The Car and Truck Fleet and Leasing Management Magazine

CA Assembly Votes to Increase Vehicle Taxes

February 3, 2003

California lawmakers voted on Jan. 28, 2003 to hike vehicle taxes approximately $4 billion annually, Reuters reported. The measure –- coupled with $8.6 billion in spending cuts -– is aimed at bridging an enormous budget gap. In 1998, when its economy was booming and state coffers were flush, California lowered annual vehicle licensing fees to 1 percent from 2 percent. Since then, the Internet industry has crashed and California’s economy –- like the rest of the U.S. -– has suffered, resulting in a reduction in tax revenues. The state assembly voted 45-to-33 to restore the pre-1998 level of vehicle taxes. The move will cost the typical car-owner an additional $100 each year in licensing fees, according to the Reuters report. The measure will go to the state senate for approval. If passed, it will require Gov. Gray Davis’ signature. Davis has said he doesn’t want to raise vehicle taxes, but also said he won’t veto the hike.
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