Assembly Unit OKs $175-Million Boost in New Vehicle Fees

Under intense lobbying by top ranking Los Angeles County officials, the Assembly Local Government Committee on Tuesday approved a controversial bill that would increase motor vehicle fees statewide to raise an extra $175 million a year for the state’s 58 counties and for 27 small cities.

The measure by Sen. William Campbell (R-Hacienda Heights) was passed by a 7-3 vote and sent to the Ways and Means Committee.

“It’s pure and simple a tax increase,” said Assemblyman Robert C. Frazee (R-Carlsbad), who joined Assemblymen Don Rogers (R-Bakersfield) and William H. Lancaster (R-Covina) in voting against the proposal.

Costs Escalating

But Los Angeles County Supervisor Ed Edelman appealed to the committee to help counties pay for the rising cost of law enforcement, welfare and other services.

“These costs are escalating greater than our revenues,” said Edelman, who was part of a delegation that also included Dist. Atty. Ira Reiner and Supervisor Deane Dana.

Los Angeles County would stand to gain $44 million--the largest single share--from the bill. County officials have said that they could use the additional money to increase employee salaries, boost the number of sheriff’s deputies or maintain reserves.

Campbell’s bill passed the Senate in July by a 27-8 margin, the minimum two-thirds necessary for approval.

If it is approved by the Assembly and signed by Gov. George Deukmejian, the bill would take effect immediately. The governor has not taken a position on the bill, but his Finance Department is opposed to it.

In addition to Los Angeles County, the County Supervisors Assn. of California and the League of California Cities support the bill. It is opposed by the Automobile Club of Southern California and the California Chamber of Commerce.

The registration fees are collected by the state on motor vehicles in lieu of property taxes and some of the revenue is returned to local governments. Until 1983, the fees declined annually as the value of vehicles dropped. But the system was altered in 1983 to help ease the state budget crisis.

Would Extend Fees

Under the revised system, the state now assesses a 2% fee on 85% of the value of the vehicle for the first two years. The fee is reduced in subsequent years as the value of the vehicle declines.

Campbell’s bill would freeze the fees at 85% for the first three years after purchase, not merely the first two years.

The state Chamber of Commerce called the increases “unwarranted.”

“This is particularly true considering that the money which is raised goes to the general operating funds of local governments and not to motoring related purposes,” said Fred Main, the chamber’s tax counsel, in a letter to Campbell.

Moreover, he added, in reference to the 1983 fee change, “the chamber does not believe that it is fair to taxpayers to hit them twice in such a short time.”

But supporters insisted that the Campbell bill is not a tax boost, since the license fee would still be based on 2% of the vehicle’s value.

“We feel that the schedule needs adjustment to be more in line with the real value of the car,” said lobbyist Joe Gonsalves, who represents a number of cities that would stand to gain revenue through the proposal. In an interview, he said that the rate at which the cars are taxed “goes down faster than the value of the automobile.”

Revenues Called Needed

Supporters also argue that the increased revenues are needed by local governments to meet the costs of health, welfare, law enforcement and mental health programs.

The $175 million raised by the change in the fees would be divided in two ways. First, small cities which levy little or no property taxes would receive $27 million. Most of this money would go to small cities in Los Angeles County, such as Carson, Westlake Village, Rolling Hills and Cerritos.

The remaining $148 million would be divided among California’s 58 counties.

Besides the $44 million that would go to Los Angeles County, Orange and San Diego counties each would receive about $11.5 million.

PROPOSED VEHICLE REGISTRATION COSTS A bill under consideration would increase vehicle registration costs to provide additional revenue for counties and cities not currently receiving a substantial amount of income from the property tax. The measure would extend the depreciation schedule for assessing vehicle fees. All figures include a $23 registration fee. Current fees are listed first; proposed fees are in bold type

YEAR OF REGISTRATION MAKE OF CAR PRICE 1985 1986 1988 1990 1986 Dodge $12,700 $239 $239 $163 $99 239 239 201 125 1984 Volvo $15,400 $293 $246 $150 $102 293 293 198 118 1983 Mercury $11,700 $187 $152 $93 $58 222 187 117 81 1983 Ford pickup* $7,900 $182 $158 $118 $95 205 182 134 110 1982 Ford $8,500 $116 $91 $65 $40 142 116 74 48

* Trucks are assessed by weight. These figures include a $48 weight fee. Source: Dept. of Motor Vehicles