Car Tax In California May Rise Three Fold

November 21, 2008 10:05 a.m. EST

Sacramento, CA (AHN) - California lawmakers are in favor of tripling the state vehicle tax to close its budget deficit. For GOP legislators to vote for that measure, they want strict limits on future state spending.

Under the proposal, annual license fees for cars would go up from the current 0.65 percent of the vehicle's value to 2 percent. For automobiles or trucks whose values exceed $25,000, owners would have to shell out an extra $336 yearly.

The tripling of car registration fees is expected to raise $6 billion yearly, which would help bridge California's budget gap estimated to reach almost $28 billion in the next 18 months.

But this early, residents have expressed their opposition to the large jump on their car registration fees after the proposal was published in the Los Angeles Times website. Because of the possible backlash on lawmakers who will support the measure, some legislators have distanced themselves from the planned car tax increase.

Meanwhile, Assembly Speaker Karen Bass has another idea on how to cut California's budget deficit. Instead of cutting expenses and hiking taxes, Bass proposed seeking federal financial assistance.

California Gov. Arnold Schwarzenegger is not averse to asking help from the federal government, but would prefer that the state also clean up its act first. The governor's spokesman said, quoted by the Sacramento Bee, "We need to get our own house in order before we can expect the federal government to help us."