California motorists’ vehicle license fee would more than double under a proposed November 2014 ballot measure to raise an estimated $3 billion a year for the state’s ailing road system.
The constitutional amendment would phase in a surcharge to the fee charging motorists an extra one percent of the vehicle’s value each year. The fee has been .65 percent of a vehicle’s market value since the late 1990s, with a temporary increase to 1.15 percent from May 2009 through June 2011.
In language filed with the attorney general’s office earlier this week, proponents Will Kempton, the executive director of Transportation California who was Caltrans director from 2004 to 2009, and Jim Earp, executive director of the labor-management California Alliance for Jobs and a member of the California Transportation Commission, said, “California is facing a transportation funding crisis.”
In an interview, Kempton said the state is running out of money to pay for road maintenance. Almost $20 billion in voter-approved borrowing for highway projects has already been spoken for. Meanwhile, a steady increase in the number of electric and high-mileage hybrid vehicles – a key part of meeting the state’s goals to limit greenhouse gases – have reduced revenue to maintain highways from the per-gallon gasoline tax.
Transportation groups, construction unions and others will decide in January whether to commit the money for the signature drive to qualify the measure for next November’s ballot, Kempton said.
Proponents would have to overcome a legacy of opposition from motorists, car dealers and others against past proposals to raise the “car tax.”
Jon Coupal of the Howard Jarvis Taxpayers Association said California residents already pay some of the highest income and sales taxes in the country. Saying he respected Kempton, Coupal blamed state leaders for squandering gas tax revenue and other money that should be spent to maintain California’s roads.
Brian Maas, president of the California New Car Dealers Association, said this week’s proposal would “penalize people for owning cars.” A better approach, he said, would be to increase taxes on vehicle fuel, since that would correlate to how much someone drove. The group has not taken a position on the issue, he added.
The proposal would be the first highway-funding ballot measure since Proposition 1B in 2006. That measure, backed by former Gov. Arnold Schwarzenegger and placed on the ballot by the Legislature, won easy approval from voters.
Proposition 1B relied on borrowing backed by general tax revenues, with a 30-year payoff. The proposal, though, would have a more direct impact on motorists’ wallets.
Under Department of Motor Vehicles schedules, someone who bought a 2013 Honda Civic for $16,000 this year will pay a $52 license fee in 2018. If the road repairs act passed, that motorist would pay about $130 that year, when the 1 percent surcharge would take full effect.
The license fee had long been 2 percent of a vehicle’s value before lawmakers, with a flush state budget, began reducing it in 1998.
After state revenue collapsed a few years later, then-Gov. Gray Davis raised the fee to the full amount in spring 2003. Motorists reacted angrily and Schwarzenegger campaigned against the increase during the summer recall fight, restoring the lower amount within hours of taking office Nov. 17, 2003.
In 2009, lawmakers approved a temporary 0.5 percent increase in the vehicle license fee, raising about $1.6 billion annually to help close a budget shortfall. The 0.5 percent surcharge expired in July 2011.
Monday’s filing seeks a title and summary. Once cleared for signature gathering, proponents would have up to 150 days to collect 807,615 valid voter signatures to qualify for next fall’s ballot.