Wilson Pushes Cut in Auto Fees

From the showroom floor of a Saturn dealership in Santa Ana, Gov. Pete Wilson on Tuesday touted his proposal to cut the state’s vehicle license fee, which he said will enable more middle-class families to buy new cars.

“People work hard and save to buy a new car only to find out they have to pony up a couple hundred extra dollars they can’t spare,” he said. “That’s not fair.”

Wilson’s proposed 75% cut in vehicle license fees, the largest state-initiated tax cut in California’s history, would save motorists $3.6 billion annually by the time the incremental cuts are fully enacted in 2002.

The fee is an annual levy on all registered vehicles, adjusted according to a depreciation schedule set by state law. Initially fixed at 1.75% of a vehicle’s worth, it was increased to 2% of the value in 1948. Under Wilson’s proposal, it would be cut to 0.5%.

The proposal has sent some cities and counties scrambling in opposition. Most of the car tax money goes to local governments, which spend it on law enforcement, parks, libraries and other services.

Santa Ana, which receives $13 million, or 10% of its budget from vehicle license fees, is sending a delegation to Sacramento today to ask local representatives to reject the measure.

The governor has promised the money will be replaced “dollar for dollar” from the state’s general fund. But some local officials said they are anxious about the pledge in case of a sudden downturn in the state economy.

Some cities, however, support the cut. Garden Grove became the first city in the state Tuesday to support the tax rollback.