David Chiu's Proposed Vehicle License Fee Could Net City $70M -- But Requires 'Hail Mary'of a Senate Bill to Pass

These guys could make San Francisco lots of money
The Vehicle License Fee proposed this week by Supervisor David Chiu could net the city as much as $70 million. And the lottery ticket you bought this week could net you $70 million, too.

Okay, that's a bit of a stretch, and the VLF won't benefit local liquor stores. But just as a billiards shot grows ever less likely with each additional ricochet, the city's would-be windfall requires a number of interlocked events to come to pass -- and all of it centers around the passage of a Senate bill already vetoed by the governor in 2006. Its current chances were assessed as "probably a Hail Mary" by Assemblyman Tom Ammiano.

Perhaps that's why Chiu's legislative aide, David Noyola, emphasized that the city isn't counting its money yet. "But we feel that if we were to put something on the ballot locally and it were to pass, the local electorate might help in the effort to get the bill approved at the state level."

Whether San Franciscans will approve a measure that would cost them hundreds of dollars apiece remains to be seen, however. Americans, naturally, are all in favor of more government services, but not so fond of paying for them. Also, lots of us believe in angels.

Here's what has to happen for the city to get its much-needed millions:

The bill in question is SB 10, authored by the city's own Sen. Mark Leno. This is Leno's third crack at allowing cities to re-establish the Vehicle License Fee abolished by  Gov. Arnold Schwarzenegger; his first attempt was vetoed by the governor in 2006 and his second died in committee.

Leno's bill would give San Francisco and other counties the right to set the VLF at the level it stood from 1948 to 1998 -- before Gov. Gray Davis abolished it because the state was so flush with dot.com dollars (it feels like a long time ago -- because it was). Back then, folks paid 2 percent of their vehicle's market value to their municipalities annually; for purposes of estimation Leno sets the average value at $300 a vehicle. The VLF was subsequently re-established by Davis when the state ran out of money, but Schwarzenegger made it his first call of order to nix it once again. Since the state was mandated to compensate counties for lost revenue, that resulted in a $40 billion drain from California's coffers -- "Isn't it interesting that we're now looking at a $40 billion deficit over the next 18 months?" Leno says.

If Chiu and his colleagues decide to set the VLF at half its previous rate, Leno estimates the city will gain $34 million. Going back to the 1998 rate should rake in $70 million.

For this to happen, San Francisco's Board of Supervisors would have to agree by a two-thirds majority to place the VLF on the ballot for the special June election. Voters would then have to agree to stick themselves with hundreds of dollars in fees -- and did anyone mention that there's a recession on? Then SB 10 would have to pass, by simple majority, through the State Senate. And then the bill would have to be signed by a governor who has already spat on it once (though Leno hopes support this time around from the San Francisco and Los Angeles Chambers of Commerce will make a difference -- "those are the kind of voices the governor listens to."). There's a lot of ricochets in that pool shot, and only one of them has to peter out to ruin the whole thing. Leno's best-case scenario is that his bill becomes the law of the land by January, 2010.

"Because the fiscal crisis is as great as it is, we're not in the situation we were when the governor vetoed the bill two years ago. And businesses that didn't support the VLF earlier do now," Leno says. "I am hopeful."

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