Skip to comments.Car tax rebate a tough sell
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.
Speculation: The VLF may be rolled back but not until Oct 1, 2004 to avoid public insurrection and litigation.
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.
Then sign up to circulate a petition for the initiative. Do it now, the deadline is just a few weeks away.
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!
Hold your breathe and die!
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.
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.