Tens of Millions in DMV Fees Flow to In- and Out-State Groups

November 19, 2012

Investigative Reports

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License PlateSouth Carolina’s Department of Motor Vehicles collected more than $260 million last fiscal year, but the state agency kept about $73 million of it, records show.

So where did the other $187 million go?

The rest of the revenue went to dozens of other state agencies and funds, nonprofit organizations, and colleges and universities – both in- and out-of-state, according to the agency’s annual fees and fines report for fiscal 2012, which ended June 30.

Various state laws require the Department of Motor Vehicles to distribute a portion of its revenues to other entities and funds.

“We will bring in well over $260 million a year for the state of South Carolina, and every single dime that we send out is based upon a law,” J.R. Sanderson, DMV’s operations director, told The Nerve.

“We do a lot of collection and then a lot of distribution,” he continued. “As you can see, we distribute a lot of money to a lot of different people.”

The agency, however, had not posted its fees and fines report on its website by a Sept. 1 deadline as required by a state budget proviso, The Nerve reported earlier this month.

After The Nerve’s story ran, DMV published its report online.

Of the $262.1 million in revenue collections last fiscal year, about $10.5 million was returned to the state’s general fund as required by several laws. Another $61.7 million went to the State Infrastructure Bank, while the State Highway Fund received $37.5 million, according to DMV’s report.

S.C. Department of Transportation spokesman Pete Poore told The Nerve that the money is used for road maintenance and other road projects.

“Some of DMV fees, specifically truck fees, are required to be sent to the State Infrastructure Bank and the State Highway Fund,” he said. “That’s the funding source for road improvement and projects. The banks lend out the money, get repaid and then lend it out again.”

Other state agencies that received fees collected by DMV last fiscal year included the departments of Revenue ($35.1 million), Public Safety ($15.7 million) and Insurance ($2 million), according to DMV’s report.

Colleges and universities, both in- and out-of-state, collectively received hundreds of thousands of dollars in fiscal 2012 from specialty license plates issued by DMV. The University of South Carolina, for example, received nearly $225,000, while Clemson University took in nearly $178,500, DMV records show.

Out-of-state schools that were the recipients of S.C. specialty-plate fees included the University of Georgia ($11,851), Auburn University ($11,785), University of Florida ($5,746) and Ohio State University ($1,787).

State law allows nonprofit organizations, including out-of-state colleges and universities, to receive specialty-plate fees provided, among other requirements, that the Department of Motor Vehicles receive at least 400 prepaid applications for a special plate or $4,000 from the organization or individual seeking the plate. A new law that takes effect Dec. 26 would raise the fee to $6,800, though it would eliminate the option of submitting the prepaid applications.

Tom Jackson, vice president of public affairs at the University of Georgia, told The Nerve that his school uses the fees for scholarship funding.

“It’s a way of promoting our school and bringing back money for scholarships funds,” he said.

University of Florida spokeswoman Janine Sikes told The Nerve that its specialty-plate fees are earmarked for the school’s Alumni Life Membership Endowment, which supports programs and activities of the alumni association.

Sanderson, DMV’s operations director, said his agency wants to keep its fees “cost-effective” to maintain its revenue stream.

“Our motto here is ‘good government is good business,’” he said.

Reach Legette at (803) 254-4411 or derek@thenerve.org.