Truck Industry Predicts Exodus if License Fees Rise

By DAVID GREENBERG
Staff Reporter

Assembly Speaker Herb Wesson's bill to restore vehicle license fees to 1998 levels already has a vocal opponent and it's not the anti-tax faction of the legislature.

The state's trucking industry argues that the bill, introduced last week to help reduce the state's $26 billion budget deficit, will actually result in a loss of fees from truckers who will continue their mass exodus to states with lower operating costs.

Truck companies and independent owner-operators can register their vehicles in any state they operate in while continuing to haul freight through California.

The real shortfall, said Stephanie Williams, vice president of the California Trucking Association, would come as truckers leave in droves. "We'd like to see California truckers be able to afford California, not be priced out because they can't compete," she said.

Between 2000 and 2002, 250,000 trucks had their registration shifted out of state, she said. There are 390,000 trucks registered in the state, while another 1.3 million registered out of state haul goods throughout California.

Wesson, a Culver City Democrat, wants annual fees to increase to 2 percent of the value of a vehicle, up from the current .68 percent, to prevent massive layoffs of public safety personnel.

"The speaker does not like raising the VLF, but it's a small price to pay to keep firefighters and police on our streets," said Patricia Soto, Wesson's press secretary.

If approved, truck owners would pay $2,000, up from $675, for a new truck valued at $100,000. For a used vehicle costing $10,000, the fee would rise to $400, from $135.

Different segments of the industry would be hit in different ways: general freight operators would be at a competitive disadvantage to out-of-state operations paying lower fees, while intrastate drivers serving West Coast ports who are paid by the load would be unable pass on the additional costs.

"It's going to hit the port truckers the hardest because they get paid by the load," said Williams. "They are not in competition but that can't pass (increased fees) on. The shippers won't pay it."

Drivers serving the Ports of L.A. and Long Beach make as little as $50 per load to haul a container to a warehouse facility in Ontario.

While owner-operators might generate $70,000 annually, Williams said the pre-tax take-home pay can amount to as little as $30,000 after insurance, fuel and maintenance costs are factored in.

For reprint and licensing requests for this article, CLICK HERE.