Schwarzenegger Rescinds Car Tax Hike

SACRAMENTO -- Keeping his campaign promise, newly installed California Governor Arnold Schwarzenegger yesterday signed an executive order to repeal the state's new $4 billion hike of the state vehicle license fee.

Schwarzenegger signed the order shortly after his inauguration ceremony, which was covered by press around the globe. The executive order also calls for refunds. However, issuing refunds will require approval by the Legislature.

The vehicle license fee hike, approved by Gray Davis' administration in June, went into effect last month. The tax hike was a key issue during the campaign to recall Gov. Davis.

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