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Truck owners fight plan to hike fees
State officials contend an error made three years ago gave the industry a tax break

June 17, 2003

A proposal by Gov. Gray Davis to boost the fees paid by truck owners is pitting the industry, which says truckers will be driven out of the state, against budget officials, who say the increased revenue is needed to keep highway projects on track.

At the heart of the controversy is a change that was made three years ago in the way truck-weight fees are assessed. The change was intended to make the state conform with the system used in the rest of the nation, while continuing to generate the same revenue for the state.

But for reasons that are under dispute, the fees have fallen $160 million short of what was expected. This money goes into a state fund that pays for increasing the capacity of highways and making other transportation improvements.

Davis' Department of Finance blames the shortfall on a miscalculation -- in effect, it says the trucking industry got an unintended tax break. The proposed fee increase of about 42 percent would correct that, the administration says.

For the largest trucks, the fee would go from $1,700 to $2,400.

But the California Trucking Association argues that the state's projection was too high to begin with, failing to account for the economic downturn and an exodus of trucking companies to neighboring states to escape California's high fuel costs.

Hiking the fees on the truckers who remain would burden them unfairly and cause even greater numbers to go elsewhere, said Stephanie Williams, vice president of the trucking association.

"During a recession, it's not a good idea to tax people who can leave," Williams said.

One lawmaker key to state budget negotiations has taken an interest in the issue. Assemblywoman Jenny Oropeza, D-Long Beach, is chairwoman of a six-member budget-writing conference committee. She represents a district that includes the ports of Long Beach and Los Angeles and is home to many trucking companies. Like many lawmakers, she has received contributions from the trucking association.

"I'd hate to see us do something so onerous that it could put some small operators out of business," Oropeza said.

At the same time, she said, not imposing the increase "probably means a slowing down of the (highway) projects" -- an outcome she also doesn't favor.

She argues instead that the fee increases should be phased in to soften the blow to truckers.

The bill that sparked the controversy was approved by the Legislature near the end of the 2000 session.

California was the only state still using an old method for determining truck-weight fees.

Other states were required to forward some of their fee revenue to California based on the use of the state's highways by out-of-state trucks. But because of the discrepancy in how fees were determined, the other states were forced to maintain separate accounting systems just for California.

Faced with the threat of losing more than $50 million a year, the Legislature approved the bill, bringing the state into conformity.

The law said that revenues were expected to stay the same. If that didn't happen, the law called for the fee schedule to be adjusted.

"The change in 2000 was meant to be revenue-neutral," Department of Finance spokeswoman Anita Gore said. "That has turned out not to be the case. This is an attempt to correct that."

Truck registrations have increased even as revenue has dropped, Gore said, suggesting that the fee structure -- not the economy -- is to blame.

The trucking association counters that the state's registration figures include pickup trucks.

"That doesn't have anything to do with commercial" trucking, Williams said.

Trucks that travel outside California can easily choose to register in another state, she said -- in some states, it can be done on the Web. That could

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