Lansing — The Michigan Senate on Thursday scaled back a bipartisan plan to forgive hundreds of millions of dollars in unpaid “driver responsibility fees,” unanimously approving legislation limited to debts six years or older.
The fast-tracked legislation, as introduced earlier this month, would have forgiven all outstanding driver responsibility fees, which totaled $637 million as of August.
The revised plan would apply to older debts no longer subject to collection enforcement by the Michigan Treasury — roughly 55 percent of all outstanding fees, said sponsoring Sen. Dave Hildenbrand, R-Lowell.
The legislation would end the program in October 2018, speeding up a planned phase-out of new responsibility fees, which critics call a double punishment for motorists because they are assessed on top of standard traffic tickets.
Motorists who fail to pay can lose their licenses under current law, but the Senate plan would allow someone with outstanding debts to reinstate their license for a standard $125 charge.
“That’s the whole reason I got involved in this, because we had 317,000 people without driver’s licenses because of outstanding driver responsibility fees,” Hildenbrand told reporters.
“Obviously it’s a hurdle to get to work, to get to school” and creates other qualify of life issues for affected residents, he said.
The Michigan House is considering its own driver responsibility fee elimination plan. A package advanced out of committee Wednesday would forgive all outstanding fees, not just those six years or older, and House Speaker Tom Leonard said Thursday he prefers that plan.
“This was an unjust fee, never should have been imposed on our people,” said Leonard, R-DeWitt. “And I still stand behind the position that we ought to have a total forgiveness program.”
Senate Majority Leader Arlan Meekhof, R-West Olive, said he anticipates productive negotiations between both legislative chambers and Gov. Rick Snyder’s administration, which has expressed concern with the legislation.
Leaders are “in the same book, they’re just not on the same page yet,” Meekhof said. “The effort is to try to relieve people and help them get a license so they can get back to work. We’ll find the right spot to land to accomplish that.”
The Michigan Legislature approved driver responsibility fees nearly 15 years ago, arguing they could help deter irresponsible driving. But critics say they were actually used to fill holes in the state budget.
The state began a phase-out of the fees under a 2014 law signed by Snyder, but the new plan would end the program a year earlier.
The Senate plan would also reinstate an option allowing motorists to work off outstanding debt through community service. The state Treasury could also seek forced collection from motorists with fee debt less than six years old.
Lawmakers say outstanding fees older than that are unlikely to be paid off. As a result, it’s not immediately clear how much the scaled-back forgiveness plan could cost the state.
Michigan collected $69.2 million in driver responsibility fees in fiscal year 2017 and is expected to collect $52 million in the current fiscal year, according to the non-partisan Senate Fiscal Agency.
The non-partisan House Fiscal Agency projects full forgiveness would reduce state revenue $35 million in fiscal year 2019 but generate $16.3 million in revenue from newly eligible residents reinstating their driver’s licenses, which costs $125.
The Snyder administration has “reservations about the budget impact,” Hildenbrand said, noting some of his colleagues in the Senate had also raised issues with the initial plan.
While the forgiveness debate continues, all sides agree the state should stop assessing the responsibility fees sooner rather than later.
People “pay fees already when there’s traffic violations, and this is just tacked on top,” Hildenbrand said. “I think they’re exorbitant and unnecessary.”
Staff reporters Michael Gerstein contributed.