Montanans paying $25 million in new vehicle fees next two years - KTVQ.com | Q2 | Continuous News Coverage | Billings, MT

Montanans paying $25 million in new vehicle fees next two years

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Vehicle-registration fees are going up Vehicle-registration fees are going up

As of this month, everyone gassing up in Montana is paying higher fuel taxes – but Montana drivers also face $25 million in higher vehicle-related fees over the next two years.

The increased fees – most of which are on vehicle registrations – are the second, less-publicized part of a highway-funding package passed by the 2017 Montana Legislature and signed into law by Gov. Steve Bullock.

State motor-fuel taxes increased July 1 by 4.5 cents per gallon for gasoline and 1.5 cents per gallon for diesel, estimated to raise $55 million over the next two years for highway, street and road construction and maintenance.

Lawmakers and state agencies that worked on the entire funding package say it not only increased state money for highway construction, but also maintained budgets for other vehicle-related services, like the Montana Highway Patrol and issuance of driver’s licenses.

“No one likes to pay additional fees, but no one likes to wait in longer lines at the Motor Vehicle Division and no one likes to sit on the side of the road at 11 o’clock at night and not have a Highway Patrol trooper come out to respond to their incident,” Department of Justice spokesman Eric Sell told MTN News. “This was necessary to ensure that the Department of Justice can continue providing the services that the people of Montana depend on.”

The fee increases include:

  • A $5 charge on each vehicle registration, to fund salaries for the Montana Highway Patrol. Raises about $10 million over next two years.

  • A $16.50 charge on temporary registration permits, for newly purchased vehicles. Raises $4.6 million over next two years.

  • Effective next January, an additional $825 registration fee for vehicles worth more than $150,000 and 10 years old or less, and an additional $800 registration fee for motor homes worth more than $300,000 and 10 years old or less. Raises about $5 million over next two years.

  • Effective next January, a 3 percent charge on vehicle registration fees. The fee is $6.81 for cars four years old or less, and lower for older cars.

  • Effective next January, a 3 percent charge on driver’s license fees, or $1.22 on the $40.50 paid to renew a license for eight years. These last two charges raise about $5.5 million over next two years.

Money from the charges taking effect next January will finance the state Motor Vehicle Division, which processes licenses and vehicle titles and registration.

This money – about $11 million, or 20 percent of the agency’s budget – will replace dollars that have been coming from fuel taxes.

Sell said leaving that fuel-tax revenue in the highway account means more money for highway and road construction, where the state gets up to a 7-to-1 federal match.

“This rearranging of things allows the state to leverage existing dollars to continue building roads and bridges, and really freed up a lot of money that wouldn’t have been able to match federal dollars,” he said this week.

Money from the increased fees on temporary registration permits will help fund the Montana Law Enforcement Academy, which trains law officers from across the state.

The Highway Patrol will continue to get most of its funding from fuel taxes.

Rep. Randy Brodehl, R-Kalispell, who carried one of the bills containing some of the higher fees, said he and other lawmakers initially wanted to use motor-vehicle fees to cover a shortage in the state highway account, to fund highway construction.

But when a majority of lawmakers decided to increase state motor-fuel taxes to fund highway construction, the fee increases were reduced from their original proposal, he said.

Brodehl voted against the fuel-tax bill but supported the bills containing the fee increases.

“With the gas tax going through, we wound up taking more money out of Montanans’ pockets than I wanted us to,” he told MTN News. “But the intent is to take care of Montana’s roads. …

“I can’t speak for everybody, but I think Montana needs to be on a pretty frugal budget.”

Brodehl said he considers the fee increases “pretty minimal,” and that he hasn’t heard much from constituents on the issue. He also said he thinks some of the motor-home fee increases will be paid by out-of-staters who've been taking advantage of Montana's unusually low registration fees and laws that make it easy for out-of-state residents to register some vehicles here.  

About Mike Dennison

MTN Chief Political Reporter Mike Dennison joined MTN News in August 2015 after a 23-year career as a newspaper reporter covering Montana politics and state government. While some may believe that politics are boring, Mike firmly believes that's not the case if you tell the story with pizzazz and let people know why the story is important.
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