Tuesday, March 30, 2010

Driver surcharge boosting Texas joblessness

As the Public Safety Commission prepares to set the public hearing date for the Driver Responsibility surcharge rules at their meeting Wednesday, it's worth pointing out once again that the economic harm from this program far outdistances the revenue it generates.

Though the program never met expectations, failing to collect nearly 2/3 of assessments, surcharges remain a significant revenue source. But no one should lose sight of the fact that they pale in comparison to state revenues generated from property and sales taxes. Creating jobs and expanding the tax base must be the long-term engine for getting out of the current economic slump. For that reason, the state has a strong self interest in ensuring that employed, low-income Texans are able to pay off outstanding surcharges and keep their jobs.

The effects of surcharges on low-income drivers have been studied in detail. Amanda Marzullo at the Texas Fair Defense Project points to a 2006 survey (pdf) from the the New Jersey Motor Vehicles Affordability and Fairness Task Force. They studied the surcharge's impact on drivers with licenses suspended due to their own Driver Responsibility Program, which levies the same license surcharges as the Texas DRP.

According to that survey, of persons with suspended licenses whose annual income was under $30,000: (1) 64% were unable to maintain their prior employment following a license suspension; (2) only 51% of persons who lost their job following a license suspension were able to find a new employment; (3) 66% reported that their license suspension negatively affected their job performance; and (4) 90% of persons whose license was suspended within this income bracket indicated that they were unable to pay costs that were related to their suspended driving privileges. In addition, of those who were able to find a new job following a license suspension-related dismissal, 88% reported a reduction in income.

That makes Driver Responsibility surcharges a major cause of job loss, significantly exacerbating the current economic downturn. Roughly 1.2 million Texas drivers have lost their license because they defaulted on DRP surcharge debts. No doubt a significant number make less than $30,000 per year.

The rules published in the Texas Register only impact drivers with incomes below 125% of federal poverty guidelines - around $10,000 per year for an individual. But the New Jersey study found that drivers with three times that income were losing their licenses and their jobs because of the DRP. In most cases, though not “indigent” under proposed DPS definitions, such levies remain beyond the means of many, though they are often able to make some sort of payment. Texas is both leaving money on the table and harming the economy in the big picture by not crafting payment programs to accommodate them.

UPDATE: A commenter reminds me I should have mentioned that the public comment period for the proposed rules ends Monday April 5, so get yours in if you're going to. Comments may be submitted to Rebekah Hibbs, Driver License Division, Texas Department of Public Safety, P.O. Box 4087 (MSC 0300), Austin, Texas 78773; by fax to (512) 424-5233; or by email to DLDRuleComments@txdps.state.tx.us.

Keep in mind the PSC cannot abolish the surcharge, so the focus should be on asking them to do all they have authority to do. The main things folks should be asking for are:
  • Create an Amnesty program to clear up noncompliance backlog
  • Use accurate documentation for indigency application process
  • Make language comply with 2011 statute waiving surcharges for indigents
  • Create incentives to encourage compliance for other low-income drivers
For more background, see these related, recent Grits posts:
See also recent press coverage:


Anonymous said...

Is the comment period over tomorrow? Can comments be sent by email or fax and if so to what address.
Thanks for your good work for Texas.

Gritsforbreakfast said...

Good question. The public comment period for the proposed rules ends April 4, but that's a Sunday so it will be extended to Monday April 5. Comments on the proposal may be submitted to Rebekah Hibbs, Driver License Division, Texas Department of Public Safety, P.O. Box 4087 (MSC 0300), Austin, Texas 78773; by fax to (512) 424-5233; or by email to DLDRuleComments@txdps.state.tx.us.

Anonymous said...

Who do I write or call and ask for consideration in abolishing the surcharge?

I wrote my state legislator and senator several years ago citing the fact that it is impossible to pay the surcharge for 3 years and expect people to be be able to continue to work and that DPS can call it what they want but it amounts to nothing more than monetary punishment. And that is something the courts impose.

BTW, I nver got a response from either.

Gritsforbreakfast said...

The Lege is not in session and only they can abolish it. So that can't happen until next year. Right now, this is what's on the table, and the person to write is at DPS, above, to comment on the proposed rule before Monday. If your comment is that it doesn't go far enough and it really should be abolished, that's fine. But right now all the action on this is happening at the DPS Public Safety Commission.

Thomas R. Griffith said...

Hey Grits, had I not had the opportunity to read this Post I probably would have never associated a surcharge with ones ability to keep or find work.

I thought it was rough enough for those of us with an X on our back and/or on probation.

Combine the surcharges and the hundreds of thousands of criminal records with an influx of the millions of those willing to work for $17. an hour vs. $26. (framing houses) and one starts to understand just how bad it is. This can only get worse. Thanks for the info.

TFS said...

Are the indigent reforms retroactive? What about those who would have otherwise qualified for the rate reduction (and still have the same income)?

Hoof said...

Don't worry about it. Obama will fix it for you in a jab at Perry. Only the honest law abiding citizens need be concerned.

Anonymous said...

There is something very positive about these surcharges. People are losing employment, probably being replaced by more responsible workers.

Anonymous said...

I understand what many low income people have to go through when dealing with surcharges. I received a ticket for no insurance that ended up costing me $1000! I was a student at the time who was awaiting my student loan money to come in and was late on insurance and then with the ticket could barely scrape up the money to pay the surcharge. Then one month when I forgot to pay the surcharge, they did not send me a late notice but instead suspended my license and reported me to the credit bureau and then asked that I pay the rest of the years surcharge in full which of course I could not.

Long story short, it did hurt me financially and DPS made things very difficult and would not work with me despite my situation.

Anonymous said...

Yes, tickets should be paid. It is difficult enough trying to pay the tickets when you have no job because you can no longer drive. Of course it is easy to catch a ride with someone from another country that is here driving with no license; nothing is done about that. Surcharges continue to keep many from getting license bace because of being stupid as a young person. If the state does not give a break, who gives the people born here one? Who really cares if you try to change and better your life?

Anonymous said...

I haven't worked in months , makes it hard to find work when their holding my license over my head for Five thousand dollars (total)

I can't jump that High! My car barely starts (junker) and you keep giving my 1000 dollar tickets that i pay with my unemployment!

I guess The government wants its money Back !

I no longer live in fear~

Anonymous said...

I received a ticket for "No Insurance" went to court and agreed to pay the fine. I was pulled over for an expired inspection sticker. I got the inspection fixed and agreed to a $10 court fee fine. I could have easily gotten it fully dismissed if I had gone to court for it but chose not too since it was quick, easy and painless to just pay the $10 fee. Then I got hit by this surcharge which no one mentioned in court or in the negotiations with the prosecutor. I think the surcharge fee was $104 every year for three years. The no insurance fee on top of that was $260 every year for three years.

Its just wrong.

Now for the last two plus years I simply drove anyway. If you want me to get insurance, give me some reason to do so. Auto insurance is expensive enough for low income people without adding this huge surplus.

If they are going to do a surcharge, they should be required to include that figure in the local courts fees and fines at the time of negotiations. You would know what your getting into at that point.

Anonymous said...

Correction to that last anonymous post the fine for $10 was for not having a valid tx driver's license. I did have a valid license at the time. I had the paper one which they first issue but it is only valid for a month or so. I only had to go get another new one (change of address) issued since I never received the earlier one in the mail.

Anonymous said...

I don't have a drivers license anymore after 40 years because of surcharges. Honda got their Civic back because it is easier to buy a new car without a license than it is to put a car in the shop and rent a car. So now Honda doesn't get their money either. It is also better to drive a new car without a license, because the cops don't look near as hard at a new car. You just go get a car that you plan on keeping for a while and let the old one go back.

Anonymous said...

I have been unemployed for 2 years. I recently had the best opportunity I've had for employment in those two years, but lost out on it because of the unpaid driver responsibility fees.

Anonymous said...

I've been paying my surcharge fees. Last month, i was a little ahead and overpaid. I owe $35/mo as per my arrangement, but i paid $100, and made my payment on 09/07/2010 while it was due 09/28/2010.

I noticed today (10/04/2010) when i logged in to make this month's payment, that my due date still says 09/28/2010. When i called customer service to verify, she calmly informed me that early payments are applied completely to the balance, and do not satisfy the due date.

She informed me that if i paid NOW, only one week late, it should be fine if it's processed quickly on their end.

AND she refused to provide me with this information in writing.

I'm against the DPS using this means, rather than simply increasing the court issued fines. But for the sake of all that is sane, couldn't they use a collection agency with sane policies?

Anonymous said...

I am a struggling parent caught with 3-4 surcharges, all tickets were paid, I do have insurance now, but with a suspended licenses, however I have to risk getting pulled over so my kids can eat and have a place to live. the surcharges are extra money so these tax payers can argue over there political nonsence on whos liying, I just want to provide for my family, This is non sense to have a suspended licenses when I paid my tickets.

Anonymous said...

I have been on unemployment for a little over a year and defaulted on my payment plan once when unemployment ended for millions and Congress was debating the extension deadlines. At that point I had paid a little over $1000 out of $3000. I was able to restart my payments again once benefits got reinstated but I have to pay $200 a month out of the $800 a month I receive. This has been crippling and I never have a dime to my name after rent and bills. I'm afraid to let the payments go in case I find work that requires me to travel a distance. I don't understand why the amount of surcharge fees can't at least be lowered for those who are jobless or aren't making as much as they had when the monthly amount was calculated. At the my first payment was in effect I was making $1000 more a month than I am now. I'm getting to the point where I am nearly homeless because I can not afford these fees any longer. I have had job interviews that I would not have been able to get to if I didn't have a license, and a lot of the times the bus is not an option by any means. What the heck is one to do? They need to accommodate people like me who are in the same and similar situations. Though I really don't think they care the effect it has on the economy in the long run otherwise something would have been done already.

jose said...

this sucks i didn't even know my licence was suspended supposedly i drove five years without licence never knew cause never got stop and then recently just a month ago i got stopped and got a ticket for driving with suspended licence applied for payments and got my licence and than the city still is charging me a ticket eventhough i fix everything with the dpi this sucks we depend on a smalll portion o people making the wrong decisions for the rest of us we must do something it is just not fair period.

Anonymous said...

Court of Criminal Appeals of Texas has accepted the case and will consider my motion to declare Ch 708 of TX Trans Code "Surcharge Program" unconstitutional. Writ No. WR-76,215-01. I ask all interested Tx lic attys, law professors, civil rights groups, etc to file their friend of the court briefs in support of relators motion to declare ch 708 of tx trans code unconstitutional. We got the Tx high court's attention now. Help me shut this ch 708 down, make the state refund every dollar with interest and reinstate all DLs suspended under ch 708. We don't need congress to repeal and wait for any federal court to intervene. This motion before a Texas high court to review a Texas statute. Its perfect.
Any questions?
Daniel Montes
469-563-8998 cell