DMV’s license to shakedown

by E.J. McMahon |  | NY Torch

Governor Andrew Cuomo’s proposal to issue a new generation of motor vehicle license plates carrying a mandatory one-time $25 replacement fee is raising some questions about the background of the law authorizing his action.

Under the plan, announced August 18, drivers “with license plates that are 10-years-old or older will be issued new plates” beginning in April 2020. The Department of Motor Vehicles (DMV) will charge $25 per set of plates, plus $20 for vehicle owners who want to keep their current plate number. The governor’s news release estimated that 3 million vehicle owners will be renewing their registrations in the coming biannual cycle, which would translate into $75 million in additional gross revenues for the state.

Where does the fee come from?

Section 401(3)(a) of the Vehicle & Traffic Law includes this sentence:

An additional fee, not to exceed twenty-five dollars, shall be paid to the commissioner whenever a set of reflectorized number plates is issued for any vehicle for which a registration fee is normally charged except that, with respect to any number plate which is specifically requested by the applicant, such fee shall be paid to the commissioner upon approval of such request. [emphasis added]

The first half of that sentence authorizes a fee of up to $25 for any set of new plates—which clearly means the DMV (which answers to the governor) has discretion to set a lower fee. The second half is the apparent statutory basis for DMV’s added fees for personalized plates (now $60 initially and $31.25 a year thereafter) and the $20 fee to retain a number.

When was the fee enacted?

The $25 maximum fee was authorized in a budget bill passed under Governor David Paterson in 2009.  That language, in turn, amended a prior law authorizing a fee of up to $15, which had been enacted as part of the state budget in 2003, over Governor George Pataki’s veto, by the then-Republican Senate majority and Assembly Democrats. The new plate fee apparently originated—at the minimal level of $1.50 plus cost—among the budget gap-closing revenue raisers adopted 1991 under Governor Mario Cuomo.

Why is the state planning to start requiring new plates in 2020?

State law makes drivers responsible for keeping their license plates “clean and in a condition so as to be easily readable” (VTL 402(1)(b)). Otherwise, the frequency of new plate issues is totally within the discretion of the governor, whose press release said new plates must be phased in over the next 10 years because “many” plates now in use “are damaged, oxidized and peeling, making it difficult or impossible to read the license plate number.”

“Having a license plate that is legible reduces a motorist’s risk of being pulled over and cited for having an illegible license plate,” the press release added. 

Has this been done before?

As further detailed in this Wikipedia entry, New York’s most recent mandatory license plate changeovers came in:

When the new plate fee was created in 1991 and increased in 2003, the state didn’t immediately cash in by changing its license plates; instead, the fee applied only to plates issued for new registrations.

Paterson, by contrast, had initially planned to immediately raise an additional $129 million by requiring all vehicle owners to acquire the new “Empire Gold” generation of plates in 2009-10. In the face of public objections stirred up by Republican lawmakers, he backed off that plan and instead mandated new plates only for new registrations. Some 3 million cars, trucks and other vehicles still carry the white-and-blue 2001 generation of license plates.

Lawmakers concerned about Cuomo’s plate-replacement push have the option to amend the Vehicle and Traffic Law to restrict DMV from charging drivers anything more than the cost of manufacturing plates, which state Sen. James Tedisco (R-Schenectady) estimates at $2.30 per pair.

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.