While some might have thought the federal bailout dollars for GM and Chrysler would trickle down to local dealerships, that hasn’t been the case for many dealerships, which can’t acquire loans to operate during the credit crunch if they’re spurned by both banks and the parent car company.

Some cities achieve a large part of their tax base from the money generated in sales taxes from each new car purchase; the cities would face a crunch without the sales tax revenue, so they’re loaning the dealerships money in their own version of the federal bailout. For example, Victorville, California extended a $200,000 loan to a local Chrysler auto plaza that generates half the town’s sales taxes (the town doesn’t have a property tax).

In the NPR comment section, Chartreuse Jones of Portland, Oregon notes: “I guess I missed the part of the story where giving the dealerships money somehow means that people will miraculously start buying cars again (and therefore generating sales tax income).”

Victorville City Councilman Terry Caldwell : “How do you say no the next company? If you help one, from a competition standpoint, do you have an obligation to help others?”

City Councilwoman JoAnn Almond: “I voted against it for one reason. There’s so many car dealers and businesses having a hard time right now and I don’t feel it’s fair to give a loan or bailout, so to speak, to one and not to others.”

The owner of the GMC/Pontiac dealership in Victorville said that he had not considered asking the local government for money, and he didn’t like to be in debt.

Councilman Mike Rothschild said he’s against the bailouts on a national level, but he feels that the local city should make an exception in this case.