Group challenges rollback of California vehicle license fee

| 1/23/2004

Another challenge to California Gov. Arnold Schwarzenegger's rollback of the vehicle license fee for cars and commercial motor vehicles emerged this week when a group of social activists and college students brought the case to the state's Supreme Court, The Orange County Register reported.

The case contends that the governor did not have the constitutional authority to order the decrease.

The case is the second announced challenge. A group of cities and counties said they were suing the state over the rollback order in December, The Los Angeles Times reported. The group is led by the governments of the city of Los Angeles and Los Angeles County, which between them will lose nearly a quarter of the $4 billion that experts say local governments will lose under the governor's rollback.

The vehicle license fee – for both cars and big rigs – dropped in 1998 after the General Assembly passed a law that cut the payments made by vehicle owners subject to California registration, according to a letter from Ken Reed, chief of the state's IRP office. 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. The higher fee went into effect Oct. 1.

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, 2003, the fee on that hypothetical truck went up to its former level, roughly $2,000. The average car fee increased at that time from $76 a year to $234.

California is in the midst of a significant budget crisis and faces large deficits. That meant the 1998 law, requiring the fees to go up, was triggered.

In November, Schwarzenegger ordered the increase overturned, saying the state was in error in allowing the increase to take place because officials, in determining that the state did not have money to pay for the offset, "did not take into account funds available to the state through borrowing," The San Francisco Chronicle reported.

A spokeswoman for the League of California Cities told The San Jose Mercury News that city and county officials in the state were apprehensive about the order. The fee goes to local governments to pay for such services as police and fire protection, and many cities are already considering measures to make up the lost revenue. The Times reported that local government shortfalls are running roughly $11 million a day.