Bill gives private businesses a 15 percent raise paid for with state funds

A bill introduced by Anchorage Republican Sen. Cathy Giessel would give private businesses which expedite Department of Motor Vehicle services a pay raise of 15 percent from state revenues. If it passes, SB 127 would cost the state at least $1.2 million a year.

The companies say they need the extra money to process credit cards and to expand their businesses. Critics say that the state would be giving additional money to businesses for doing work that’s already profitable. The state DMV is neutral on the bill. Currently, there are eleven businesses that contract with the state for this service in Alaska, not all of whom appear to have valid Alaska business licenses.

Since 2000, the state has allowed private companies to provide titles, transfer of titles, and commercial services historically done through DMV. They set up offices away from DMVs and the lines are much shorter. The companies provide the paper work, but DMV still does the processing.

Such services provide convenience for consumers. In exchange, the companies have been allowed to charge whatever the market will bear for the convenience, above and beyond the standard DMV fees. They’re also allowed to charge for things, like handicap license plates, that the state doesn’t charge for.

In fiscal year 2013, they collected more than $11.4 million in fees from 193,697 transactions.

Fees charged to the consumers can vary dramatically depending on the business and the service. One of the largest of such businesses, Alaska Tags & Titles, processed 341,000 transactions from 2004 until 2013. According to legislative testimony, the company charges consumers $20 for a registration renewal, $2 for a transfer of title, and $30 for commercial fees.

This is a service fee above and beyond what the state charges.

If the bill is passed, in addition to those service fees, companies will get an additional $2 for a duplicate registration, $5 for a duplicate tag or plate, and $115 for a registration for transfer of title from the state, according to Melissa Cucullu, the general manager of Alaska Title and Transfer.

That money will come from the general fund.

Giessel said that it would encourage more private sector involvement and would save the state money, though she has not offered any documentation for the latter claim.

The bill passed out of State Affairs Committee and was referred to Finance.

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13 thoughts on “Bill gives private businesses a 15 percent raise paid for with state funds

  1. chechako

    Thiis is grossly bizzarre. Why waste the money? If people wanr concierge quality services, let them pay for it. Hope someone kills this bill.

  2. Mike Eastman

    I suggest we further slash public education funds and assistance to Alaskans in poverty to pay for this Republican service to already profitable private enterprise. Basic principle of free market capitalism, y’all.

  3. Stu M.

    This proposal blows me away and makes me wonder how many more bad bills are out there. I was surprised that the DMV was taking no position on the bill. Could that be because the administration is concerned about irritating the Chair of the Senate Natural Resources Committee which could have bigger ramifications on the gas pipeline bill? That’s all I could figure. Otherwise, anyone with any sense would have to say this is not in the state’s best interest. I see this proposal as a blatant give away of state money and object to it being called a savings.

  4. AA Disciple

    I read stuff like this and wonder how much our politicians are drinking. This seems like such a lame proposal, I have to ask what are we missing? If the senator has a rational explanation I hope you allow her to print a response as I would love knowing. Right now, I rack this one up to one of the worst bills of the session. Guess it could be worst.

  5. H2

    Last week I would have said that there was only one real choice. This wee’ I say there is only one real choice. The difference is that this week the only real chooice is Harry Crawford.

  6. THG

    This legislation is worthy of one of Bill Proxmire’s Golden Fleece Awards given as a means to point out government waste. This bill is a very bad idea. Usually Sen. Geissel is more thoughtful than this.

  7. Chamber member

    No wonder we have budgetary problems. I don’t know how giving away $1.2 million will save the state money. If these elitists want special service and treatment, let them pay for it themselves or stand in line with the rest of us. Spending the money to enhance on-line access and ability to do business makes more sense. Let’s just all be glad that CG is not on the Finance committee.

  8. Lynn Willis

    Good question Amanda regarding how spending an additional 1.2 million is saving us money. After a while one almost gets used to legislative newspeak.
    Is this just another variant of the LIO scenario where select contractors reap the public largess? Legislators such as Senator Giessel are now very prepared to funnel millions then billions to the producers and Transcanada to involve us as ‘partners’ in the new AKLNG gas line project. She and fellow party members refused to support an effort to amend SB138 in Senate Resources to determine what went wrong with AGIA before we go any further into another financial gas line abyss. Senator Giessel and like thinkers apparently are now not the least bit interested in what went wrong with AGIA or concerned that we are still paying Trans Canada millions for AGIA related activity all the while funding the separate AGDA/ASAP project.
    Yet somehow Senator Giessel believes she sees the perfect solution to a gas line this time around because we are ‘aligned’ with private concerns. She and her ilk see this state, not as a sovereign, but as an investment bank with a clear mission to fund those such as these DMV contractors and others who are in a perfect position to support the political careers of her and those who share her political philosophy.


    FACT : Sen. Giessell is a RINO. This is blatant and unnecessary corporate welfare. I hope her republican colleagues see this for what it is. Mr Munger’s terminology explains the bill well. Where do these clowns come up with this stuff ?

  10. Philip Munger

    I agree with akmom that the Palmer DMV is a lot better than it was forever. However, I use the DMV store in Wasilla fairly often, especially if I have to get a certificate processed quickly.

    This bill is bullshit, though. If these businesses cannot survive in a normal environment, they need to deal with it without being given another GOP-induced handout. RWNJ welfare at best.

  11. Budget Conscious Republican

    Senator Giessel has given up ANY right to label herself as a fical conservative. Giving an unneeded susbsidy to the private sector is tantamount to throwing money out the window. These businesses that she wishes to subsidize are making money and charge at their discretion hefty service fees for the convenience of their expedited service and handling. Why Giessel thinks the state should support this is beyond my comprehension. Up to now, I was a fan of Senator Giessel’s. Now, I’m quite disappointed in her judgement and her behavior. Checking her campaign finance disclosures suggest that she has benefited from some in this industry. Senator, it’s never too late to regain your wits.

  12. akmom

    State Procurement code requires the business to hold a current Alaska Business License. If that is not being maintained, that is a procurement violation. Personally I never frequent the private vendors. The Palmer DMV is incredibly efficient and I can get everything done in one visit. Plus I don’t have to pay “extra”. Anyone who uses the private businesses should really give the DMVs another shot. They are vastly improved from 10 years ago.

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