Now that Gov. Arnold Schwarzenegger has made good on a campaign
pledge to rescind increased vehicle-license fees, Burbank officials
are trying to determine if the city lost out on a big pot of gold.
With Executive Order No. 1, which repealed a 200% increase to the
car tax instituted by Gray Davis before his recall, Schwarzenegger
this week wiped out a $4-million revenue source for the city of
Burbank. The governor said he expects the state Legislature to cover
the $4 billion due to local governments.
Burbank officials, though, are skeptical.
“Basically, we’ve been on a wait-and-see, and we’re following it
closely,” Financial Services Director Derek Hanway said. “We hope the
amount gets backfilled as promised, and the city will definitely be
pushing for that.”
Hanway said the extent of the damage inflicted on Burbank’s budget
depends on whether the city loses the revenue temporarily or
“If it’s just the balance of this year, we can take it from
existing resources [without making budget cuts]. We have some funds
we can tap into,” Hanway said. “If it’s long-term, we’re definitely
going to have to make cuts in future years.”
The Legislature convened in a special session Tuesday to discuss
budget issues, but leading Democrats have scoffed at the idea of
funding the vehicle-license fee backfill.
“I think [Schwarzenegger] should come up with the money,” said
Assemblyman Dario Frommer (D-Burbank). “It’s incumbent upon him as a
leader, having repealed the vehicle-license fee and putting a
$4-billion hole in our budget, to propose how he intends to backfill
local governments. We don’t have the money.
“What’s shocking is that he would simply rescind that without
coming up with a plan to replace it. It’s only his first day, so
maybe he’s got something in his pocket we don’t know about.”
Burbank officials hope that is the case. The money the city
receives from the car tax goes into the general fund, which is used
to finance the police and fire departments and other essential
The moral, Hanway said, is to keep local money in local hands.
“A lot of people don’t know the background of [the vehicle license
fee], that it was a local revenue and it went to the state years ago
to be more effectively administrated,” Hanway said. “But once the
state gets involved, what it wants, it takes.”