After a Marathon Ending to the 2015 Session, DMV Fee Hike Bill Passes in Return for Prevailing Wage Reform

Date: July 01, 2015

This
year’s legislative session in Dover can be summed up with one word; compromise.
One of the most contentious issues tackled by the General Assembly this year
was funding the Transportation Trust Fund. DelDOT officials warned the Assembly
of a $780 million backlog of projects – $180 million of which they
say are critical.

For
months Democrats and Republicans engaged in a heated debate about how they
would replenish the Trust Fund, which pays for road
and bridge improvements. While both sides agreed that road and infrastructure
repairs were desperately needed in the state, Republicans argued that if the $80
million that had been diverted from the trust fund into the operating budget
had remained, there would be no need to raise motor vehicle fees.

In
May, HB 140 was introduced which will impose an additional $24 million in
transportation fees annually on Delaware businesses and resident. The revenue
generated by these fees will be used to replenish the transportation fund.
Under the measure, the tax on car sales would rise from 3.75 percent to 4.25
percent while penalties and other fees for delinquent license and registration
renewals will also rise.

NFIB
strongly opposed this bill. In a letter sent to all legislators, we encouraged
lawmakers to go back to the drawing board to come up with real reform for
Delaware tax payers. We also pointed out that many of Delaware’s small
businesses are continuing to struggle to survive after the economic recession
and can’t afford additional fees on top of last year’s increases to the minimum
wage and the rising cost of doing business in Delaware.

The
bill sailed through the House in a vote along party lines, but received
opposition in the Senate. Due to the outcome of the 2014 election, Senate
Democrats no longer have the three-fifths supermajority needed to force
legislation through without minority support, which gave the Republicans room
to negotiate. On Thursday June 25 the Senate voted on the bill and even though there was an 11-10 margin in support of the
legislation, Delaware’s Constitution requires 13 votes in the Senate to approve
tax or fee increases. All nine Senate Republicans voted against the measure.

With little time left, it was back to the drawing
board as it became apparent that Republicans wouldn’t lend support for HB 140
without something in return.

Finally
after six months of negotiations, in the last minutes of the 2015 session, HB
140 passed with the agreement that HB 145, a bill to reform the prevailing wage
system, would also pass in return for Republican support.

While it’s unfortunate to see more fees being imposed
on businesses and residents we’re happy to see bi-partisan support for
reforming the prevailing wage system. Last year, Governor Markell’s 10-cent gas
tax increase bill never saw the light of day, due to its unpopularity among
Delaware residents. We feel that a gas tax increase would have been much more
costly for Delaware’s small businesses than the transportation fee increases.
Overall, it was a fairly good year for small business, especially considering
that a lot of bad bills, including another minimum wage increase, failed to
pass.

This new law increases 14 fees, which will be used to fund the Transportation Trust Fund, including:

  • The
    motor vehicle document fee is increased from 3.75% to 4.25%.
  • The
    fee for late renewal of a driver’s license is increased from $1.15 to $10
  • The fee for late renewal of vehicle registration is increased from $10 to $20.
  • The
    fees for reinstatement of a suspended or revoked driver’s license are increased
    from $25 to $40 and $143.75 to $200, respectively.
  • The fees for issuance of
    duplicate documents is raised, with the fee for duplicate driver’s license
    increased from $10 to $20, for duplicate titles from $25 to $50, for duplicate
    vehicle validation stickers from $1 to $5, and for duplicate registration cards
    from $2 to $10.
  • The
    fee for a vehicle temporary tag is increased from $10 to $20.
  • The fee for sale of driver’s licenses records is increased from $15 to $25.
  • The
    fee to transfer a specific tag number from vehicle to vehicle is increased from
    $10 to $20.
  • The
    fee to issue a title for a vehicle is increased from $25 to $35.
  • The
    fee for issuance of a lien on an existing title is increased from $10 to $20.

Related Content: Small Business News | Delaware

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