Californians began temporarily paying a higher vehicle license fee in 2009, and it is set to expire June 30. But Democrats want to keep that higher rate intact.
Gov. Jerry Brown signed a bill to delay vehicle registration renewal notices, buying time to negotiate a state budget.
Californians with July or August stickers will have an extra month after their registration lapses to pay their fees, and the state would notify law enforcement to not ticket the nearly 5 million drivers with those tags.
Brown's office said in a statement that the law would help "avoid erroneous billing, double billing or other confusion while a budget deal is being crafted." Without the 60-day requirement, the DMV can wait to send out notices until lawmakers pass a budget, which they are constitutionally required to do by June 15.
The current vehicle license fee is 1.15 percent the value of the car, and it is supposed to drop to 0.75 percent in July. Democrats want it to stay at the higher rate, arguing that the additional money will help close the state's remaining $15.4 billion budget deficit.
The increased vehicle fee would provide an additional $1.4 billion to $1.7 billion each year.
However the Sacramento Bee is reporting that an unexpected $2 billion surge in tax receipts will help lawmakers close the gaping budget, which could complicate the governor's push for increases. Republicans are already against maintaining the higher license fee.
"It seems like we're jumping through enormous hoops to continue this myth somehow that we're not increasing taxes," said Diamond Bar Senator Bob Huff, who is vice chairman of the Senate Budget Committee.
The governor is expected to issue his revised budget plan May 16.
The Associated Press contributed to this story