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Tripling of Car Fee Is Expected The average car owner can expect his or her annual so-called "car tax" bill to go up by $136. There will be a 30-day reprieve as the state adjusts its computers for the new rate; then the higher bills will begin appearing in the mailboxes of California car, truck, trailer and motorcycle owners. With state lawmakers deadlocked over passage of a state budget and 11 days left in the fiscal year, the move comes as state coffers are running dry, save for an $11-billion short-term loan secured this week to keep the government operating for a couple of months. Officials with the Davis administration and the office of the state controller interpret the 1998 law that lowered vehicle license fees as saying that when the state reaches the kind of dire financial straits it is in now, that "triggers" the tax to automatically go back up. Republicans and taxpayer groups called it a legally dubious claim. They released an opinion from the nonpartisan legislative counsel's office Thursday that suggested that hiking the tax now would be illegal without a two-thirds vote of approval from the Legislature. They said they probably will file a court challenge. "It is ludicrous to suggest some low-level Department of Finance functionary can trigger a $4-billion tax increase," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn. Republican state Sen. Tom McClintock (R-Thousand Oaks) said he is prepared to rush to the secretary of state's office today to launch a ballot initiative to abolish the car tax altogether within an hour after the fee increase order is issued. But opponents of the fee acknowledged that state law would make it extremely difficult to immediately stop the increase. The state Constitution prohibits courts from stopping the collection of any tax until the case against it has been fully litigated. "They know they can collect an illegal tax for at least a few years before the courts can stop them, and that is why they are doing this," McClintock said of the governor and controller. The ballot measure McClintock is advocating to abolish the tax altogether would not appear before voters until November 2004. For the measure to qualify, McClintock would need to collect 378,000 signatures of registered voters. "I've already had 10,000 people sign up at my Web site as a result of a few radio interviews pledging a total of 600,000 signatures," he said. Davis administration officials said they have consulted with a cadre of attorneys, including the attorney general's office and the in-house counsel of the governor and controller, who affirmed that the tax increase is legal. "We are taking the most conservative interpretation of the statute and how it is implemented because we intend to survive the court test," said Department of Finance Director Steve Peace. Peace dismissed a finding by the legislative counsel that the tax rate would have to change every month based on how much money was in the state coffers. He said it would be unconstitutional for the tax rate to fluctuate that way. When the vehicle license fee was lowered in 1998, it came with a guarantee that the state would reimburse local governments the revenue they stood to lose from the tax cut.
Peace argued that the state cannot afford to make the $4-billion reimbursement in the coming fiscal year, so the tax must go back up to keep funds
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