Law enforcement agencies are among the beneficiaries of funds collected from vehicle license fees.

Vehicle owners in the state gained relief in 1998 when the Legislature slashed the annual vehicle license fee to 0.65 percent, after holding steady at 2 percent for 50 years.

With the deficits mounting last year, the Legislature voted to increase the fee to 1.15 percent for two years. That means a vehicle owner has to pay $115 for every $1,000 of a vehicle's value. The initial value is the purchase price, and depreciation is calculated for the first 10 years of a vehicle's life.

Unless the Legislature extends the hike for another two years, the increase will expire June 30, 2011.

The State Senate's president pro tempore, Darrell Steinberg (D-Sacramento), is the leading advocate for locking in the fee increase permanently in order to generate at least $1.5 billion annually for local law enforcement services.

If a proposition on November's ballot passes, then an $18 surcharge would be added to every person's vehicle license fee to pay for the operation and maintenance of state parks and beaches, which the governor has threatened to shut down in recent years.

Although implementation could be three or four years away, the Assembly could vote this summer to begin studying the idea of having electronic license plates. The Department of Motor Vehicles could possibly choose to finance the digital plates by making vehicle owners pay a sizable fee to avoid having advertisements displayed on them.