Gov. Jerry Brown wants to give drivers a $5 discount for avoiding Department of Motor Vehicles offices when they renew their registration, but the state's top fiscal analyst questioned the plan Friday as a money loser.
Drivers would save $5, dropping the renewal rate from $43 to $38, if they register by mail, phone, online, auto clubs, private vendors or self-service terminals. Brown says this would cut wait times and congestion at DMV offices.
But in its review, the nonpartisan Legislative Analyst's Office says the proposal would result in $75 million in lost revenues in 2012-13 and $100 million annually thereafter. Meanwhile, the state would ultimately lose only 25 positions for $706,000 in annual savings. It would not affect the state's general fund budget -- for now, at least -- but instead the special Motor Vehicle Account that pays for DMV operations and is funded largely through registration fees.
"We concur with the administration's objective of reducing the number of registration renewals performed at field offices," the Analyst's Office wrote. "We are concerned, however, that the Governor's approach to changing customer behavior would permanently reduce MVA revenues."
The LAO report contains some interesting data on DMV vehicle registrations. Each registration at a DMV field office costs $14.74, the most expensive option, compared to $3.04 at an auto club, the cheapest route. At $5.93, online renewals cost more than mail renewals, which run $3.57.
Mail remains the most popular renewal option, projected to generate $408 million. Field office renewals and online renewals are about the same, generating $272 million and $273 million respectively.
Instead of the governor's plan, the analyst's office suggests the state use a carrot-and-stick approach to discourage people from DMV office visits, with the stick being harsher. It recommends that the state increase the registration fee from $43 to $50 for those who renew in person and reduce the fee from $43 to $41 for those who choose other options. That would result in a minimal revenue loss of roughly $1.8 million, according to the LAO.
PHOTO CREDIT: Robert Bland of Sacramento waits briefly in the first line at the new Department of Motor Vehicles office in south Sacramento on Aug. 17, 2006. Sacramento Bee file / Randall Benton