Car tax clash Car tax clash (December 26, 2003)

Governor's action helps, but local legislators looking for permanent solution

By Grace Rauh

As the city is slammed with a $3 million funding shortfall and the cash-strapped county sues Sacramento, local legislators say they are trying to put California's financial house in order and keep vital programs off the chopping block.

Having made their case to have their funding restored, city and county leaders are now anxiously awaiting news from Sacramento. They want to know when and how the state will make good on its promise to backfill the money that disappeared when the Gov. Arnold Schwarzenegger repealed the vehicle license fee increase.

State Assembly member and former mayor Sally Lieber, D-Mountain View, has heard those complaints, but doesn't think the fault lies with her.

"I have no problem facing the anger of the cities because I agree with their position," she said.

Lieber and other legislators are looking forward to hunkering down with the state budget in January. "We need to get real and start running government like a household," she said.

County supervisor Liz Kniss agreed that something needs to be done. And to make sure something happens, Santa Clara County sued the state on Dec. 17 for its failure to provide the vehicle license fee "backfill" to local governments as obligated by the state constitution.

"It is very difficult to deliver services on a continuous and predictable basis if you don't have that funding stream you can look to and be able to know it will be there," Kniss said.

The day after the county filed its lawsuit, Schwarzenegger invoked his emergency powers and bypassed the legislature to make $150 million in spending cuts to the state budget. Money saved from the cuts will go to local governments and help restore some of the funds that cities and counties lost when the governor rolled back the vehicle license fee.

The vehicle license fee, more popularly known as the car tax, funds local government services, like libraries and public safety. Former Gov. Pete Wilson lowered the fee when he was in office but promised that the state would "backfill" the lost revenue.

The fee was tripled this fall by former Gov. Gray Davis, and Schwarzenegger lowered it shortly after taking office, only he did not specify how the state -- mired in its own fiscal crisis -- would pay the difference to local governments.

Schwarzenegger's decision to handle it alone and send money to local governments has made some California officials breathe easier, but Kniss isn't convinced that this is a real, viable solution. Nevertheless, she'll take the money.

"We're a little puzzled at how all this has come about. If it does come to pass, and we're not sure that will be the case, it, of course, makes an enormous difference for us," she said.

Lieber also questioned the legality and motive behind the governor's announcement.

"There's the question of whether or not this was a legal tactic to use, but I think that's for the attorneys to sort out. As a public policy matter, it seems that the governor is governing by popularity polls," she said.

Kniss just wants the fiscal roller coaster to stop. The state needs to provide consistent funding to local and county governments -- she doesn't want to cut programs only to have the state later find the money to pay the backfill, said Kniss.

"Once we cut a program, to go back and reinstate it, find the people to do the program again and so forth is very difficult," she said.

E-mail a friend a link to this story.