Florida Tax Collectors Warn Plan to Privatize and Centralize License Tag Mail and Internet Orders Will Cost Drivers More, Reduce Customer Service
Contact: Jon Peck
850-222-1996
Florida Tax Collectors Warn Plan to Privatize and Centralize License Tag Mail and Internet Orders Will Cost Drivers More, Reduce Customer Service
TALLAHASSEE – Florida’s tax collectors, local officers directly accountable to the public, today warned that a sweeping plan to change the way Florida’s license tags are issued will create a host of unanticipated problems for drivers – including delays, lack of accountability, higher costs to consumers and reduced customer service.
At a news conference, Florida’s 67 tax collectors voiced concerns about proposals that would eliminate Florida’s current system for fulfilling mail and online orders at the local level and urged the Governor and Cabinet to carefully review any proposal that would privatize and centralize that function. In discussions with the tax collectors, Department of Highway Safety and Motor Vehicles (DHSMV) Executive Director Julie Jones has been responsive to these concerns and agreed to separate consideration of the distribution method from plans to redesign all vehicle tags, but the tax collectors want clearer assurances that the state will not go to a privatized, centralized distribution system. The tax collectors also offered a set of recommendations that would make the current system more efficient and generate more savings than the proposed changes.
The tax collectors are joined in their concerns by the state’s foremost consumer advocate and a coalition of organizations that fear the new system will fail to meet car purchasers’ and fleet owners’ need for speedy issuance of vehicle tags. In addition, a new report by Capital Analytics – a policy research company headed by longtime government budget director David Coburn – finds that the plan to issue tags from a centralized location would not produce the savings projected by the state.
“Our issue is not with the change in the plates. Our concern is with the idea of scrapping a system that currently works well for the people of our counties and replacing it with a system that hurts customer service, costs drivers more money and provides no real benefit to the people,” said Leon County Tax Collector Doris Maloy, president of Florida Tax Collectors, Inc. “If the state plans to reissue every tag in Florida within two years, we are prepared to accomplish that with an emphasis on outstanding, local customer service.”
DHSMV recently announced plans to redesign Florida’s license tags using a flat plate technology, which it says will make the tags more readable by tollbooth and red light cameras. The department has also proposed turning production and distribution of many tags to a single private company, removing the tax collectors from their public service role distributing convenience tag renewals.
Maloy said the proposal will cost consumers money in the 16 counties that currently add no service charge when fulfilling mail and Internet orders, since the private vendor would add the charge for all tags. In addition, she said, customer service would suffer dramatically if such an important process is stripped from responsive, local public officials and turned over to a private, for-profit vendor. Maloy said the tax collectors have enjoyed a long and cooperative relationship with DHSMV and trust the department to recognize that improvements to the existing system are preferable to eliminating a system that has served the public well.
Walter Dartland, executive director of the Consumer Federation of the Southeast, said the impacts on the consumer must be foremost in deciding on such a sweeping change. Dartland praised DHSMV and the tax collectors for working in partnership in recent years to make tag and license services more consumer-friendly.
“Sometimes the most important question to ask is not what a proposed change would save, but what it would cost consumers,” Dartland said. “If taxpayers are losing time, local customer service and accountable oversight, that’s a steep price with no real benefit for consumers.”
Florida Tax Collectors Inc., the elected officials’ organization, commissioned Capital Analytics LLC to evaluate the impact of the DHSMV plan. Capital Analytics, under the leadership of former state budget director Coburn, cited numerous instances of incorrect assumptions underlying the DHSMV proposal about revenues and the tax collectors’ ability to handle distribution of 15 million tags next year.
“(T)he state has experienced a number of serious setbacks in implementing complex, statewide systems in recent years. If there are serious problems with implementation or ongoing operation, the tax collectors will have already given up much of their capability to step in and deliver these services. A replacement vendor who can pick up immediately is unlikely to exist. Clearly, this scenario is not far-fetched. We see no indication that contingency planning has been considered at all by the department,” the Capital Analytics report says.
Capital Analytics has noted that the annual savings, estimated by DHSMV at $123,000 per year, would be offset by some $400,000 in startup costs including development of bid requests, vendor selection and independent contract monitoring. Production of new tags will cost an estimated $31.4 million.
The tax collectors have offered a set of cost-saving recommendations, including: working with the DHSMV Executive Director, partners and stakeholders to look together at the future of motorist services; changing the tag inventory system and reducing the number of inventory locations from 1,300 to 67; realizing a 41% reduction of tag inventory by removing the county name from tags; utilizing smart distribution methods to realize toll readability revenue and reduce costs by first distributing the new tags to regions with the highest volume of toll traffic; and working with Electronic Filing System dealers to reduce the 8% in waste often cited by DHSMV.
Palm Beach County Tax Collector Anne Gannon said the department failed to cite any savings associated with a switch to a central issuance system. Instead, she said, citizens can expect an erosion of customer service, including a longer wait to receive tags ordered via the Internet. Currently, those orders are fulfilled locally and can be turned around the same day.
“As elected officials, we tax collectors know that customer service has to be priority number one at all times,” Gannon said. “The people we serve expect to be able to come to our offices for one-on-one assistance with a wide range of concerns, and this proposal will only add confusion, irritation and frustration. It is not a good idea.”
Gannon predicted that customers who have problems with mail or Internet orders under the new system would likely show up at local tax collector offices for help, but the tax collectors will have no record of those transactions and no way to solve problems.
DHSMV recently said it would unhitch the discussion about how the tags are distributed from the proposal to change how they are made. But Maloy said the tax collectors remain unconvinced because the department continues to change its description of its plan and is still calling for centralized distribution of mailed and Internet tags.
“We are concerned that the wholesale privatization and centralization of license tag issuance is still very much an issue in play,” Maloy said. “Regardless of what is decided about the tags, we are seeking assurance that our existing, customer-friendly system of local fulfillment will remain in place. Tax collectors have risen to every challenge when services have changed before, and we can do it again.”
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About Florida Tax Collectors, Inc.
Florida Tax Collectors, Inc., is the statewide association of the 64 elected and 3 appointed tax collectors serving local residents throughout Florida. The organization is a united team of tax collectors committed to effectively meeting the needs of citizens by sharing knowledge, experience and best practices to solve challenges faced by the public.
Additional Comments on DHSMV Proposal
Calvin Hill, Sunshine State Tag Agency:
“In our experience as a nationwide provider of licensing services, we have come to realize the current Florida model of license plate distribution is the best in the country. As a result, we adamantly oppose any form of Central Issuance/Direct Mail of license plates and decals. We represent every major rent- a-car, trucking and leasing company in the country. They and their customers depend on the level of service that only a localized distribution of license plates can provide.”
Ted L. Smith, President, Florida Automobile Dealers Association:
“FADA supports the efforts of the DHSMV to redesign Florida’s motor vehicle license plates. FADA does not support the future development of a central issuance facility for all Florida tags. Florida’s new car, franchised dealers enthusiastically support the continuance of the electronic systems available in Florida as a means of properly titling and registering vehicles, and providing new license plates for customers directly at the point of sale. Dealers utilize these systems today as a customer convenience and believe that maintaining this dealer-provided service is essential for customer satisfaction.”
Jon Ferrando, General Counsel, AutoNation:
“When a customer buys a car, we want to make the tag process as convenient as possible, so they can drive off with the car they’ve purchased. The current system meets our customers’ needs very well. We are very concerned that the proposed change may introduce unacceptable delays and inconvenience.”
