Car Tax May Triple

Plan could close more than half of state budget's shortfall

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    A plan to triple California's motor vehicle license fees is moving toward the fast lane in the state Capitol.

    State lawmakers are working on a budget deal that would include a massive increase in the what Californian's pay for vehicle license fees.

    There's buzz at the Capitol in Sacramento at a possible deal to triple California's car tax to help close California's $11 billion budget deficit. Under the deal, Republicans -- many of whom have signed anti-tax pledges -- would agree to triple the vehicle license fee in return for a ballot measure that would mandate strict limits on spending.

    Drivers would see their license fees rise from 0.65 percent of their vehicle's value to 2 percent. At those rates, $25,000 new car would cost $336 more to license than it currently does, all at a time when new car sales are slumping badly.

    The higher fees would generate an estimated $6 billion annually for the state. Some projections put the deficit at nearly $28 billion for the next year and a half.

    The plan is causing different road rage around San Diego.

    "You pay taxes on gas and everything else.  That's supposed to take care of your roads and everything else.  This is all ludicrous!  It's absolutely ludicrous," said Wayne Gaul of La Mesa.

    Ironically Gov. Arnold Schwarzenegger's first act in office was to cut the car tax to the current rate.