SACRAMENTO, Calif., Nov 17 (Reuters) - California Gov.-elect Arnold Schwarzenegger on Monday said he will repeal a scheduled $4.3 billion increase in the state's unpopular car tax, fulfilling a campaign promise within hours of taking office.
"As soon as I go inside the Capitol behind me I will sign my first order as governor," Schwarzenegger said in prepared remarks released to reporters before his inauguration as California governor. "I will sign executive order number one which will repeal the 300 percent increase in the car tax."
Repealing the increases, however, could swell California's huge budget deficit by another $7.4 billion next year, bringing the total to $17.8 billion, the state's nonpartisan Legislative Analyst's Office said in a report last week.
The decision has also made many local governments nervous as they depend on those revenues to fund police, fire and health programs. The governor elect has said he would not reverse the car tax at the expense of local governments but so far has not detailed how he would avoid doing so.