A 1997 law allowing for refunds when residents turn in a license plate before the registration expires will cost the state more than $5 million this year.
Assembly Transportation Committee members were told Tuesday that the estimate doesn't include the $1.5 million cost expected for processing those refunds and issuing and mailing the checks.
The statements were made during a hearing on AB30, which, if passed, would repeal the refund law. Dennis Colling, chief fiscal officer for the Department of Motor Vehicles, said in calendar 2001 and 2002, the program cost more than $2.3 million from the Highway Fund and $5.9 million in governmental services revenues that could have gone to cities, counties and school districts.
"We're issuing more than 400 check refunds a day, and it's projected at the current rate of increase to be over $5 million in calendar 2003," Colling said.
Bill sponsor Assemblywoman Kathy McClain, D-Las Vegas, pointed out that if local school revenues fall short, the state is legally obligated to make up that shortfall so the state must also pay part of the local share of the loss.
Kim Huys of the Controller's Office said the law requires a check be issued, no matter how small the refund: "We do in fact issue checks for one penny."
Huys said while the average check is $49, more than 9,100 of the 101,019 checks issued last year were for less than $1.
She said it costs the state probably an average of $15 to process each of those checks between her office, the treasurer, DMV and the state mailroom -- about $1.5 million a year.
"This is costing us money," she told the committee.
McClain said the bill would eliminate the cash refunds, but would still allow someone selling one vehicle and buying another to apply the remainder of his or her annual registration to the new vehicle.
Assemblyman Don Gustavson, R-Sun Valley, said he doesn't think the state should try to eliminate the refunds.
"In all fairness to my constituents, they'd like to have that money back," he said.
