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Woman refueling car at gas station using a fuel nozzle. (Photo: Hrytsiv Oleksandr/Shutterstock)

Eliminating Vehicle License Fee is One Step in Addressing Affordability

Californians pay so much more for life’s basics that they have only crumbs left

By Ted Gaines, July 13, 2022 6:30 am

It’s time for the Great Undoing. California must undo the policies that have created the affordability crisis, forcing working families to live paycheck to paycheck. Whatever it takes, one policy at a time, and I’m starting with driving costs.

I am announcing the California Driver Affordability Act of 2024, an initiative to eliminate the Vehicle License Fee (VLF) entirely. This tax on car ownership is currently .65% of your vehicle’s value, paid at purchase and then every year when you register your car or truck. It’s the main reason drivers get eye-popping registration bills every year.

Why this and why now? Despite intense negotiations and a little bit of bipartisan cooperation, the legislature has been unable even to suspend an increase in California’s highest-in-the-nation gas tax, much less suspend the tax entirely, as several states have done recently. Drivers are shouldering another $500 million in annual taxes that began on July 1. Couple that with our astronomical gas prices and runaway inflation and many families are simply priced out of summer vacation plans.

And it’s hardly just vacations that are affected. Imagine owning a delivery business right now, or a trucking company? Families are being squeezed as the price of a tank of gas races above $100 and are having to make hard choices about where to cut expenses, just so they can afford to drive to work. It’s a cruel state for working people.

Here’s a little reminder of how California works outside of wealthy coastal areas and Silicon Valley – we are the poorest state in the nation. The US Census Bureau’s supplemental poverty measure, which considers cost of living, shows California to be worse off than any other state. Californians pay so much more for life’s basics that they have only crumbs left to save, invest, or enjoy.

That’s an ugly counterpoint to the cheerleaders who boast that we are the world’s 5th-largest economy. How large California’s economy is does not matter to people who can’t afford to rent an apartment, buy groceries or put gas in their cars.

Governor Newsom is offering some one-time checks to help families weather the California cost crunch. It’s better than nothing but it’s not enough. Families can’t budget based on the whims of a governor. They need permanent relief and predictable costs. If the legislature or governor can’t deliver, it’s going to fall on the people themselves to change the state for the better.

Canceling the VLF is one needed step out of many. It will save drivers hundreds of dollars a year, forever. For example, if you are buying or re-registering a $20,000 car this year, you would save $130. If you are buying or re-registering a $40,000 car, you would save $260. Unlike Newsom’s one-year proposal, these savings would persist, year after year.

My initiative will backfill VLF money from the state’s surging general fund and nearly $100 billion surplus, so that local governments that depend on VLF revenues can continue to operate without missing a beat. This is a way of giving taxpayers the refunds they deserve but can’t get through elected government.

The legislature will never give up government revenue. Struggling Californians will have to help themselves at the ballot box if we are ever to undo the damage that has spilled out of the capitol.

This California Driver Affordability Act is a start. We need to make every aspect of California life more affordable, from housing to electricity to groceries. The state is becoming unlivable to all but the wealthy. That must change. It’s time to cut the car tax and start to permanently increase prosperity in the Golden State.

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17 thoughts on “Eliminating Vehicle License Fee is One Step in Addressing Affordability

  1. This. This, this, this. I don’t mind registering my car when I first purchase it, but yearly is ridiculous. Even if the yearly fee went down base on depreciation would help. What I would really like to se is complete elimination of taxes on per gallon sale of gasoline. Gas is pretty much an essential commodity. Like many food items are not taxed.

    1. It also used to be that utilities (phone, water, electricity, gas) were not taxed —— until many CA municipalities started crying alarm and danger and extreme city poverty that would cut all your services if you didn’t vote for yourself to be TAXED on those utilities. It was called the Utility Users Tax and it’s still there on your utility bill. Go look. And guess what goes up as water, energy, and other costs are raised by cities? That’s right, the utility users tax goes up. A sweet deal for city revenue, but it’s certainly adding to the prohibitively expensive utility costs for customers, isn’t it? Fortunately for city scoundrels, and no thanks to them, we have even bigger problems and bigger costs than that at this point in time.

  2. As far as I’m concerned, we shouldn’t have to pay sales tax on a vehicle that was sold new and the tax paid. Why should the state collect tax over and over and over again every time the same vehicle is sold? They already got their undeserved “cut”. No wonder some stretch the truth when buying a used vehicle, if they’re buying from a private party. The state encourages this kind of behavior by overtaxing the same item over and over again. You should be able to trade in a car and pay the tax only on the difference between what you received for your trade in and the price of the new car. Some states actually do this, but do you think they’d ever give us ANY kind of tax break here in CA? Not on your life! Tax, tax, tax, tax, tax, tax and more tax. Demorats never saw a tax they didn’t love.

  3. How about we REMOVE ALL DOMINION VOTING SYSTEMS from California first, so we can have some semblance of fair, accurate elections again???

  4. I have a 32 year old Mercedes which runs just fine. I had to pay $200 to get it licensed this year. It is maybe worth $2,000 and is driven less than 50 miles a week. This is an outrageous fee.

  5. The common theme I read from the replies are we as citizens of the state of California are over taxed from many sides. Whether it be a purchase of a new vehicle to several of our utility bills. We need to address this at the ballot box. The first step would be to eliminate ballot harvesting in this state. Thank you

  6. I certainly agree! Interestingly, I never received a renewal notice on my car prior to the renewal date. But I received a late payment notice which included a hefty penalty. I was too busy to fight the penalty, so just paid the whole amount last month. Fast forward, yesterday I ran an errand – 12 miles round trip. I started noticing the little orange stickers signifying current registration. Guess what! I counted 18 cars without current registration….and those were the only ones either directly in front of me or 1 lane to the right. Made me think that perhaps some drivers don’t feel the fee is justified – I AGREE! I drive a KIA Soul purchased in 2016 with less than 19K miles on it and it cost (basic) over $250 to register it. INSANE.

  7. Excellent discussion all. Wife and I doing the math to our economic situation has us very concerned as retirees.

    There just is no breaks for middle income earners. Its all about economic low income even illegal aliens now officially being awarded same, even more medical access as California Medicare eligible. What amazes me is the Gov grins as if he’s some sort of immature kid giving out Candy and pop like its never ever going to run out. License fees, I agree. Sure. But? How are we residents to communicate to our younger generation whom just now graduated from High School literally knowing little to anything about how to get on with life on a pay stub.

    I do not know how to convince even my own family over much these days. I feel most of the time being older is akin to being ignored. I see my own younger kids guided by deep emotion. Clear, creative thinking even just jumping in… making a do it now decision causes inaction all because failure is not

    Life is by chance much of the time. You wing it and move on. Repercussions be damned. Get it done.

    Not anymore

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