SACRAMENTO, Calif. - Steeper vehicle licensing fees could seriously affect taxicab, limo and delivery service businesses that are already struggling to survive in a tough economy, local business owners said.
State lawmakers have raised the fee for licensing vehicles in the state from 0.65 percent of the vehicle's value to 1.15 percent, which for a $40,000 car jacks the cost to $460 from $260. The move is projected to generate $1.5 billion. Officials said a portion of the fee will be dedicated to local law enforcement.
But local business owners say the fee increase has broken their spirit at a time when survival is a challenge.
Taxicab and limousine operators say they will particularly feel the pinch because they operate fleets of vehicles for which they will have to pay up more in licensing fees.
Burt Ramirez, owner of Coastal Taxi in Laguna Beach, said the cost of operating his 10 taxis and two sedans is going to go up even more now.
"It's crazy," he said. "We're not getting any breaks here. The money we pay to the county for permits and to the individual cities to be able to operate has just taken our operating costs through the roof. This is one more cost increase that we'll have to deal with. It's too much."
Ramirez, however, added that he is relieved the budget does not include the 12 cents per gallon gas tax increase.
"Now that would've killed us," he said.
Limo companies, which have already been hurting because of the economic downturn, will be among the worst hit because of this fee increase, said Ron Sorci, president of the National Limousine Association.
"Most of our industry is having a tough time because revenues have suffered dramatically," he said. "Any added expense is a thorn on their side and presents just more of a challenge to survive."
Zara Booes, co-owner of Crystal Limousine in Orange, said she is not happy about having to pay thousands of dollars in additional fees to keep up her fleet of 50 limos.
"We're barely keeping our head above the water," she said. "We have lost 20 percent of our business in the last one year because most of our clients are corporate and they're not doing well either. This fee increase is just disheartening."
The vehicle licensing fee increase is also going to add to the burden of companies that provide delivery service from pizza parlors to couriers and florists.
Ted Robinson, owner of Visser's Florist in Anaheim, said he may have no choice but to pass on the increase to his customers. Deliveries account for 70 percent of his business, Robinson said.
"We're going to have to put that on our delivery fee," he said. "But I can't stop delivery of flowers because it's a great service and it's a service that is in demand and valued by our customers."
Robinson's store operates eight delivery vans. He said so far 14 florists have closed their doors in Orange County because of the poor economy.
"I've been in business 52 years and this is the worst I've seen," Robinson said. "What we need now is help not more fees."
Source: Orange County Register