Limited Taxation

Monday, July 19, 1999

Friday, July 16, 1999

Shutting down a cash cow


Some legislators want to raise Registry fees to pay for highway projects.


That is a violation of state law.

Some Massachusetts legislators think that the drivers are not paying enough to the Registry of Motor Vehicles.

The state needs more money to pay for Boston's Central Artery project -- the "Big Dig" -- as federal funds dry up.

There are other road projects that need money, too.

What better source to turn to, some legislators say, than the Registry.

The Registry generated $807 million in revenues for the state last year, including $375 million in license and registration fees.

Yet it cost only $60 million to run the agency.

The Registry is, in financial terms, a "cash cow."

But there could be more -- oh, so much more -- in that particular honey pot.

Some on the Legislature's Joint Transportation Committee want the Registry to reinstitute fees for the renewal of driver's licenses and auto registrations. Currently, those licenses and registrations that are in good standing renew for free.

Reinstituting fees of $33.50 every two years for registrations and $35 every five years for licenses would generate another $100 million a year for cash-starved legislators.

These are the same cash-starved legislators who are trying to figure out what to do with the $800 million surplus the state took in last year and the expected $500 million extra that is coming this year.

There's only one problem with this grand idea:

It's illegal.

State law says that fees collected by a state agency cannot exceed the cost of operating the agency that collects them. The taxpayer group Citizens for Limited Taxation sued the state in 1989 to enforce that law. The state settled out-of-court in 1991 by agreeing to let driver's licenses and registrations be renewed for free.

Now, based on information in stories in The Eagle-Tribune, CLT says it will go back to court to enforce that settlement if legislators try to reinstitute the fees.

Further, CLT warns it will target not just the reinstituted fees, but all the license and registration revenue the Registry generates above its $57.6 million operating costs -- roughly $300 million.

We'll take them one step further -- the state should stop -- right now -- using Registry revenues to pay for highway projects.

It is clearly against the law.

NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. For more information go to:

Return to CLT Updates page