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Panel Approves U-Turn on Driver Fee Hikes

A bill that would reverse several fee increases on driver licenses and vehicle taxes that were used last year by lawmakers to pave over a $3 billion hole in the state budget was approved by the Senate Transportation Committee Wednesday.

The measure (SB 2036), sponsored by Sen. Don Gaetz, R-Niceville, was approved by the panel quickly with little debate, which the chair of the meeting attributed to lawmakers realizing they had made a mistake by hiking the fees last year.

“I can tell you that in other states, there’s been governors who have lost their races because they raised auto tag fees in the past,” Sen. Carey Baker, R-Eustis, who lead the meeting in the absence of the panel’s chairman, told reporters after the vote. “In hindsight, that was probably a poorly chosen fee, which you and I know is actually a tax, so we’re trying to address that.”

With last year’s decision to raise the fees, renewing a driver's license went from $20 to $48 and registering a new car jumped from $100 to $225. Lawmakers also boosted the amount of money going to the state from the sale of specialty license plate from $14 to $33, meaning that with organizations collecting between $15 to $25 per plate, a specialty plate could cost nearly $60.

In addition to returning the prices to previous levels, SB 2036 would also credit drivers who paid the higher fees between Sept. 1, 2009 and August 2010.

State transportation officials have told lawmakers that registrations have been off about 1.5 percent and specialty tag sales fell 67 percent statewide in November through January, which Baker said was on the mind of the panel as it approved the bill as much as the potential that the fees upset the voters they will have to face this year.

“It didn’t look so good last year either,” Baker said when asked if the current election year influenced the decision to roll back the fees. “It showed that tax and fee increases do change behavior. We’ve seen up to a 70 or 80 percent loss of sale of specialty tags, because we raised those fees. All the non-profits, including governmental entities that benefit from the specialty tag sales -- it’s going to hurt them dramatically. Hopefully this will encourage more folks to support their favorite charity.”

And Baker said he hoped lawmakers would continue to look at reducing the driving fees after they put the brakes on the 2009 increases.

“It’s not restoring it to where it was, but 25 percent or 30 percent reduction is significant,” he said. “I’m hoping that next year maybe we’ll be able to whittle this down, but it’s a good strong move in the right direction as far as the taxpayers are concerned.”

Despite the Transportation Committee’s fervor for rolling back the fees, lawmakers are facing a shortfall that’s similar to the one that prompted them to hike the fees in the first place last year. Baker said he was not sure how lawmakers would replace the roughly $320 million that staff has said rolling back the fees would remove from the budget and the push to reverse them has not accelerated much in the House.

Instead of looking at driving fees, the House Transportation Committee has focused instead on the Transportation Trust Fund, proposing a $428 million sweep, which would include resurrecting a recurring 8 percent surcharge on the fund that uses gas tax collections to pay for roads.

But Baker said that the House might be compelled to reconsider the fees by the forthcoming elections too.

“Last year we enacted two taxes or two fee increase – one was cigarette tax one was auto tax,” he said. “I think this is a way to address one of those issues.”

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