On Saturday, July 9th, I received my annual California vehicle registration notice for $111.
I am not sure what other states charge for an annual license and registration fee, but $111 seems a bit high. It is certainly a healthy deterrent against middle-income families owning more than one car in the state.
But I digress…
My problem with my registration fee is not the cost (though I still think it is high), but the payment deadline.
I received a bill from the state of California on a Saturday that is due this coming Tuesday. Of course, I cannot mail anything on Sunday.
In essence, if I had been on vacation for a short four-day weekend, I would surely have missed my deadline and had to pay a penalty.
If a credit card company charged someone 2,521% annualized interest for a bill that was three days late, politicians would be up in arms.
That is not a typo. I repeat, 2,521% annualized interest.
Yet in California, it is par for the course.
California’s fee for a 3-day late payment is equivalent to a 2,521% annualized interest rate.
Loan-sharking has always been a cash cow for such “illustrious” organizations like the mafia. Yet loan-sharking is illegal for private organizations.
However, in California, it is perfectly legal…so long as the government is in control of it.
Here’s the math:
So what, then, is behind these shell game shenanigans?
Well, according to the “Special Notice” I found in my billing envelope, California’s government passed legislation on May 4, 2011 that includes not sending a bill out 60 days in advance.
This little stunt enables the state to raise more revenue by levying higher and more aggressive late fees by reducing the time between the receipt of the bill and payment by 95%.
Furthermore, implementing this policy in the summer also increases the probability that people will miss their payments because they are away on vacation.
Also note that the 30-day grace period only applies to law enforcement giving traffic citations for driving with an expired registration. In other words, the fee still applies, but the state will mercifully not give you an expensive traffic citation on top of the additional fees for 30 days.
This little tactic is a very clever one, but it is also cowardly and shameless.
If California wants to increase taxes, it should increase taxes.
It should not hide behind juvenile techniques and subterfuge to increase state revenues.
The California legislature must think its citizens are stupid. And politicians wonder why people do not trust their government.