City may lose millions in taxes

Jenny Marder

Huntington Beach stands to lose $3.7 million in car tax revenue under

Gov. Arnold Schwarzenegger’s plan to reimburse drivers who paid the

tripled license fee.

When the December car-tax payment came from the state on

Wednesday, it was a mere $220,000 instead of the $1 million the city

normally gets, said Bill McReynolds, the city’s senior administrative

analyst.

From January through March, Surf City isn’t likely to get a

payment at all, which city officials say will severely cut into vital

services.

Statewide, $600 million is being withheld from cities and counties

to refund drivers who paid the higher tax passed by former Gov. Gray

Davis.

Right after taking office in November, Schwarzenegger rolled back

the car tax that had went up the month before. He promised to protect

local governments from losing money.

Losing the car tax, which makes up about 8% of the city’s general

fund revenue, would be devastating, Assistant City Administrator Bill

Workman said.

Cities and counties under the state constitution are entitled to

the car tax money to pay for core services such as roadwork, traffic

signals, street lighting, police patrols and emergency services.

“This is very serious, and we’re advocating as hard as we can and

trying to get the word out about the very serious nature of the loss

of money that’s been flowing into the city for the past 60 years and

paying for very basic core services,” Workman said.

Huntington Beach is working with other cities to reclaim the

money.

“What we find so curious is that the state basically gave away our

money despite the constitutional requirement that the [vehicle

license fee] go to cities and counties to help pay expenses,” Workman

said.

The City Council voted unanimously at its Nov. 3 meeting to

support a November 2004 ballot initiative, sponsored by the League of

California Cities, that would put voters in charge of whether local

tax dollars could be used to fund state services.

Workman said the measure would protect cities from this kind of

state interference.

“[The state] is coming to take the city’s money to make itself

whole, which is very disappointing,” Workman said.