Davis’ veto would take $1 million from city | TahoeDailyTribune.com

Davis’ veto would take $1 million from city

Susan Wood, Tribune staff writer

The $1 million in vehicle license fees that South Lake Tahoe relies on from the state is in jeopardy.

Gov. Gray Davis on Tuesday pledged to veto a bill passed by the Legislature that would allow local governments to keep receiving the money.

Davis had proposed to use the $4 billion generated by the fees to help close a nearly $34 billion budget shortfall. The cities, though, use this money as part of their general funds.

In South Lake Tahoe, it would mean losing out on the equivalent of what Measure Z dollars — the transient occupancy tax hike — is estimated to generate. In other words, financially the city is back to where it stood before the Nov. 5 election.

“We’re responsible for providing basic services. We do the real things that affect real people. This is our bread and butter,” City Manager Dave Jinkens said, listing snow removal as well as police and fire as other services supported through the $21 million general fund. “I’m disappointed. Cities have taken hits since the 1980s.”

It is too soon to know how the city will cope with an unexpected loss of $1 million.

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Cities and counties have gotten a set percentage since 1998. As the fees consumers pay have steadily gone down, the governor has supplemented the difference. Now Davis seeks a way to eliminate those extra payments — payments local governments deem necessary and anything but extra.

VLF has been cut the past four years to provide consumers a break on what they pay to the Department of Motor Vehicles. Although the fees vary with each vehicle, returning them to the 1998 levels would jack up the average rate to $115, the DMV says.

“It would be irresponsible when the state made a commitment to cities in 1998 that neither their word or the letter of the law means anything to them,” Jinkens said, calling it “a real tragedy” if Davis vetoes the bill.

The League of California Cities has urged city governments to send letters to the governor asking for support of AB4X. The governor has until Feb. 15 to make a decision. Jinkens, with Mayor Judy Brown, has already composed a letter to Davis.

There is still hope for a compromise.

El Dorado County Supervisor Dave Solaro remains optimistic, but the Tahoe official said a veto would ultimately hamper the county’s general fund. The supervisors approved a resolution last week supporting the bill.

“Until he makes the decision, I’m holding out and waiting,” Solaro said.

In a news conference Tuesday afternoon, Davis asked the Legislature “to go back to the drawing board.”

As incentive for the governor to sign the legislation, lawmakers tied about $8.6 billion in budget cuts to the VLF bill. Davis said that is not enough. Davis said if he signs the bill, the Legislature would need to make another $8 billion in cuts or raise taxes by $13 billion.

“(Passing the bill) will mean deeper cuts in education and social services,” Davis said.

The bill sponsored by Assembly Speaker Herb Wesson, D-Culver City, passed the Assembly last week 45-34. Assemblyman Tim Leslie, R-Tahoe City, cast a no vote. It passed in the state Senate Monday 23-16. State Sen. Rico Oller, R-San Andreas, voted against the measure.

The state budget shortfall has been blamed on a variety of converging misfortunes, including high medical insurance costs, poor state investments in the stock market and inflated energy costs it was forced to absorb.

— Susan Wood can be reached at (530) 542-8009 or via e-mail at swood@tahoedailytribune.com

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