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# SM joins car tax lawsuit
- URL: https://www.smdp.com/sm-joins-car-tax-lawsuit/
- Published: 2003-12-18T16:00:00.000Z
- Updated: 2026-10-23T03:20:28.000Z
- Author: John Wood
- Tags: Government & Politics, Santa Monica, #archive-import

*$3.8 million annually hangs in the balance*

COUNCIL CHAMBERS — Santa Monica will join a host of California cities and counties suing the state for $4 billion in missing car tax revenue.

The City Council voted unanimously on Tuesday night to join the attack, sparked when Gov. Arnold Schwarz-enegger made good on his campaign promise to repeal the tax.

Council members described the lawsuit as unfortunate but important. They said Gov. Schwarzenegger should be held responsible for his campaign promise that local governments wouldn’t suffer from the tax cut.

Statewide, the cuts have cost government $4 billion. For Santa Monica, that means $3.8 million in missed revenue, said Steve Stark, City Hall’s director of finance.

Mayor Richard Bloom said both the legislature and Schwarzenegger need to work together and come up with the missing money, which is meant for the general fund and is typically used for police and fire budgets, and for other community services.

“This is a problem that the governor said he could solve, said he would solve and now he doesn’t really have a solution, and is simply saying to the legislature, ‘You fix it,’” Bloom said. “That’s not the kind of leadership that we’re expecting from the governor.”

Council members voted 6-0, with City Councilman Bob Holbrook absent, to join the lawsuit. Already three other cities — Los Angeles, Sacramento and San Juan Bautista — and 19 counties have agreed to sign onto the lawsuit, according to a press release issued Wednesday by the League of California Cities.

“Counties and cities up and down the state have either acted or are expected to act shortly to join the coalition effort,” said Chris McKenzie, executive director, in a prepared statement. “The league and CSAC will invite every interested city and county to join. Many will probably be joining in the days ahead.

“They’re all motivated by the same reality,” McKenzie added. “We can’t sustain these losses, and maintain the public safety and other services the public has a right to expect.”

With the lawsuit pending, officials said there also is a movement underfoot to draft a November ballot measure that would guarantee local governments get “every penny” coming to them under the state constitution.

Though retired finance director Mike Dennis anticipated the car tax may dry up, his forecasts were gloomy. If left alone, Dennis in March projected the deficit, which was $16 million this year, to grow to $28 million by 2005-2006.

It is unclear where exactly cuts will be made for next year, though workers are expected to be laid off and managers expect to be asked to trim their departments. Stark said his department is working on a five-year forecast that it will present at budget deliberations in late January or early February.

The dispute over car tax revenue predates Schwarzenegger. Several years ago, when the car tax was lowered, the legislature promised to “backfill” local governments from Sacramento’s coffers. But when the budget situation worsened earli-er this year, ousted Gov. Gray Davis again raised the tax to generate revenue.

Schwarzenegger repeatedly promised in his campaign to lower the car tax but make sure local governments weren’t hurt in the process. On his first day in office he repealed the tax, but so far has not been able to replenish the income lost to local governments. He has said he is pressuring the legislature to act.

Bloom said Schwarzenegger’s campaign promise was bold and added that he should be kept to it.

“The last straw, I think, for the City of Los Angeles and the counties that preceded us, was Gov. Schwarzenegger’s promises that local government would not be hurt by the repeal of the car tax,” he said. “I think that everybody wanted to take him at his word and now we see that there is no plan. He doesn’t have one.

> “I think that everybody wanted to take him at his word and now we see that there is no plan. He doesn’t have one.” — — MAYOR RICHARD BLOOM

“He’s throwing it back at the legislature to figure out and the only reason there is a car tax is because the legislature did-n’t have a plan.”

*Originally published in the Santa Monica Daily Press print edition on December 18, 2003.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/121803.pdf?ref=smdp.com)