A Hummel Report Investigation
Thousands of Rhode Island motorists who go to the DMV expecting a refund on a cancelled registration this year will find out the check won’t be in the mail. An 11th-hour change to the state budget last spring eliminated a long-standing practice of reimbursing vehicle owners who had more than a year left on their two-year registrations. As Jim Hummel explains: the state is using the $539,000 it expects to save to help balance this year’s state budget.
On any given day the Division of Motor Vehicles performs up to 240 different transactions – now more efficiently since a new computer system came online over the summer.
But if you come here to turn in a license plate after cancelling a registration – and expect a refund – you’re in for an unpleasant surprise.
At the 11th hour of budget negotiations last spring The Rhode Island General Assembly decided to eliminate giving refunds back to motorists who had more than a year left on their cancelled registrations. As a result, an estimated 18,000 Rhode Island motorists will unintentionally help balance this year’s budget, collectively chipping in $539,000.
Grimaldi: ``It’s an administrative expense to the Division of Motor Vehicles and they have for a number of years have looked to change the way those are handled.’’
Paul Grimaldi, a spokesman for both the DMV and the state Department of Revenue said officials pitched eliminating the long-time refund a year ago when budget recommendations for this year started to materialize.
Grimaldi: ``Each department has to make a presentation to the governor’s management team in a sense to show them where they think their predictions are going to be for revenues, for expenses.’’
And last year the Department of Revenue recommended eliminating the practice of refunding part of a two-year fee if a vehicle owner has more than a year left on the registration.
Hummel: ``Was it as simple as that: this is a cost for us to process, we have to put manpower on, but we don’t’ really getting the revenue back?’’
Grimaldi: ``Registration fees aren’t held by the DMV to run the division. All of the money is turned over to the state budget, in essence; 20 percent goes to the general revenue and 80 percent goes into the highway maintenance fund. So all of that processing the DMV does is an expense to the department because the money just flows through, the DMV is a conduit to the state budget. The way registration cancellations are handled is: you come into any DMV and you get in line with the other customers and come up and say I want to cancel the registration. Well, the clerk has to stop and do that work and that’s extra work that the DMV is seeing no revenue for. That refund doesn’t come to us, it goes to you. We’re not getting reimbursed on the other end for that extra work from the General Fund– or money’s not coming back from the highway maintenance fund.’’‘’
That does sit well with some motorists we spoke with. Michele Badessa of Burrillville told The Hummel Report: ``Isn’t that their job?’’ They’re getting paid to work 8 to 4:30. It doesn’t matter that if they’re handing out refund checks, or checking to see if the license plate is still valid. It should be under your job description. It has been for how many years this process has been going on where we’ve gotten checks back? It’s just part of the daily duty.’’
House Finance Chairman Marvin Abney tells The Hummel Report the elimination of the registration refund was one of many proposals the legislature considered to bridge a $134 million budget deficit during the homestretch of this year’s session.
Grimaldi: ``It was a small request that’s popped up from time to time and it was included in the DMV and DOR’s budget request for the current fiscal year, do FY 18.’’
The irony is the governor’s office did not include the proposal in its original submission to the General Assembly, but it was reinserted in the waning hours of the session in June.
Hummel: ``You make the recommendation, it’s not included in the governor’s budget - initially.’’
Grimaldi: ``Right, initially, then it gets put back into the budget as far as we know late in the process. What we knew is that we learned it was included in the budget as enacted by the General Assembly in late June. It was really considered a small part of the DOR budget; the Department of Revenue budget is over $500 million now, taking in $3.2 billion of revenue, so $539,000 seems like a lot of money – it would be a lot of money to the average Rhode Islander - but in the context of that budget it’s a small amount.’’
Some motorists we spoke with wanted to know why the change wasn’t publicized - and had to find out the hard way when they went to turn in their plates.
Grimaldi: ``Given how complex the budget is ever year, it’s not unusual for things like this for people to catch up to. All sorts of fees and programs get changed every year. Sometimes they’re implemented right away, like this one was. Sometimes they have an effective date of Jan. 1, so it can take months before the general public understands what the changes are and how it may affect them.’’
Michele Badessa is having none of it.
``They certainly advertised the changes they made to the DMV,’’ she said. ``That’s all you heard for weeks, when it was good news. They have no problem taking our money, and cashing it the same day. Before you even reach the door it’s out of your checkbook. A policy change like that is so unfair.’’
In Cranston, Jim Hummel, for The Hummel Report.