Home MTA EconomicsRavitch Commission Drilling down on the driver license fee plan

Drilling down on the driver license fee plan

by Benjamin Kabak

Let’s talk New York State drivers licenses for a bit. They have become quite the hot topic on the transit front lately.

Right now, it seem as though the most popular alternate to the Ravitch proposal concerns drivers licenses. As I discussed last week, a group led by Assembly rep Micah Kellner and New York City Comptroller William Thompson have proposed increased fees for car registrations and licensing fees in lieu of the controversial East River tolls.

A few readers e-mailed me skeptically about the registration fee plan, noting that the numbers did not quite seem to add up. So I ran the numbers. There are, according to the 2007 DMV records, 6.78 million licensed drivers in the 12 counties served by the MTA and 5.59 million licensed automobiles. It was then that I realized the catch.

Right now, those of us with New York State drivers licenses pay, more or less, around $50 once every eight years to renew our licenses. It was my understanding that this alternate plan would simply raise this rate to $100 every eight years. The way I figured it, this new fee would generate an additional $42 million a year and not the promise $300 million Kellner and Thompson had noted.

The catch, you see, is that Kellner and Thompson would charge New Yorkers that $50 fee every year. Instead of paying $50 for eight years, we would instead be paying $400 extra over that eight-year period to enjoy the privileges and benefits of having a drivers license no matter how little or how much we drive.

To me, this doesn’t quite get at the heart of the problem. It certainly provides an alternate source of revenue and wouldn’t require tolling the East River bridges, but it’s an unfair demand. In fact, while Thompson claims that the East River crossing tolls would hit those who cannot afford to pay them the hardest, I believe his alternate registration plan would.

Take me, for example. I have a New York State drivers license, and I always will. The last time I personally drove a vehicle across one of the East River bridges was in 2006 when I had to drive a van from Manhattan to Brooklyn. Under the Ravitch plan, I would pay $0 a year to cross the East River bridges because I take the subway to Manhattan every day. It’s significantly cheaper than owning a car; it’s convenient; it’s quick. But I’m not going to give up my drivers license.

Under the Kellner/Thompson plan, I would be paying an additional $50 a year to own a form of government identification. The people who can afford this plan will shrug it off and pass the costs on; the people who can’t will have to decide between relinquishing a drivers license of paying more. It’s not really equitable.

On the other hand, the Ravitch proposal would charge you for use. If you use the East River bridge tolls —  if you avail yourself of a service that isn’t free to New York City but that the city refuses to charge for right now — you should have to pay. My ownership of a drivers license shouldn’t fund mass transit, but your use of the roads at the economic, social and environmental expense to everyone else should. And that’s why this registration fee plan is bogus.

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rhywun December 9, 2008 - 2:43 am

I don’t have a personal stake in the argument, because I don’t drive, but I agree that a usage fee is fairer.

Angus Grieve-Smith December 9, 2008 - 6:55 am

I didn’t realize that a fee on drivers’ licenses was part of the plan. That’s crazy! I have a driver’s license, but I don’t own a car and drive at most four times a year, almost never in the city. I know several people who are in the same situation.

If I’m paying $50 per year just for the privilege of being able to drive when I need to, I’ll definitely feel like I should get my money’s worth, and I’ll have more desire to rent or borrow cars and drive. That’s exactly what we don’t want people like me to feel.

Julia December 9, 2008 - 10:13 am

Yes! This is crazy!

Have none of these people ever taken an economics class? It’s not a complicated idea. If you want people to drive less, you have to raise the cost of DRIVING. If you raise the cost of driver’s licenses instead, you’ll end up with:

(1) fewer people with driver’s licenses, which is not the same thing as fewer cars on the road, and

(2) this perverse incentive that Angus describes, where the people who have licenses now have an incentive to drive more, because the first mile/hour of driving is that much more expensive than the hundredth.

Nick December 9, 2008 - 7:00 am

Glad you brought this up. I think this proposed fee our of all of them is ridiculous. Honestly I would much rather just be taxed instead of my employer for the MTA tax, even though it would cost more money.

Scott E December 9, 2008 - 8:54 am

I think all of the above arguments are valid. Lots of New Yorkers hold on to their licenses for the rare occasion on which they just might need to use it. It’s not quite fair to increase their fee by EIGHT TIMES just to be prepared for these occurrences.

However, my concern (aside from legal logistics) with all of the plans is how to deal with out-of-state licenses and registrations. Already, the number of cars that are kept in and around NYC with out-of-state plates are staggering. I see Pennsylvania, North Carolina, and Florida plates in the area all the time. I’ve even seen, more than once, vans with an NYC business name and address on the door, displaying a Pennsylvania plate. This is clearly a tactic to avoid the fees and insurance costs associated with driving in New York.

These phony out-of-state registrations cheat the insurance system and the tax system, and now the MTA. I doubt they will be pursued when their plates are photographed crossing the tolled East River bridges, and the new registration and licensing fees will encourage more people to circumvent the law and register themselves and their cars out-of-state – or drive without a license altogether.

Understandably, the MTA will still see a net-gain under whichever combination of plans is chosen, despite these wrongdoers. However, it will encourage more and more people to dodge the laws in order to save a few bucks, and promoting lawlessness is not a good thing. (My car was recently hit in Queens by an unlicensed, uninsured driver – a NY resident with out-of-state plates, with little hope of ever recovering a $500 deductible on my repair bill. It happens all too often).

Doc Barnett December 9, 2008 - 10:55 am

” I doubt they will be pursued when their plates are photographed crossing the tolled East River bridges”

They will get a bill in the mail. Bill recipients could ignore the bills at their risk, and the chickens will come home to roost when pulled over for a different infraction, or, if cops hooked into the billing system are stationed at bridges to catch the worst offenders. While the tolling plan can’t be perfect, it at least tries to be fair. Charging me more for my license, which I rarely use in the state let alone city, so that my neighbors with out of state registration (let alone out-of-city car commuters) continue to get a free ride every day if they want, that’s intentionally bad. I can’t believe Kellner is serious.

paulb December 9, 2008 - 11:31 am

The license thing is the worst idea since escalating the Vietnam war. But New York state is already known as having one of the worst state gov’ts in the entire country, so I wouldn’t be surprised. Furious, but not surprised.

Adam G December 9, 2008 - 12:19 pm

Good grief, this plan is asinine.

John December 9, 2008 - 12:37 pm

I don’t have a personal stake in the argument, because I don’t drive, but I agree that a usage fee is fairer.

Good grief man! i don’t drive either but have you never considered renting a car once in a while, maybe on vacation in a place where they don’t have transit? Or a U-Haul when you have to move? Whereas for most drivers in the State, this plan charges pennies every time they drive, I would pay something awfully close to $50 every time and so would you if you ever needed to also.

R2 December 9, 2008 - 1:21 pm

Let’s call the license fee plan for what it is: a crock of s**t!

Occasional drivers will be forced to use other forms of ID (maybe a passport) or switch to state-issued ID w/o driving privileges. And Angus is totally on the mark. This would provide a perverse incentive to drive more.

As for resolving the issue w/ New Yorkers using out of state plates and registrations to save on insurance, one carrot to provide is residential permit parking. The stick: gotta have NY plates and be registered in the city w/ an address corresponding to that particular neighborhood. The state would get some more money from legit registrations and insurance might even get cheaper for everyone else.

Ravitch has a good plan overall (and it’s obvious no one in the press or those politicos have read it completely to the end). I have little faith in our spineless pols.

Alon Levy December 9, 2008 - 2:09 pm

Is it even constitutional to charge for an ID?

Off-topic: the NYS DMV link you give shows there are 1.9 million cars in New York City. If it had the same car ownership rate as the rest of the US, it’d have 6.4 million. In other words, the subway is taking off 4.5 million cars off the road. No wonder people in Detroit hate the idea of doing anything to help New York and its flagship industry…

Angus Grieve-Smith December 9, 2008 - 4:36 pm

Alon, non-driver IDs are currently $9-14, depending on the duration of their validity.

Marc Shepherd December 9, 2008 - 3:49 pm

Is it even constitutional to charge for an ID?

As far as I know, every state in the union does so. And have you seen what the Federal Gov’t charges for a passport?

rhywun December 9, 2008 - 7:40 pm

have you never considered renting a car once in a while, maybe on vacation in a place where they don’t have transit?

No. I’ve been to remote places with friends who drive. But otherwise it’s never been an issue. My idea of a vacation is Paris (don’t need a car) or China (not allowed to drive).

Or a U-Haul when you have to move?

No, I just pay someone else to do it. Much less stressful that way–which is pretty much my guide to life.

Erik December 10, 2008 - 5:15 pm

I had read that the proposal was for increased DMV fees on vehicle registrations, not licenses, with heavier vehicles to pay the most.

Benjamin Kabak December 10, 2008 - 5:16 pm

It’s for both higher registration fees and an annual licensing fee.

The DMV fees hike in perspective :: Second Ave. Sagas | A New York City Subway Blog September 2, 2009 - 2:59 pm

[…] when Comptroller William Thompson issued his call for increased fees, I examined his proposal with skeptical eye. He wanted to bump driver licensing fees up from $50 every eight years to $50 every year. For a […]


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