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Morgan Hill
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October 16, 2021

State must decide cuts before increases

We find ourselves in the unusual position of applauding a move
by Gov. Gray Davis, even if his reasons for the decision differ
from ours. Davis has made the right choice when he promises to veto
the Legislature
’s bid to increase the vehicle licensing fee, or VLF.
We find ourselves in the unusual position of applauding a move by Gov. Gray Davis, even if his reasons for the decision differ from ours. Davis has made the right choice when he promises to veto the Legislature’s bid to increase the vehicle licensing fee, or VLF.

Gilroy counts on the VLF for 8 percent of its general fund revenues. Morgan Hill counts on the VLF for 12.1 percent of its general fund revenues. In Gilroy, the figure is 8 percent. Santa Clara County government relies on the VLF for more than 27 percent of its general fund revenues.

Although the vehicle licensing fee has been reduced in recent years from 2 percent of a car’s value to .65 percent, the state has made up the difference from what it actually collects and what local governments should receive – a practice called “backfill.” One of the features of Davis’ budget proposal is to stop paying local governments the VLF backfill.

Assembly Speaker Herb Wesson, D-Culver City, has authored a bill to triple the VLF as a way to deal with the $35 billion budget shortfall the state faces over the next 18 months. Davis’ decision to veto the bill is reportedly an attempt woo Republicans to support a bipartisan budget plan that would include tax increases, which conservatives oppose. We think that’s the wrong reason to veto the Wesson’s bill to increase the vehicle licensing fee.

The right reason to veto Wesson’s bill is to send the message that the Legislature has put the cart before the horse. Tax increases of any kind – income, sales, cigarette or the VLF – should only come after the state has made deep and significant cutbacks and taken serious steps to end fraud, waste and mismanagement of taxpayer funds. In short, California needs to find its way to a much smaller, leaner and more efficient state government.

That means Davis needs to propose cuts to the state’s prison system – despite the fact that he accepted hefty gifts from correctional officers unions. It also means he needs to consider releasing from the state’s prisons nonviolent offenders who maintain good behavior records.

We’ve said it before and we’ll say it again: when you’re talking about cutting education, health care and infrastructure, there can be no sacred cows, no untouchable programs as politicians look for places to slash spending.

If, and only if, the state first implements considerable cutbacks should it consider tax increases of any kind. Any the only way the VLF increase should be approved is if vehicle licensing fees are guaranteed to remain local government revenue.

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