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Budget cuts drive states’ DMV changes

Drivers going to the department of motor vehicles will likely face longer lines and higher service fees in several states as recession-ravaged budgets force the shutdown of branch offices, a reduced work force and the need to raise revenue.

California, Massachusetts, New Jersey, New York, Nevada, North Carolina and Washington are among those states where funding cuts have closed some branch offices. Several states are also managing department cuts through layoffs, hiring freezes and furloughs.

Massachusetts is responding to a $13-million shortfall by eliminating 11 of its motor vehicle offices in high-rent privately owned buildings, including a branch in Boston’s Chinatown that serves 290,000 customers annually. To cover the loss, the agency plans to open five other offices, including a new one in Boston.

North Carolina ordered a hiring freeze and eliminated overtime for state employees, which has resulted in understaffed locations that on some days have to shut down completely if anyone calls in sick. The department also shortened the business day for customers.

Connecticut, in a stalemate over state budget negotiations, is considering closing its motor vehicle department and instead providing self-service kiosks in AAA offices, grocery stores or malls – a move Democratic lawmakers say would help ease the state’s $8.55 billion deficit.

If passed, all 700 department employees would be moved to the agencies of consumer protection, environmental protection and public safety, all of which would then share department responsibilities. This integration of motor vehicle departments with larger state agencies, such as transportation, is already practiced in 31 states.

The cuts by lawmakers in some states are seen as a major setback to an agency that has boasted efficiency in recent years because of improved technology and online services.

“In some ways, it certainly is (a setback),” said Margaret Howell, spokeswoman for North Carolina’s department. “We have been unable to keep our efficiency up and our wait times down.”

Nevada shut down three offices, two of them express locations, saving the agency $1 million, but causing longer waiting times and slowing the agency’s planned expansion of self-service kiosks. “We eliminated 132 positions, travel and certain training programs,” said Tom Jacobs, spokesman for Nevada’s department. “Basically, we cut down to the bone.”
Even in Virginia, where the department is self-funded, the recession has cut into the department’s revenue from new vehicle registrations and driver’s licenses, because fewer people are buying cars or moving to the state.

Staff layoffs are considered a last resort for many agencies, but some states, including Nevada and Virginia, have gone that route, and Massachusetts will also likely cut staff. New Jersey, Colorado, Connecticut, Illinois and Virginia have ordered hiring freezes, which means leaving positions unfilled if an employee quits or retires, piling more work onto the remaining workers.

Other states, including California, Wisconsin, New Jersey, Colorado, Nevada, Illinois and Connecticut, have forced employees to take furloughs, or mandatory days off without pay.

California’s furloughs for all state employees during the last three Fridays in July caused motor vehicle offices to shut down, leaving fewer days for customers to come in and resulting in longer lines on days the agency was open. In Nevada, state workers were allowed to choose one day a month to take a furlough.

While already cash cows, some motor vehicle departments are raising driver’s license and vehicle registration fees to generate even more revenue.

“In many cases, state DMVs do the business of a Fortune 500 company every day, although most of the revenue received goes into the state’s general fund and not to the DMV,” said Jason King, spokesman from the American Association of Motor Vehicle Administrators.

The Massachusetts motor vehicle department is the second-highest revenue-generating government agency in the state, bringing in $1.4 billion to the general fund last year. The department has increased its commercial fees and will implement higher licensing and registration fees.

Colorado raised registration fees to help cover the cost of bridge and road maintenance, an unpopular decision that has prompted the department to hire off-duty police officers to keep the offices safe. California raised its vehicle licensing fees in May to help reduce the state’s $42 billion budget deficit. Its department earned $6.6 billion in revenue last year, with the proceeds going to the department, to surrounding municipalities and to the California Highway Patrol.

Nevada, Florida, Virginia, Vermont, New Jersey, New York and Illinois have also increased fees.

Officials say matters could be worse if customers didn’t have the option of doing business online, which they have been pitching to citizens for years. “Dealing with the budget constraints helps us go in the direction we were planning: delivering government services through technology,” said Ann Dufresne, spokeswoman for the Registry of Motor Vehicles in Massachusetts.

The American Association of Motor Vehicle Administrators has been campaigning the phrase “out of line, and online” to encourage customers to use more online resources, from renewal of licenses, IDs and registrations to changing an address and registering to vote. Other states allow customers to schedule driver’s tests appointments online or view wait times at various locations.

Mark Milaw, an Arlington, Va., driver, said the state Web site was fast and easy to navigate. “I forgot I could renew my driver’s license online, so I came into the office this time,” he said.

Massachusetts processed about half of its transactions online last year. But while half of those whose licenses expired in February were eligible to have their cards renewed online, only 11 percent did so.

In Illinois, online transactions have increased by 78 percent, and the District of Columbia’s department shut down its Brentwood location because all the services it provided could be processed online, the agency said. Last year, California processed more than 5 million vehicle registrations over the Internet.

Conversely, Iowa shut down its Web site more than five years ago because it had cost too much to maintain, considering the low number of people who used it.

“I prefer to come to the DMV,” said Sophie Lantz, an Arlington, Va., customer who waited 20 minutes to update her information. “In person it’s always better, I’m worried I might do something wrong online.”

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