Auto registration tax cut fuels debate in Assembly

Monday, July 6, 1998

Auto registration tax cut fuels debate in Assembly

PROPOSAL: Wilson plan to utilize budget surplus finds partisan
opposition

By Dasol Kim

Daily Bruin Contributor

Gov. Pete Wilson’s proposed $3.6 billion automobile tax cut has
drawn a hail of opposition from the Democratic majority in the
legislature.

The proposed tax cut, the centerpiece of Wilson’s 1998 budget
plan, will reduce auto registration tax costs by 75 percent,
relieving the pocketbooks of every California auto owner.

As a result, UCLA students and other Californians who own cars
will pay about $42 a year on their car registration tax under the
recommended cut. Californians currently pay an average of $171
every year, according to the Legislative Analyst’s Office
(LAO).

"Our car tax cut will produce an average savings of $135 per
year every year – for each of California’s car owners," Wilson said
last Wednesday at a press conference.

This year’s $4.4 billion surplus, caused by economic expansion
in the past fiscal year is giving Wilson the luxury of proposing
the tax break, the largest single such cut in the history of
California.

"With a $4.4 billion surplus, there’s no escaping the fact that
you and your neighbors are being over-taxed by California’s
existing tax system," Wilson said in a statement.

However, Wilson faces strong opposition to his budget plan.
Should the legislature approve this car tax cut, there will be a
budget deficit which will force the government to cut funding for
various state programs, said Ted Gibson, an economist with the
LAO.

The proposed reduction in the vehicle license fee "will
immediately drive us into the red and keep us there," said Assembly
Speaker Antonio Villaraigosa (D-Los Angeles), in a statement.

Democrats unveiled their budget plan last Wednesday, which does
not include a car tax cut. Instead, it offers a temporary six-month
quarter-cent sales tax cut which aims to save Californians $1
billion. This item easily passed through the Senate, but the
Assembly blocked it last Thursday.

"This sales tax cut provides meaningful tax relief to taxpayers,
and at the same time will not handicap the investments we need to
make – particularly in education – if we are going to keep
California prosperous in years to come," Villaraigosa said.

Since money from the auto tax goes toward other programs, such
as education, Wilson’s budget plan calls for funds from the state’s
general fund to cover the loss of funds for these items.

Other items in the Democrats’ budget were an eight percent
increase in welfare benefits and a nine percent wage raise for
state workers, regardless of their performance.

Democrats also promised to spend more money on schools.

"I’m a car driver, so if I can reduce my registration that would
be good for me," said Jimmy Djapri, a fourth-year computer science
engineering student.

"But if that money can be used to fund schools, I would prefer
that money go to fund schools."

Lisa Cho, a third-year biochemistry student, agreed.

"Using (the budget surplus) on other things, like school
programs and education, will be better than just cutting individual
registration," said Cho.

Wilson responded to the Democrat budget plan by saying it is
"chock-full of giveaways" that increase spending on everything from
skateboard parks to swimming pools.

"There’s a four-letter word for the Democrat’s proposal: Pork!"
Wilson said.

The legislature failed to meet the July 1 deadline for budget
approval, set by the state constitution, for the eighth time in
nine years.