rvenue from July to October, our little rural county had to cut almost a million dollars from its sheriff's department budget. This was a significant amount. Other departments had already cut 15% from their budget.
10 posted on 11/16/2003 12:18:37 PM PST by marsh2
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To: TatieBug
... the scoop...

While I don't doubt that a fund raising list will come from this, it is no ploy. I think it woud be fair to say that this effort is sparsely funded, relying largely on volunteer help, so the response is slow at best.

On Thursday, have your bus swing by the Airtel Hotel in Van Nuys at 7277 Valjean Ave. It's at the Van Nuys Airport near Sherman Way and Woodley. Between 3:00 and 7:00 PM there will be a petition signing event hosted by John and Ken, radio broadcasters from KFI-am640.

You can sign in the parking lot and you can pick up petitions though I don't know whether you'll be able to get the blanks in the parking lot, you might need to go inside.

It's really not far from the 118, you know, the Ronald Reagan Freeway. I urge you to talk to your group. This would be a great way to cap the day. Go get 'em!

11 posted on 11/16/2003 5:14:24 PM PST by concentric circles
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To: nickcarraway
-- unless a Democrat-dominated Legislature agrees to them.

Hold your breathe and die!

12 posted on 11/16/2003 5:19:53 PM PST by EGPWS
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To: nickcarraway
Arnold should remember "Read My Lips, no new taxes". If he allows the Democrats talk him into keeping this tax, his governorship will end before it begins.

The Democrats will be the first to accuse him of lying and use it against him in the next election.

Just for the record, anyone thinks that the way out of California's problem is more taxes does not understand the problem. The solution is cut taxes, cut regulation, cut spending, cut state employees.

13 posted on 11/16/2003 5:54:36 PM PST by CIB-173RDABN
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Absolutely. Can anyone else see McClintock beating Arnold in the Republican primary in 2006 if he ends up signing new taxes into law?

McClintock actually has real conservative credentials. I can't wait till he's elected to a higher office (maybe governor or Senate in the coming years, I wish he had chosen to knock of Botox Boxer in '06).

14 posted on 11/16/2003 11:40:40 PM PST by TOTAL RECALL (A tiger's a tiger, a bear's a bear, and a Chinese Communist is a Chinese Communist!)
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To: marsh2
If I understand your post, you're saying that this is essentially a local tax which has in the past been collected and disbursed by the state. If that's true, the municipalities should be collecting their own taxes in the first place, rather than giving the state the opportunity to play shell games with what is essentially local money.

Every set of hands the money goes through has to get a cut, plus there's always the temptation to use the funds for something unrelated to the original statutory authority that underlies the tax.

If it's your contention that this tax has always been at the tripled level, and the state has been paying some portion of it, that's bad because it led to a misapprehension among the taxpayers. The citizens have a right know what taxes they're paying and to whom. We wouldn't be in this mess now if the state hadn't done that. If they had a surplus, they should have lowered income tax rates, not paid part of my car tax on my behalf. Maybe I don't have a car. Maybe I would like to spend that money on something else. It's not for them to decide.

15 posted on 11/17/2003 11:20:25 AM PST by Still Thinking
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To: nickcarraway
Arnold is gov - all is well in CA - everyone knows this, but the elite media won't report it.
16 posted on 11/17/2003 11:29:06 AM PST by familyofman
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