Bill to Hike Auto Fees to Aid Counties Gains

California motorists would be required to pay as much as $193 million a year in higher vehicle license fees under an urgency bill narrowly approved by the Senate on Monday.

Supporters described the bill as a compromise aimed at helping financially hard-pressed cities and counties, while critics assailed it as a tax increase.

Los Angeles County government would receive the biggest share of the money--$44 million a year--if the bill by Sen. William Campbell (R-Hacienda Heights) wins passage in the Assembly and is signed by Gov. George Deukmejian.

The bill cleared the Senate on a 27-8 margin, getting the minimum two-thirds necessary for approval. As an urgency measure, the proposal would take effect immediately upon the governor’s signature.

Deukmejian has taken no position on the bill, his office said. However, the state Department of Finance, an unofficial arm of the governor’s office, opposes it.

Of the $44 million that Los Angeles County would receive, $17 million would be distributed to 42 cities that levy little or no property taxes. They include such cities as Carson, Cerritos and Rolling Hills.

Such cities have been caught in a fiscal bind since passage in 1978 of tax-cutting Proposition 13, which made it difficult for them to impose new taxes. As a result, many of the cities maintain that they have experienced growth but have not had the new revenue necessary to pay for services.

The increased vehicle fees would provide an assured source of revenue to finance police, fire, and street maintenance, among other services.

The Senate action capped weeks of lobbying on the bill since an earlier version that merely bailed out the cities was defeated.

After the defeat, lobbyists for the cities and counties fashioned a compromise. It tied the money for the small cities in Los Angeles County and four other counties to increasing state vehicle license fees, a portion of which goes to the state’s 58 counties.

“The counties are in dire straits. They need additional revenue,” contended Campbell during a brief Senate debate.

However, Sen. Jim Ellis (R-San Diego) asked if Campbell had questioned “the people out there yet (to see) if they are in favor of having their taxes increased.”

He charged that “the idea of imposing a substantial tax increase on the people out there in a rather quick and hurried way . . . is not fair.”

Ellis said the motor vehicle fees are designed to be used for the maintenance and construction of highways, not to help bail out cities and counties.

“What you’re doing here is further diverting away the funds that are supposed to be used for one purpose and diverting them to another,” Ellis said.

Under the bill, the small cities in Los Angeles, Ventura, Riverside, San Bernardino and Contra Costa counties would obtain a minimum of $300,000 a year and a maximum of $1 million a year in property taxes that have gone to the counties.

Meantime, the state’s 58 counties would stand to gain anywhere between $160 million and $193 million in increased license fees. Such fees are collected on motor vehicles in lieu of local property taxes.

In setting vehicle registration fees, the state now reduces the value of vehicles annually. For the first two years, the state assesses a 2% fee on 85% of the value of the vehicle, then the value is reduced and the fee drops.

Under the Campbell bill, the state would raise additional money by levying the 2% fee on 85% of the value for three years instead of two years. Then the value would be reduced and the fee would drop.

Campbell argued that the proposed formula for setting the vehicle fees would more accurately reflect the value of cars, trucks and motorcycles.

James C. Hankla, Los Angeles County chief administrative officer, headed a large contingent of county officials who lobbied for the bill Monday. He said the county could use the additional funds to possibly increase employee salaries or to maintain “prudent reserves.”

Hankla downplayed the effect of the bill on motorists “unless they have a Rolls-Royce.”