Custom Tag Sales Dented by Higher Fees
The new fees Florida lawmakers slapped on motorists last fall are now threatening to slam the brakes on a host of programs financed by specialty license tags – a voluntary purchase many drivers are ditching to save money.
Higher rates for new license tags, renewals, vehicle registration fees and other services climbed Sept. 1, with lawmakers relying on the extra cash to plug a nearly $500 million hole in last year’s budget.
But advocates for the state’s 114 specialty license tags say it wasn’t long before the higher rates prompted motorists to steer clear of their plates, which suddenly became a costly, discretionary purchase they could live without.
Specialty tag sales fell 67 percent statewide in November through January – which sponsors say could wind up costing the nonprofits, charitable organizations and public agencies that rely on the tags millions of dollars over the course of a year.
“It’s not the economy, because we were doing well through last summer – right until the new fees kicked in,” said Michael Towner, a Boca Raton marketer who got lawmakers to approve the state’s ‘Imagine’ and ‘Support Soccer’ tags. “But once a specialty tag became so expensive, the demand just dropped off.”
The cost of getting a specialty tag climbed along with the new fees. While organizations benefitting from the tag collect between $15 to $25 per plate – a rate unchanged – the state’s cost of issuing a new plate has jumped to $33, up from $14 formerly. That means obtaining a new ‘Save the Manatees tag, University of Florida plate or any of the other many specialty tags available now can cost as much as $58 each.
Martin Boire, chairman of the Daytona Beach-based Support Our Troops organization, which helps finance a range of programs for Florida troops stationed overseas through the tag, said tag sales declined from 528 the last four months of 2008 to 194 during the same period last year, after the new fees kicked in.
“People may still want to give us $25 for our tag, but with the new fees it’s turned out to be too costly for a lot of drivers,” Boire said. “For us, it means we can’t rely on the money we had been taking in and have to turn to some of the other programs we run to keep things going.”
Lisa Roberts, executive director of the Florida Wildflower Foundation, said the sudden sales wilt – a 75 percent decline for her organization’s tag – is likely to cost $100,000 this year. Programs the foundation runs that include research, planting and promoting eco-tourism will likely have to be scaled-back, she said.
“It’s our only source of revenue,” Roberts said. “We’ve got some phenomenal things going on. But a lot of them just aren’t going to happen without the dollars coming in.”
Most of those promoting specialty tags said lawmakers likely didn’t envision the sharp decline in sales. But Sen. Don Gaetz, R-Niceville, a co-sponsor of legislation (SB 2036) that would roll back most of the fees approved by lawmakers last spring, said it shouldn’t prove a surprise.
“I didn’t study economics in college, but I walked by the classroom once,” Gaetz said. “When you raise the price on a discretionary purchase in the middle of a recession, you’re going to see demand for it drop.”
Gaetz called the decision to embrace the fee hikes “ham-handed and thoughtless.”
Rep. Ron Saunders, D-Key West, is sponsoring similar fee rollback legislation (HB 99) and says he’s proud that House Democrats united last spring to vote against the increases.
“The amount of the increases were shocking and now we have to deal with the unintended consequences, like seeing the specialty tags decline,” he said.
While 81,782 specialty plates were sold in Florida the last two months of 2008 and January 2009, the comparable period at the end of the year and last month saw only 26,670 tags sold. Saunders and Gaetz acknowledge that their rollback proposals are long shots, but representatives of the specialty tags say they hope some steps could be taken during the legislative session to soften the impact of the new fees on them.
The specialty tag decline is not the only fallout from the new fees. The Department of Highway Safety and Motor Vehicles earlier this month told a Senate committee that the agency was in a financial hole this summer caused by lawmakers’ decision to delay until Sept. 1 the launch of the higher-priced fees.
Since then, overall vehicle registrations have slumped about 1.5 percent, in part because of the recession, the department said. Insurance companies and rental-car agencies also have reduced their requests for driving records to avoid the higher fees, reducing collections flowing to the state, DHSMV officials said.
Among the increases approved last spring, lawmakers boosted the cost of renewing a driver’s license from $20 to $48 and hiked the cost of registering a new car from $100 to $225.