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Proposed DMV fee hikes called a “double whammy” for Travis County

Wednesday, April 6, 2016 by Caleb Pritchard

The Travis County Tax Office is sounding the alarm over potential changes at the state level that could cost the county and vehicle owners an extra $1 million in registration and titling fees.

Tax-Assessor Collector Bruce Elfant showed up in downtown Austin on Tuesday to explain to the Travis County Commissioners Court how the Texas Department of Motor Vehicles is considering a potential “double whammy” that will drive up costs while also slowing down service.

Elfant explained that most fees for vehicle owners would go up, while the money the DMV reimburses to the county for processing the services would decrease. Additionally, the DMV board is considering capping fees that private automobile titling companies could charge, a change that industry representatives say could drive them out of business.

According to Elfant, private businesses process “about a third of the 300,000 auto titles and about 10 percent of the 875,000 vehicle registrations” that move through the county.

“It’s a free market model,” Elfant said, before describing the choices the arrangement affords residents. “People can go to the title companies and pay a little bit more to wait a little bit less, or they can come to the tax office and pay a little bit less and wait a little bit more. It’s certainly their choice, and it’s worked for us for 50 years.”

If the title companies were no longer an option, the tax office would have to absorb the hundreds of thousands of records those companies process. To keep up with that level of demand, Elfant told the court he would have to hire 17 new full-time employees. Just in additional salaries, and not including office space, supplies and other considerations, those new positions would cost the county an extra $1.44 million per year.

Members of the court met Elfant’s message with palpable discomfort.

Commissioner Gerald Daugherty said he understands a state agency’s need to find ways to raise revenue. “But what I don’t understand is why they would impose something that would be so critically damaging to the private sector,” he added.

Commissioner Brigid Shea was even more direct in her criticism. “This is not an unusual occurrence where local governments are being forced to pick up additional burdens and costs because of state actions, and then the state turns around and says, ‘Bad local governments. You’re raising taxes too much,’” Shea said. “They’re putting us in an impossible situation if they’re not even allowing the private sector to continue helping out by providing this service. I find this just completely unacceptable.”

Weighing the new fees for vehicle owners as well as the extra burden the county could face, County Judge Sarah Eckhardt offered a distilled analysis of the situation as she sees it.

“Normally the way this gambit works is the Legislature, rather than engage in an enlightened conversation about appropriate taxation, instead institutes a fee which is incredibly regressive and then increases the fee in order to fund things that everyone needs but not everyone has the same ability to afford,” said Eckhardt. “And then they externalize the cost of collecting the fee to their county counterparts and internalize the revenue.”

After hearing from the members, Intergovernmental Relations Coordinator Deece Eckstein told the court that he would be taking up the issue with the Texas Conference of Urban Counties later this week. Elfant added that he is working with the Texas Association of Counties, particularly with the larger counties that will be similarly burdened by the changes.

Shea motioned to send an already drafted letter to the board of the DMV. After laying out the concerns expressed by Elfant and the members of the court, the letter concludes: “We believe the proposed rules should be shelved and your staff directed to work with tax offices and other stakeholders to fashion a more reasonable proposal. We also recommend that you fashion a Legislative Appropriations Request (LAR) for the next session that reflects the true costs of running the TxDMV and does not impose unfunded mandates on local governments.”

Shea’s motion passed with unanimous support. Whether it will convince the DMV board, which meets on April 7, remains to be seen.

Photo by Micah Sittig made available through a Creative Commons license.

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