Thursday, October 13, 2005

The Vehicle License Fee

The VLF is special. What we do to auto owners is unique by any logic of
tax policy. When you buy an item you pay sales tax. That's it for
everything except vehicles. For vehicles you pay sales tax and then pay
and pay and pay forever. [There's the other major special case of real
estate but there's no sales tax and it's a distraction here.]

It's clear that the State just looks at the VLF as another funding
source. They tax because they can. A perusal of shows
that the authors cite Kah-Lee-Forn-Eah (the new pronunciation) as being
the most progressively taxing State in the nation. We also have the
largest budget shortfall and crisis. Coincidence? Not.

There's the old (and legitimate) claim that the liquor tax should not be
used to build breweries. The problem is California does just this for
another category. It all started in 1978 (1911 but that's another
story) when it was determined that funding local education with local
property taxes was racist. People think it was the Prop 13 rollback
that happened at the same time. This paved the way for the State to
confiscate and redistribute "education money." All of a sudden not only
were the well funded schools eviscerated but the worst schools were
flush with cash. Results are infamous. In a dozen years CA went from
the top 5 to the bottom 5 in educational outcomes. It also made real
estate property owners inlikely to vote any new taxes because they knew
the benefits would go elsewhere. Interestingly, now that the State has
it's grubby paws in the local schools it has become even more
beligerently racist in it's supposed funding formula.

What rationale is there to repeatedly re-tax the same vehicle? The
original sales or use tax was paid, the excise taxes (use fees) are
paid, all that's left is the State's legitimate pollution, safety and
registration interests. Even the smog fee is a travesty IMO.

Late model cars (<6-8yrs old) just don't have any reason
to be inspected -unless- they are modified. Anything that would cause
out of spec emissions will set off the service light and cause
noticeably bad driving. The need to make sure the vehicle is not
modified is the only legitimate reason for inspection. Surely the best
way is for the police to issue a fix it ticket for inspection when they
suspect modification but that's racist. See how these things tie
together? Just wait, it ties in more below.

The problem with remote sensing is that it works. How can that be a
problem? Well it is racist for one and it removes the need to test
every 2 years costing the State millions in fees for another.

The correct way to excercise the State's interests in vehicles via the
power of the purse is an ANTI-VLF fee. Here's how it works:

Vehicle taxes that INCREASE with the age of the vehicle so as to
encourage retirement. The sales tax for a purchase is more than enough
money to the state up front then a progressive registration fee say $50
plus 5x the year squared. $50, $55, $70, $95, $130, $175, $230, $295,
$370, $455, $550 thereafter. When a ten year old car starts sucking
down a half a grand per year there's an incentive to scrap and go
newer. Too bad it's racist.

What's all this racist stuff? Well, here in Kalifornia, there are 1.7
million unregistered and/or uninsured vehicles and more than 2 million
unlicensed drivers. Any racially tinged guesses about those vehicles or
drivers? Absolutely insane but the racism claim sticks.

Here, read what happens when you try to make the streets safer:,1375,VCS_238_2288622,00.html

Group says Oxnard traffic stops may be using racial profiling
Police deny allegations of bias

A Latino advocacy group has called on the Oxnard Police Department to
halt traffic stops for minor violations after residents complained
officers were racially profiling drivers.

Denis O'Leary, district director of the League of United Latin American
Citizens, said police were pulling people over in south Oxnard for minor
infractions, such as hanging items from rearview mirrors, to weed out
unlicensed drivers and check legal status.
Assistant Police Chief of Patrol John Crombach said officers crack down
on high collision areas by ticketing drivers for all violations,
including broken windshields and not using turn signals.

"The target is to reduce accidents and collisions," Crombach said. "We
have used that time and time again in areas that have problems."
Oxnard has the second-highest number of hit-and-run accidents in the
state, compared with cities of similar size, according to the
California Office of Traffic Safety records.
...[end story]

So, where were we? Oh yes. Why there's a VLF and why it contributes to
California's problems. Yes, contributes. Hopefully from all above
there's a new sensitivity to that claim. It increases pollution,
decreases safety, and distorts rational budget priorties. California
taxation has little to do with how much is collected and everything to
do with how much and where it is spending.

The real defeat worth noting was Prop 53. 1% in 2006 rising to 3% in 2015
of the State budget for transportation infrastructure. Lost 70/30.
Many people voted no because this was a vote no message election but
people like me voted no because it's wrong to encumber electeds with
mandatory spending. Other people like me voted no because the State has
a nasty habit of turning floors like 3% into targets/ceilings. We
should be spending 20% on infrastructure and knowing Sacramento they
would interpret a yes vote as direction that the people are satisfied
with 3%. Of course other people like me voted no because we've learned
transportation infrastructure is code for private rail bailouts,
transit boondoggles, High Speed Rail, freeway ramps for private
developments, urban airport expansions and the like. And of course if
we could only find a cynic, that hypothetical cynic might go so far as
to estimate that 1% rising to 3% of the budget is almost exactly the
States' projected bonded debt service for the States' portion of the
aforementioned High Speed Rail and 2006 is when the first bonds would
be floated and 2016 when the last bonds would be sold. That
hypothetical cynic would stop there rather than comment on the
likelihood of staying on budget and all the expected matching funds
being available. Amazing, this ties into the "Bad News..." post by the
same original thread author. Told you it is all related.

At least in other States the politicians look you in the eye while
picking your pocket. There's something seriously wrong when the State
legislature is more than 400 miles away from 18 million residents.
Thursday's surprise was the budget. Turns out we didn't carry over
$8billion but $10billion from last year despite our Constitution and
the sale of operating deficit bonds is all but killed in the courts and
ongoing overspending is not the projected $7billion but $7billion
fiscal year to date! The new governator is calling for a sunshine
audit. Note to TAR, submit your bono fides to for a
piece of that action. I can make it easy; We are spending $109
billion and collecting $69 billion. We are also encumbering by my
guess next year with $5 billion in book shuffles and another $10
billion in obligations for deferred pay, retirement and benefits
increases. There's probably another few billion in underestimating
healthcare (prevailing inflation instead of sector inflation) and
social services consumption. That's an acknowledged 9.6% and more like
12% in practice of all California personal income this year. Some 70%
higher than a decade ago.

The answers are every bit as easy as describing the problem and the
history and when I appoint myself guy in charge, I promise to fix the
budget, make the roads safer and more egalitatian and improve education.
The remaining 6 3/4 days of my one week term will be devoted to saving

1 comment:

SmellyPogoStick said...

First & Murst!