$637M driver fee forgiveness plan on Senate fast track
Lansing — The Michigan Legislature is acting fast on legislation that would hasten the end of “driver responsibility fees” and forgive more than $600 million in debt owed by hundreds of thousands of motorists.
A state Senate committee approved the bipartisan plan Wednesday morning, setting the stage for future floor action. A House panel took testimony on a similar package and is expected to vote as early as next week.
Secretary of State Ruth Johnson is among those urging legislators to forgive the fees, which the state imposes on drivers who commit multiple infractions — in addition to their underlying traffic ticket.
The fees are a “harsh back door tax on tickets,” Johnson said in testimony before the House Competitiveness Committee. She noted drivers can lose their licenses for failure to pay the fees, first imposed in 2003 but scheduled to end in late 2019.
“Driver responsibility fees hurt families and have a far-reaching, domino effect,” Johnson said. “People lose their licenses, can’t take their kids to school, can’t find a job, can’t go to work.”
As of August, 348,440 drivers owed the state $637 million in driver responsibility fees, according to the Michigan Treasury, which opposes the bills as written and has expressed concerns with the proposed mechanics of the amnesty plan.
Roughly 67,000 Detroit residents owe the fees, said Jeff Donofio, the city’s director of workforce development. That’s 18 percent of Detroit’s adult workforce, he told legislators.
Donofrio called the fees a double punishment, regressive and one of “the biggest barriers to helping Detroiters connect to employment.”
The legislation would end driver responsibility fees by October 2018, speeding up a phase-out legislators approved three years ago. The state would be prohibited from collecting the fees and would allow affected residents to seek reinstatement of suspended driver licenses.
The legislation would also reinstate a community service option allowing residents to work off their debt if they want to eliminate it prior to forgiveness in October 2018.
Steve Kukulka, a 51-year-old Lansing resident, told lawmakers he is struggling to pay off $4,000 in driver’s responsibility fees. He recently got his license back but cannot afford a car while making $176 a month in fee payments, he said, forcing him to rely on a colleague to drive him to work.
“It’s a burden to pay that, but it’s something I do because having a driver’s license gives me more opportunity,” said Kukulka, who told reporters he lost his license for nine years because of a conviction for driving while impaired. “I’ve changed my life around completely.”
The Michigan Legislature approved driver responsibility fees nearly 15 years ago, arguing they could help deter irresponsible driving. But it was actually a way for the state to hide “irresponsible budgeting,” said Rep. Lee Chatfield, R-Levering, who chairs the House committee and called the 2003 law a “money-grab scheme.”
The state began a phase-out of the fees under a 2014 law signed by Gov. Rick Snyder. The new plan would end the program a year early and forgive outstanding debt at that time.
“Many people in the state are unable to get to work, unable to be productive members of society because state government has burdened them with additional layers of debt,” Chatfield said.
Chatfield said he expects to hold a vote on bills the next time his committee meets, likely next week. He was not deterred by early opposition from the state Treasury Department, he told The Detroit News.
The bipartisan legislation is backed by House Speaker Tom Leonard, R-DeWitt, and Senate Appropriations Chairman Dave Hildenbrand, R-Lowell. Democratic sponsors include Reps. Sylvia Santana and Leslie Love of Detroit.
While motorists owe the state more than $600 million in outstanding fees, sponsoring legislators said more than half of that debt is more than six years old and may never be paid off.
Hildenbrand said the amnesty plan could cost the state $52 million in revenue next fiscal year, but the appropriations chairman told his colleagues the budget should be able to handle the hit because of projected general fund growth.
“When you’re changing lives like this, bringing people back to work and back to school, that also has an economic impact,” Hildenbrand said. “The hope is, as you make life easier for people they’re going to start being contributors to society and taxpayers.”