California Democrats trying to roll back vehicle fee increase

| Wednesday, August 13, 2003

California truckers who were faced with significant increases in the vehicle license fees later this year may get some relief from California’s current political turmoil.

The Los Angeles Times reported Aug. 12 that Democrats were floating a plan that would roll back an automatic increase in the fees now set for October.

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.

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 have not yet been able to reach an agreement on the budget, despite the fact that it was due eight days ago. 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. Even out-of-state truckers will pay a percentage of the fee, based on the percentage of their total miles that they run in California.

The Vehicle License Fee increase, which also applies to passenger cars, has been very unpopular in the state, The Times reported, and the Democratic plan would replace the lost revenue with more politically palatable taxes, such as cigarette taxes and increase income taxes on wealthy citizens. Republicans are criticizing the Democrats’ plan to repeal the increase as a ploy to boost Gov. Gray Davis, who is currently facing a GOP-backed recall effort.

Truckers – both those based in California and those who only travel through it – already faced higher fees because of another state action in June. State officials at that time proposed a bill that would increase the IRP weight-based fees by 42 percent.

Anita Gore, a spokeswoman for the 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 International Registration Plan is an interstate compact that regulates reciprocal registration fees paid by truckers.

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 that 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 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 Assembly Bill 1767, came out of a conference committee that was working out differences between the Assembly and Senate version 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.

The bill has already passed the Assembly and is awaiting a final vote before the Senate.

--by Mark H. Reddig, associate editor

Mark Reddig can be reached at mreddig@landlinemag.com.

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