Other Voices

Texas DMV a costly failure; time to abolish it, move it back to DOT

Sticking it to the DMV, with 5 wheelbarrows of pennies

Nick Stafford paid a sales tax at the Department of Motor Vehicles in Lebanon, Va. with nearly 300,000 pennies as a form of protest. Eventually, the DMV's coin counting machine started to jam, and employees had to count the unrolled pennies by hand.
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Nick Stafford paid a sales tax at the Department of Motor Vehicles in Lebanon, Va. with nearly 300,000 pennies as a form of protest. Eventually, the DMV's coin counting machine started to jam, and employees had to count the unrolled pennies by hand.

Government agencies are created with the best of intentions but are always a disappointment. Let’s look at an example: the Texas Department of Motor Vehicles.

TxDMV was created in 2009 from existing TxDOT operations with three additional employees at a cost of $285,000. Those three employees grew to 157 employees costing over $37 million.

In 2015 employee performance as measured by TxDMV dropped nearly 20 percent and continues to under-perform despite employees being paid $6,000 more a year than the average state employee. Crashes of the agency’s public computer systems are a frequent occurrence.

TxDMV issues licenses to motor vehicle dealers and manufacturers and salvage dealers, and permits to motor carriers. The purpose of licensing is to protect consumers and the public safety. According to the Sunset Commission’s report, motor vehicle enforcement violations include failing to timely transfer vehicle titles, improper use of temporary paper license plates, and deceptive advertising.

The majority of motor carrier enforcement cases are penalties resulting from trucking companies failing to file liability insurance. The Sunset Commission’s report does not report any enforcement actions against salvage dealers.

Effective protection of public safety and consumers is decidedly lacking in the nature of the listed actions. Advertising complaints seldom arise from consumers, but from motor vehicle dealers or TxDMV. Motor carrier safety standards are enforced by the DPS. Motor vehicle financing standards are enforced by another state agency.

It should be noted that TxDMV did not impose any sanctions against VW which misrepresented emissions and mileage on 44,000 vehicles sold in Texas.

This degree of TxDMV protection cost the people of Texas $1.45 for every dollar collected in license and permit fees and fines from dealers and motor carriers. The Sunset Commission has recommended using monies from fines to compensate consumers, which will further increase the cost disparity for taxpayers.

The Sunset Commission has determined that TxDMV is dominated by the industries it regulates and encourages anti-competitive regulation. (Report p.12).

TxDMV is the state agency responsible for vehicle registrations. Most registrations are handled by the county tax-assessors. Title fraud is government’s main concern, which occurs when government employees short change tax collections or where clean motor vehicle titles are issued instead of salvage vehicle titles for flood-damaged or insurance company totaled vehicles. TxDMV’s sole remedy is to complain to the police.

TxDMV uses TxDOT computer programs to issue permits for oversized and overweight vehicles, but does not maintain any data on the effects of such vehicles on roadways. TxDMV never evaluates if the fees collected adequately compensate for the damage done to Texas roadways.

TxDMV provides a free dispute forum for franchise disputes among franchise dealers and manufacturers. These disputes concern private contracts. Using taxpayer money on such dispute resolution does not benefit Texas taxpayers.

TxDMV Lemon Law cases involve significant manufacturing defects in new motor vehicles. Lemons are now a rare fruit in new motor vehicles. Consumers pay a $35 fee, and the manufacturers pay nothing. Providing this forum costs Texas taxpayers thousands of dollars per complaint.

TxDMV is a costly failure. If its functions were simply transferred back to TxDOT, Texas taxpayers would save from $37 million to $84 million a year for the same amount of government.

Time to abolish TxDMV.

Howard A. Hickman is a political scientist and retired Attorney with over twenty years of government service. He developed Bill Clements’ “Taxpayer Bill of Rights,” which resulted in Texas’ first Republican governor in 100 years and the enactment of an expenditure limitation constitutional amendment in 1978.
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