• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Plan may allow counties to raise car tax fees

February 10, 2011 12:00:00 AM PST
Local governments have been having a tough time funding services like public safety and social programs.

Now State Senator Mark Leno wants to give counties the authority to raise vehicle license fees, better known as the car tax, to keep programs going.

If it becomes law, 2/3 of the Board of Supervisors must approve putting the tax hike on the ballot, then a simple majority of voters in that county need to OK it.

"We're just giving a tool to counties they don't currently have in the midst of the worst financial crisis we've seen in 80 years," said state Sen. Mark Leno (D-San Francisco).

California car owners are already temporarily paying a higher car tax to help the state weather the financial crisis. It's now just over 1 percent of the vehicle's value.

Under Leno's proposal, counties could nearly double the rate up to 2 percent and keep the difference.

Say you have a Honda Accord worth $20,000. You currently pay $230 a year. Your county could increase that to over $400.

For large counties like Los Angeles, that would raise $700 million dollars a year. For San Francisco county, that's $44 million.

Republicans are lining up against it.

"We don't really need to raise taxes to solve our problem," said Assemblyman Jim Nielsen (R-Gerber). "There are other solutions, like making government work an awful lot better."

The car tax has always been unpopular with Californians. In the last two years, voters rejected both efforts to raise the vehicle license fee, even if it meant saving state parks.

Some car owners don't like the idea of giving more agencies the authority to raise their vehicle license fee.

"I don't agree with that," said David Rodriguez. "I would go any length to stop it."

But Leno believes residents should be able to tax themselves to provide the services they want.