NC House budget includes a 30 percent hike in DMV fees

House Republicans concluded Thursday that a proposed 50 percent increase in motor vehicle fees was too much for North Carolina motorists to swallow – but they decided that 30 percent was OK.

The full House debated the budget late into Thursday night, gave a preliminary approval by 94-23 just before midnight, and was on track to vote final approval after 1 a.m. Friday.

It had been revised in a committee during the afternoon to include the scaled-back provision for a 30 percent increase in Division of Motor Vehicles fees for nearly everything from learner’s permits to truck titles.

“After discussions within the (Republican) caucus, it was determined that they wanted to lower the impact of those fees,” Rep. Nelson Dollar, a Wake County Republican who oversees the House Appropriations Committee, said in an interview.

Dozens of House members were unhappy with the 30 percent fee hike. A motion to remove it from the budget was defeated 41-73 late Thursday night.

The House budget (House Bill 97) would raise the price of an eight-year driver’s license from $32 to $41.60. The annual renewal for a car registration – not including county property taxes, which are collected at the same time – would rise from $28 to $36.40.

The push to raise DMV fees for the first time since 2005 was the only big revenue increase in the budget. A few weeks ago, some House Republicans had proposed the 50 percent fee hike along with two tax increases that together would increase state transportation funding by more than $600 million a year.

Tax increases rejected

The proposed higher taxes on car sales and car insurance were scrapped last week. The DMV fee increase was scaled back Thursday, ending up with an additional $150 million for the state Department of Transportation.

If the House budget is adopted, DOT will spend the additional funds primarily on road repaving. The state ports at Wilmington and Morehead City also would receive $40 million for “modernization” projects over the next two years.

“It still raises revenue,” Dollar said. “ Just not quite as much.”

Republican budget writers proposed to divide about $160 million in repaving money equally among the counties over the next two years – with large and small counties each getting the same.

“I’m glad we’re able to do something for all 100 counties in this budget,” said Rep. Phil Shepard, an Onslow County Republican.

But Rep. Grier Martin, a Wake County Democrat, argued that it was wrong to hand out the money “regardless of population, regardless of how big geographically or small that county is, regardless of what the economic developmental needs of that county might be.”

After winning endorsements from several Republicans, Martin won approval 61-53 for his amendment to divide the repaving money according to which counties have more miles of deficient pavement.

The House transportation budget also would:

▪  Reduce the gas tax to 33 cents in January but keep the diesel fuel tax rate unchanged at 36 cents, adding North Carolina to the ranks of states that tax the two fuels at different rates.

▪ Send ferry toll receipts to the DOT bridge program, and begin paying for ferry vessel replacement and repair with bridge program funds.

▪ Take away the Board of Transportation’s authority to review DOT staff decisions about spending priorities in the Strategic Transportation Investment program for highway, bridge and other transportation construction.

▪ Ignore Gov. Pat McCrory’s budget request for $4 million to design and build new DMV headquarters.

▪ Set aside one-half percent of fuel tax collections to pay for dredging shallow draft navigation channels.

▪ Require continued sharp cuts in the work done by DOT employees for roadway design, environmental permits and right-of-way acquisition – and outsourcing this work to private contractors.

▪ Establish a new “DOT Report” program to increase DOT’s response to citizen concerns. DOT would have to repair potholes within two working days after they were reported.

This story was originally published May 21, 2015 at 8:47 PM with the headline "NC House budget includes a 30 percent hike in DMV fees."