COMMUNITY COMMENTARY:

In response to his recent comments (“State deficit near $14 billion; thank the Democrats,” Dec. 19), I suggest Sen. Tom Harman check his facts.

The Vehicle License Fee was created in 1935 as a 1.5% property tax on the purchase price of one’s automobile. Iconic Republican Gov. Earl Warren raised it to 2% in 1948. VLF revenues do not go to the state’s General Fund but rather local governments to pay for fire and police protection, keep libraries and parks open and sweep streets.

When the state had surplus tax revenue in 1998, the legislature offered car owners a temporary relaxation on their VLF.

The average 2% VLF was then $300. The “good times” tax break reduced the car owner’s responsibility to just $100 with the state’s General Fund picking up the remaining $200 so that local governments would continue to receive the entire $300.

At the time, this cost our General Fund around $5 billion annually. The deal was to continue as long as there were “sufficient general funds” to make up the difference.

In 2003, we faced a $38 billion deficit. Then-Gov. Gray Davis’ director of finance correctly determined that there were no longer “sufficient general funds” to continue the good times $5 billion relaxation on our VLF.

Candidate Arnold Schwarzenegger seized upon the issue, and the rest is history. On his first day in office, the new governor kept his campaign pledge and rescinded the restoration of the VLF, thereby spending $5 billion he did not have.

We are paying interest on the continuation of that tax cut today. Whether or not Schwarzenegger restores the VLF to its 1948-1998 level, he owes our General Fund an annual revenue stream worth $6 billion.

That $6 billion is the foundation of our budget imbalance. The independent Legislative Analysts Office has warned that we cannot grow our way out of that hole. Until that revenue is restored or replaced we will continue to underfund higher education, allow our precious state parks to deteriorate, and be forced to further borrow to shore up our aging infrastructure.

This current course is fiscally irresponsible and puts in place an expensive “baby tax,” for it is the next generation who will inherit our debt.

ASSEMBLYMAN MARK LENO represents the 13th District.