Limited Taxation
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CLT Update
Monday, July 12, 1999

Today the following memo is being sent to every member of the Joint Committee on Transportation and to members of the State House news corps. Tomorrow it will be hand-delivered to every member of the Legislature.

CFord-Sig2.gif (4854 bytes)

Chip Ford

--------------------  MEMO  --------------------

To:  Members of the General Court
       Monday, July 12, 1999
Re:  Registry of Motor Vehicles Fee Increases:  CLT Will Go Back to Court

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 SJC, 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, the RMV (and other) fees were lowered or removed.

If the Transportation Committee and 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.

Legislators should understand that CLT will then be forced to target not only the proposed $100 million "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:

1.  "... 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,'"

2.  "... 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

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

A recent exposť‚ by the Lawrence Eagle-Tribune ("No competition, no regard," by John Macone, July 5) indicated to us 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 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).

There is no doubt that the proposed Registry "fee" increases are illegal, when Rep. Joseph Sullivan (D-Braintree), House Chairman of the Joint Committee on Transportation, blatantly stated: "There's agreement in the joint committee to do a revenue stream associated with the Registry. We have obligations beyond our current financial capacity. That's today's reality. We need to have other revenues available so we can do projects in all four corners of the Commonwealth." (State House News Service, July 9)

Before you cast a vote for Registry fee increases, please recognize:   A vote for fee increases is also a vote to reopen CLT's lawsuit.


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