It’s getting late to change late fee
A state Senate committee is expected to vote today on a bill that would reduce Colorado’s late fee for registering a vehicle after its current registration has expired.
The bill is expected to die, and the fee remain on a sliding scale based on how late the registration is, with the maximum fee of $100. But the Senate might be able to salvage the measure if it accepts an idea from Sen. Steve King, R-Grand Junction.
In a committee hearing earlier this week, King suggested reducing the maximum late fee to $25, with a proviso that the maximum fee be bumped back up to $100 if the lower fee prompts many motorists to avoid reregistering their vehicles on time.
That seems like a reasonable compromise.
Along with many others in Colorado, we objected in 2009 when the Legislature enacted the $100 maximum fee for late registration of a vehicle as part of a larger bill that increased vehicle registration costs to raise more money for highways.
As originally adopted, the fee applied even to things like boat and recreational trailers, which people often left unregistered for a year or more if they weren’t using them. Penalizing people for choosing not to use recreational trailers on state roads for a year or more seemed like a poor way of raising money for highways.
That measure was changed in 2010, however. Additionally, motorists in Colorado have responded over the past three years by doing a better job of getting their vehicles registered on time.
According to legislative testimony from the Colorado Department of Transportation, the number of late registrations has dropped by approximately 80,000 vehicles since 2009, and the average late fee has decreased from $60 a year ago to $38 now. Clearly, the economic incentive to avoid registering late has had an effect.
Supporters of reducing the late fee might have better luck winning support among lawmakers if business groups were universally behind it. But that’s not the case.
As The Denver Post reported, the National Federation of Independent Businesses backs the bill to lower fees because some companies that idled vehicles at the beginning of this recession now can’t afford the late fees to get them all back on the road.
The Colorado Contractors Association, on the other hand, opposes the bill because the current late fees raise an estimated $12 million a year for road and bridge construction.
However, based on the declining number of people registering their vehicles late, it’s clear that revenue stream can’t be counted upon to continue at the same level, even with a maximum fee set at $100.
The purpose of the late fee should be to encourage people to register their vehicles on time, and that is occurring now. King’s idea offered a reasonable way to lower the fees and to ensure late registrations don’t unreasonably surge again.