Schwarzenegger cuts 3.5 billion from local public safety budgets

[Rokenn]

And the people rejoice?

Car-tax rollback leads to disarray
Drivers await refunds as lawmakers grapple with offsetting lost tax dollars

By Steve Geissinger - SACRAMENTO BUREAU

SACRAMENTO -- Gov. Arnold Schwarzenegger fulfilled his No. 1 campaign pledge dur-ing his first week in office, triggering mass confusion among Californians.

Of myriad issues under debate by the new governor and lawmakers, one that mixes two highly emotional matters for Californians -- cars and taxes -- has drawn the most public attention. And the most questions.

In fact, it has generated so much confusion that Schwarzenegger went to extra efforts Friday in a statement and on the Internet to explain himself.

It all began when the new governor, as promised, repealed the car-tax hike, in a state where residents own more than 30 million vehicles.

Former Gov. Gray Davis, who was recalled by voters, had tripled motorists' vehicle license fees. Davis, grappling with the state's huge budget deficit, had used administrative authority to restore the full car tax, which had been lowered in 1999 during better economic times.


Schwarzenegger's executive order Monday lowered the rate from 2 percent of a car's value to .67 percent, saving the average driver $158 a year. The Republican governor's car-tax rollback sounded simple enough. But it's not, according to lawmakers and analysts.

First, there's the question of when vehicle owners can begin paying lower bills. Then there's the issue of rebates totaling more than $10 million for motorists who paid the higher fees during the brief period they were in effect, from Oct. 1 to Nov. 17.

Atop all that, since the flow of car-tax revenue to local governments is being cut back, there's the issue of replacing or "backfilling" more than $3.5 billion in funds to anxious cities and counties, which use the money for public safety and other essential services.

"There is not enough money to send refunds back to the people or to backfill local governments," said Senate leader John Burton, D-San Francisco.

"We could eliminate the mental health programs. We could reduce dramatically (programs for) the aged, blind and disabled. We could do a whole lot of things," he said. "But I don't think so."

Despite the assessment by one of the Legislature's majority leaders, Republican lawmakers are moving ahead with plans for legislation to fund motorist rebates and the local government backfill.

Schwarzenegger and GOP lawmakers figure to integrate the measure into the governor's overall plan to erase the state's multibillion-dollar budget deficit with spending cuts and loans.

But the pressing question on the minds of many California motorists who face vehicle license renewals has centered on when they can begin paying the lower bills.

"Immediately," despite what their bills say, Schwarzenegger told the state Department of Motor Vehicles.

"I have made sure the DMV implements the car-tax cut in days, not months," he said. "The people of California deserve to know the correct tax amount and how much they've saved right away."

As a result, the DMV has posted instructions on its Web page for motorists who have not already paid pending registration renewals.

Vehicle owners "may calculate their lower fees by taking the VLF (vehicle license fee) line from the billing notice, multiply it by .675 and subtract that amount from the total fees due," the DMV says.

The bills include a flat $30 registration charge and other assessments that must be paid, without being reduced.

Likewise, new car buyers can pay the lower vehicle license fee immediately, which may help bolster new car sales that dropped after the tax rose.

DMV's instructions, which are available at www.dmv.ca.gov, include on online calculator. There's a link to the Web site from the governor's page at www.governor.ca.gov

The DMV says the instructions are especially important since its antiquated computers will keep generating the higher, inaccurate fees through mid-December.

But it cautions that the reduced registration amount can only be accepted from those paying by mail. Those who pay online or at field offices will still be charged the higher rate.

Motorists who don't pay by mail and those who paid the higher fees between Oct. 1, when they went into effect, and Monday, when Schwarzenegger rolled them back, must await refunds.

And questions about rebates aren't so easily answered -- though the Schwarzenegger administration insists there will be refunds.

The DMV Web site flatly declares, "Customers who have paid the full amount will automatically receive a refund by mail beginning in early 2004."

But the Legislature's independent, nonpartisan fiscal analyst, Elizabeth Hill, said funding for rebates will have to be appropriated by lawmakers.

So far, the Democrats who dominate the Legislature appear unlikely to approve the funds, preferring an overall policy of addressing the state's deficit woes with tax hikes to blunt further, painful spending cuts.

The hitch in Schwarzenegger's vow to reduce the car tax puts millions of motorists -- and their pocketbooks -- directly in the middle of what's likely to be an ongoing series of partisan clashes between the governor and lawmakers.

Legal issues, however, pose a wild card in the debate.

Now that rates have been rolled back, vehicle owners who paid the higher fees 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 bills happened to come due at a different time.

Contact Sacramento Bureau Chief Steve Geissinger at sgeissinger@angnewspapers.com .

[Timber Loftis]

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

Weak argument in attacking the clerical difficulties always inherent in changing a law.

Arnie has a tough job to turn Cal-E-forn-E-ah around, and he only made it tougher with the car tax cut. However, a campaign promise is a promise, and the car tax rates there are STOOPID ridiculous, espcecially for a state that offers no alternative transportation (mention BART and I'll laugh out loud).

Do what Reagan did when he cut taxes -- turn all the crazies out on the streets and shut down the mental hospitals. It's warm there year-round anyway. [img]graemlins/heee.gif[/img]

[khazadman]

One way to free up some much needed revenue would be to cut off all aid to illegals. Then go after arts funding and other boondogles like it.

[wellard]

[quote]Originally posted by Timber Loftis:

Do what Reagan did when he cut taxes -- turn all the crazies out on the streets and shut down the mental hospitals. It's warm there year-round anyway. [img]graemlins/heee.gif[/img]

Aint Venice beach already a litle crowded? [img]graemlins/hidesbehindsofa.gif[/img]