Lawmakers in the California Senate have approved a bill that will allow counties to raise and collect vehicle license fees.
SB 223, if passed, would let the Board of Supervisors in each county put the ordinance on the ballot to raise the fee on vehicle owners.
The counties would be able to pass an increase that would make up the difference between the historic 2% state rate and the current rate.
Since May 2009, the tax rate has been 1.15% of the value of a vehicle. But by 2012, when this bill could become law, the tax rate will be back to 0.65% and counties could collect the 1.35% difference, according to an legislative analysis of the bill.
Currently, state law imposes the vehicle license fee instead of a personal property tax on vehicles.
California municipalities regularly use vehicle license fees to back bonds.