A coalition of legislative and law enforcement leaders issued dire warnings in Los Angeles on Monday that unless the state raises vehicle license fees, cities and counties will be forced to cut more than $4 billion from public safety and social service budgets by the end of 2004.
Assembly Speaker Herb Wesson (D-Culver City) said he will introduce legislation today to restore the fees to 1998 levels, raising the average current fee by $103 a year.
Los Angeles Mayor James K. Hahn, City Council President Alex Padilla, San Francisco Mayor Willie L. Brown Jr., Los Angeles County Sheriff Lee Baca and a number of uniformed police officers and firefighters, including LAPD Assistant Chief Jim McDonnell and Los Angeles Fire Chief William R. Bamattre, expressed support for the move. They spoke at a news conference at the Los Angeles Police Academy near Los Angeles International Airport.
They said it would help cities and counties already faced with major service cuts related to the state's budget crisis.
"This is a nuclear budget problem," Baca said. He said he will be forced to lay off 500 deputies if the fees are not raised.
Wesson said state officials estimate that cities and counties might be forced to lay off as many as 12,000 police officers and sheriffs' deputies and as many as 15,000 firefighters, unless the fees are returned to the 1998 levels.
Hahn already has declared a hiring freeze, except for police, fire and sanitation services. But he said that if the fees are not increased,Los Angeles would lose $245 million over the next two years, and the city would be unable to hire 200 badly needed new police officers at a time when the murder rate is rising.
Brown said San Francisco, which is a combined city and county, would lose $107 million over the next two years.
Los Angeles County officials said last week that the county stands to lose $191 million this year and $472 million next year.
Cities and counties are free to use the funds for any purpose, and most use a substantial chunk of the money for law enforcement. The fees currently provide 30% of Los Angeles County's discretionary revenue.
In some places, particularly areas with low property taxes, vehicle license fees "make up a very substantial part of their budget," said Jean Ross, director of the nonpartisan California Budget Project.
The state cut the rate on vehicle license fees by two-thirds in 1998, when there was a surplus. Money from the fees that were cut had been going to local governments, and the state has been making up the difference.
Most of the speakers at the news conference emphasized that when the fees were slashed, there was an understanding that if the state ran into hard times the fees would be restored.
Budget expert Ross concurred. "It was absolutely the understanding and the intent of the measure to ensure that, if the 'backfill' was not there, the license fee would automatically increase to make cities and counties whole," Ross said in a telephone interview.
Gov. Gray Davis' proposed new budget would halt the state's "backfill" to cities over the next 18 months, leading to a $4.2 billion revenue loss -- $1.3 billion this year and $2.9 billion next year.
"I am deeply concerned about Gov. Davis' proposal to balance the state budget on the backs of local governments," Hahn said at the news conference.
"No one wants to see the fees go back up," Wesson said. "But it's a small price to pay for keeping our fire stations open and our police officers on the job."
Republicans in the Legislature oppose Wesson's measure, said Peter DeMarco, spokesman for Assembly Republican leader Dave Cox of Fair Oaks. "For the past three years, Democrats led California on an unprecedented spending spree. Now, faced with an unprecedented budget shortfall, rather than acting responsibly to reduce state spending, they are asking hard-working taxpayers to foot the bill," DeMarco said.
It's unclear whether Republicans will be able to stop Wesson's measure, because it requires a simple majority vote and Democrats control both houses. Some Sacramento sources said they think restoration of the fees is not as sure a prospect in the state Senate as in the Assembly. On the other hand, Senate Democratic leader John Burton of San Francisco opposed the lowering of the vehicle fee and is expected to support an increase now.
On Monday, Davis spokeswoman Hilary McLean reiterated the governor's opposition to increasing the fees. "We looked at" the fees as an option when the governor was preparing his budget proposal, she said.
The governor rejected it, she said, because he could not require local governments to use the funds for specific programs, including child care, foster care and drug treatment, which Davis' austerity budget would protect, McLean said.
Davis has proposed a 1% increase in the sales tax and a boost in personal income tax on the wealthy as a means of raising revenue to help erase the state deficit. McLean said the governor's proposal would put money raised in this fashion into a special fund for the social service programs he seeks to protect.
Asked whether Davis would veto a license fee hike, McLean said, "The governor has indicated he much prefers his own proposal.... The governor has not used veto language. He has signaled strongly he isn't interested in going there."
Some Sacramento sources, who would speak only anonymously because of the political sensitivity of the issue, said that Davis had designed his budget knowing that Democratic lawmakers would respond with a fee hike proposal. The sources speculated that Davis would let legislators take the heat for raising the fees, and would not veto the measure.
Wesson said he hopes the Assembly and Senate will pass his bill by Feb. 1.