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Proposal floated for counties to raise vehicle tax

February 11, 2011 |  1:39 pm

With local governments struggling financially, a state lawmaker has proposed giving counties the power to raise vehicle license fees with the approval of a majority of voters.

Sen. Mark Leno (D-San Francisco) introduced legislation Friday that would allow county boards of supervisors to place measures on the ballot to restore the total vehicle license fee in their county to 2% of the vehicle’s value, the rate used from 1948 to 1998 -- before state officials approved reductions.

"As county services continue to face drastic cuts ... it is critical that we provide local governments the tools they need to generate voter-approved revenues," Leno said in a written statement. "With these funds, counties can help preserve and restore essential programs."

Leno, who is chairman of the state Senate Budget Committee, said boards of supervisors would be required to muster a two-thirds vote to put a fee measure on the ballot.

The proposal to raise the fee was denounced by Jon Coupal, president of the Howard Jarvis Taxpayers Assn. as "another tax grab." He predicted it would be unpopular with voters.

"Since we already have some of the highest car and gas taxes in the nation, we don’t like it," Coupal said.

The statewide vehicle license fee is currently 1.15% of a vehicles value because of a temporary increase in 2009 as part of a budget agreement. The increase is set to expire at the end of July, dropping the tax back down to 0.65%. Gov. Jerry Brown has said he plans to ask voters this summer to approve a five-year extension of the 1.15% level.

Leno said boosting the fee by .85% in San Francisco would allow the county to reap up to $44 million annually.

His legislation was endorsed at a San Francisco news conference by Mayor Edwin M. Lee and San Francisco Board of Supervisors President David Chiu.

"Even a small increase in revenue will go a long way in restoring some of the budget cuts the city has been forced to make," Chiu said.

-- Patrick McGreevy