$10 Car Registration Fee Could Save You Money, Cost Schools

By Political Reporter Marshall Zelingerm.zelinger@krdo.comFollow me on Twitter at www.twitter.com/mzelinger

COLORADO SPRINGS – You’ll have a chance to vote for reduced car registration fees next year, but at whose expense? Proposition 101 will be on the November 2010 ballot.

A “YES” vote would limit government spending in a number of areas. Proposition 101 would set your car registration licensing fee at $10 per year. The ownership tax, which makes up the majority of your car registration amount, would be reduced over the course of four years to $2 for new cars and $1 for used cars. You would no longer be taxed on car rentals and leases. There would be a sales tax exemption for $10,000 of your vehicle’s cost. The state income tax rate would drop from 4.63% to 4.5% and eventually to 3.5%. All telecommunication taxes and charges, except for 911 charges, would be eliminated.

A “NO” vote changes nothing.

In July, vehicle registration fees increased. For the average car, your registration went up $32. By July 2010, it will go up another $4.50, making the fee $36.50. In July 2011, it will go up another $4.50, making the fee $41. Late fees of $25 per month, up to $100 also went into effect.

The new fee is on top of the licensing fee and ownership tax you already pay. The ownership tax makes up the most of your car registration. If Proposition 101 were to pass, your ownership tax would become $2 (for a new car) or $1 (for a used car) by 2014. Your licensing fee would be a flat $10.

“Obviously it’s going to be exciting for the customers because they only have to pay $10 for their registration,” said El Paso County Assistant Motor Vehicle Manager Cathy Driscoll. “Everybody would like to save money wherever they can in these economic times. What they don’t understand is who it is going to impact.”

For my vehicle, in May 2009 I paid $27.52 in licensing fees and $183.71 in ownership tax.

Do you know how your ownership tax gets spent?

In El Paso County, school districts get 70% of your ownership tax. El Paso County gets 11%. Service districts get nearly 8%. The city or town you live in gets 6.23%. Library districts get 4.67%.

“Your school district will collect money based on how many vehicles are registered in that specific school district,” said Driscoll. “This could be millions of dollars that they could be losing by having the registration fees reduced to $10.”

“I would rather pay less, it’s very expensive and it’s a hindrance once a year,” said Colorado Springs resident Rachel Ward. “That would impact the school district, that’s a catch-22.”

“I think that would be great,” said Colorado Springs resident Pete Cano about $10 registration fees. Cano, however, changed his mind after seeing how the ownership tax gets distributed.

“You know I’ve always been a supporter of the schools so looking at this, I suppose I’m okay with paying the money,” said Cano.

The Bell Policy Center, a non-profit, non-partisan think tank in Denver released an analysis of Proposition 101.

From Bell Policy Center:When fully implemented, the provisions of Proposition 101 would cut state revenue by at least:1. $1.2 billion in income tax revenues (rate reduced from 4.63% to 3.5%)2. $179 million in transportation revenues from elimination of FASTER fees3. $164 million in transportation revenues by cutting registration, license and title fees to $10 per vehicle4. $100 million in sales taxes from exempting $10,000 in vehicle value from sales taxes5. $22 million by eliminating sales taxes on rental vehicles6. $4.5 million in telecommunications fees by prohibiting all fees, except those to fund 911 services. Another $72 million that is used to subsidize telecommunications services in rural areas would be cut, but these funds go to a private escrow account and not the state.Total equals $1.7 billion (current value)