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It’s time for the Great Undoing. California must undo the policies that have created the affordability crisis, forcing working families to live paycheck to paycheck. Whatever it takes, one policy at a time, and I’m starting with driving costs.
I am announcing the California Driver Affordability Act of 2024, an initiative to eliminate the Vehicle License Fee (VLF) entirely. This tax on car ownership is currently .65% of your vehicle’s value, paid at purchase and then every year when you register your car or truck. It’s the main reason drivers get eye-popping registration bills every year.
Why this and why now? Despite intense negotiations and a little bit of bipartisan cooperation, the legislature has been unable even to suspend an increase in California’s highest-in-the-nation gas tax, much less suspend the tax entirely, as several states have done recently. Drivers are shouldering another $500 million in annual taxes that began on July 1. Couple that with our astronomical gas prices and runaway inflation and many families are simply priced out of summer vacation plans.
And it’s hardly just vacations that are affected. Imagine owning a delivery business right now, or a trucking company? Families are being squeezed as the price of a tank of gas races above $100 and are having to make hard choices about where to cut expenses, just so they can afford to drive to work. It’s a cruel state for working people.
Here’s a little reminder of how California works outside of wealthy coastal areas and Silicon Valley – we are the poorest state in the nation. The US Census Bureau’s supplemental poverty measure, which considers cost of living, shows California to be worse off than any other state. Californians pay so much more for life’s basics that they have only crumbs left to save, invest, or enjoy.
That’s an ugly counterpoint to the cheerleaders who boast that we are the world’s 5th-largest economy. How large California’s economy is does not matter to people who can’t afford to rent an apartment, buy groceries or put gas in their cars.
Governor Newsom is offering some one-time checks to help families weather the California cost crunch. It’s better than nothing but it’s not enough. Families can’t budget based on the whims of a governor. They need permanent relief and predictable costs. If the legislature or governor can’t deliver, it’s going to fall on the people themselves to change the state for the better.
Canceling the VLF is one needed step out of many. It will save drivers hundreds of dollars a year, forever. For example, if you are buying or re-registering a $20,000 car this year, you would save $130. If you are buying or re-registering a $40,000 car, you would save $260. Unlike Newsom’s one-year proposal, these savings would persist, year after year.
My initiative will backfill VLF money from the state’s surging general fund and nearly $100 billion surplus, so that local governments that depend on VLF revenues can continue to operate without missing a beat. This is a way of giving taxpayers the refunds they deserve but can’t get through elected government.
The legislature will never give up government revenue. Struggling Californians will have to help themselves at the ballot box if we are ever to undo the damage that has spilled out of the capitol.
This California Driver Affordability Act is a start. We need to make every aspect of California life more affordable, from housing to electricity to groceries. The state is becoming unlivable to all but the wealthy. That must change. It’s time to cut the car tax and start to permanently increase prosperity in the Golden State.
Senator Ted Gaines (Ret.) was elected to represent the Board of Equalization’s First District. He is a leading taxpayer advocate and is committed to providing trustworthy and transparent representation for nearly ten million constituents in 30 counties of northern, eastern, and southern California.