CITIZENS   FOR  LIMITED  TAXATION  &  GOVERNMENT

 

CLT Testimony
Against Registry of Motor Vehicle
Fee Increases


State House News Service
Tuesday, April 25, 2000

Daily State House Schedule

11:30 ... Executive Office of Administration and Finance holds public hearing on Gov. Paul Cellucci's plans to end the phase-out of driver's license renewal fees. Cellucci is administratively stopping the plan started by former Gov. William Weld to ensure the state has enough money to pay for the Big Dig cost overrun ... Room 373


CITIZENS
for
Limited Taxation

TESTIMONY

To:   Executive Office of Administration and Finance
        Melissa Cummings, Legislative Director
        Tuesday, April 25, 2000

Re:   Registry of Motor Vehicles Fee Increases

In our 1989 lawsuit challenging the Dukakis fee increases (Ford et al. v. Secretary of Administration and Finance Edward Lashman, Suffolk Superior Court #89-2288-C) we pointed out that the definition and proper use of fees was established in a previous case before the state Supreme Judicial Court, Emerson College v. City of Boston, 391 Mass. 415 (1984).

In February of 1991, the Weld administration agreed to settle our lawsuit out-of-court: to review all fees and adjust them to reflect solely the cost of providing the service, as required by the Emerson decision. Thus, Registry of Motor Vehicle (and other) fees were lowered or removed.

If the Secretary of Administration and Finance and the Legislature violate this settlement and renege on our agreement, it will leave CLT with no option but to return to court and reopen our lawsuit.

All parties should understand that CLT will then be forced to target not only the proposed new RMV fee increases -- but the hundreds of millions of revenue dollars above the legally permissible $57.6 million operating cost for providing the service.

In Emerson, the court noted that there are generally two types of fees:

  • "User fees, based on the rights of the entity as proprietor of the instrumentalities used, or;

  • "Regulatory fees (including licensing and inspection fees), founded on the police power to regulate particular businesses or activities."

Further, the court found, there are "common traits that distinguish them from taxes," as summarized below:

  • "... they are charged in exchange for a particular governmental service which benefits the party paying the fee in a manner 'not shared by other members of society,'"

  • "... they are paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge," and

  • "... the charges are collected not to raise revenues but to compensate the governmental entity providing the services for its expenses."

An exposť‚ last year by the Lawrence Eagle-Tribune ("No competition, no regard," by John Macone, July 5, 1999) indicated that the Registry of Motor Vehicles still is violating the law and ignoring our out-of-court settlement.

The Eagle-Tribune reported: "With $807 million in revenue last year, it is the second-biggest generator of money for the state ... outdone only by the massive state Department of Revenue, which collects income and sales taxes. That income represents about 8 percent of the state's entire budget of $20.5 billion."

Its follow-up editorial noted: "The agency rakes in $14 in revenues for every $1 it spends on operations -- $807 million last year on a budget of $57.6 million."

Discounting that $438 million of that $807 million in last year accounts for auto sales/use taxes collected by the RMV, this still leaves $369 million in Registry revenue.

Certainly this amount already grossly exceeds any reasonable cost for providing the service, as the court defined the criteria in Emerson.

Under the Emerson decision, fees charged to administer drivers licensing and auto registration clearly cannot be diverted to road and bridge construction costs or anything else (ie., the state Highway Fund benefits non-drivers via mass transportation projects, and non-state residents who regularly use the state's roads, so by law cannot be funded by fees).

Registry fee increases are clearly illegal when the publicly stated purpose for the additional revenue is to bail-out Big Dig "cost overruns."

Before you approve any Registry fee increase, please recognize: Any fee increase is also your invitation for us to reopen CLT's lawsuit.

Thank you for your attention.


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