California truckers, already reeling from a possible 42 percent hike in weight-based IRP fees, are facing additional increases, this time involving their Vehicle License Fees.
Both fees are covered under the International Registration Plan, an interstate compact that regulates reciprocal registration fees paid by truckers. Some truckers could pay $2,000 more than what they pay now.
According to a letter sent by Ken Reed, chief of the state’s IRP office, the vehicle license fee dropped in 1998 after the General Assembly passed a law that cut the payments made by vehicle owners subject to California registration. However, the same bill, Reed wrote, required the fee to return to its previous, higher level when California’s general fund did not have enough money to pay for the “offset,” or reduction.
California is in the midst of a significant budget crisis, facing a state deficit of up to $38 billion for the year. State officials had not yet been able to reach an agreement on the budget by presstime, despite the fact that it was already overdue. Major cuts are expected in many programs, and the 1998 law, requiring the fees to go up, has been triggered.
Reed’s letter, dated June 23 and sent to Robert Pitcher, president of the International Registration Plan Inc., said the change would be effective Oct. 1, 2003.
The fee is based on a percentage of a truck’s value. On a $100,000 rig, the fee last year would be $650. After Oct. 1, the fee on that hypothetical truck will rise to its former level, roughly $2,000.
Truckers — both those based in California and those who only travel through it — already faced higher fees because of another state action in June.
Anita Gore, a spokeswoman for the California Department of Finance, told Land Line because of a new law in the year 2000, California changed from calculating its weight-based IRP fees based on unladen weight to using laden weight. That action put it in compliance with how most member states in the International Registration Plan operate.
The 2000 bill in California was supposed to be “revenue neutral,” meaning it was supposed to neither add nor subtract from the state’s revenue. But instead, the change left the state highway fund short — some media reports say as much as $160 million short. The Sacramento Bee reported the 2000 bill called for an adjustment in the fee schedule if the new laden weight-based structure didn’t produce the same amount of revenue as the old system.
State officials calculated that an increase of 42 percent would be necessary to make up the difference — the exact amount of fee increase being proposed.
Gore said the proposal, now part of AB1767, came out of a conference committee that was working out differences between the Assembly and Senate versions of the state budget.
The Business Services unit at the Owner-Operator Independent Drivers Association said the basic fee is now $1,700 on the largest tractor-trailers. According to Bill Branch, a spokesman for the California DMV, under AB1767 the 42 percent increase would bring that to $2,420.
If AB1767 passes, then a California trucker who owns a rig valued at $100,000 and who runs 100 percent of his or her miles in the state could face an increase in total state fees of roughly $2,000.
Branch said commercial vehicles in California pay three types of fees to the state: the weight-based IRP fees; the Vehicle License Fee, based on the truck’s purchase price or current value and the registration fee, which is a flat rate. In addition, truckers also pay various fees to California counties.
—by Mark H. Reddig, associate editor
Mark Reddig can be reached at firstname.lastname@example.org.