Auto Club: Legislators Urged to Defeat ``Car Tax'' Bill.

Business/News/Automotive Editors

LOS ANGELES--(BUSINESS WIRE)--Aug. 30, 2002

Saying motorists would be the losers, the Automobile Club of Southern California sent a letter to legislators today announcing its strong opposition to legislation that would inappropriately relegate responsibility to raise the state Vehicle License Fee (VLF) to the Department of Finance to avoid the budget process.

The Auto Club urged legislators to defeat AB 1105 by Assemblymember Jenny Oropeza.

"This last-minute attempt to allow a tax increase on the motoring public without legislative approval would literally be taxation without representation," said Alice Bisno, vice president of legislative and regulatory affairs. "In addition, motorists should not be singled out for a disproportionate tax burden as a quick fix for the current budget crisis."

Earlier legislative attempts to raise the VLF to cover the state's $23 billion budget deficit were unsuccessful. Currently, raising the VLF would require a two-thirds vote of the legislature. AB 1105, which needs only a majority vote to move to the governor's office, would take the VLF out of the budget process so no legislative vote would be required and give the Department of Finance the power to trigger VLF increases.

In a letter sent to all legislators, the Auto Club said AB 1105 "seeks to completely undo the VLF tax relief and allows legislators to escape responsibility for imposing huge tax hikes by referring the responsibility to the Department of Finance."

"This is an outrageous attempt to circumvent the legislative process," said Bisno. "Millions of California motorists should not face substantial tax increases because the legislature is trying to throw a political hot potato out of its court. AB 1105 literally gives the Department of Finance the right to raise the VLF at will. Motorists should shoulder their fair share of taxes, but should not become budget scapegoats."

The general statewide tax rate for real and personal property is 1%. For years the VLF tax rate was 2%. The Auto Club worked to eliminate inequities in the tax and supported efforts to lower the rate to its current 0.65% of assessed value.

Auto Club research shows the following increases if the VLF is raised:

Vehicle                      2001 with VLF Offset    2002 no VLF offset
                           (.65% of assessed value)    (2% of value)

1998 Ford Windstar (minivan)        $110                   $289
2001 Mercury Marquis                $164                   $455
1996 Ford Taurus                    $ 72                   $185
1998 Honda Accord                   $ 89                   $234

"Motorists could see their VLF fee nearly triple if AB 1105 passes," said Bisno. "Increased VLF fees will be difficult for many consumers to absorb and legislators need to be aware of the impact on their constituents."

The Automobile Club of Southern California, the largest affiliate of the AAA, has been serving members since 1900. Today, the Auto Club's members benefit by roadside assistance, insurance products and services, travel agency, financial products, automotive pricing, buying and financing programs, automotive testing and analysis, trip planning services and highway and transportation safety programs.

Information about these products and services is available on the Auto Club's Web site at www.aaa-calif.com.