Plan to rebate car registrations is under fire

Thursday, Feb. 3, 2005 | 9:34 a.m.

CARSON CITY -- Gov. Kenny Guinn has a lot of work ahead of him in convincing state legislators to approve his plan to rebate $300 million to Nevada motorists.

Members of the budget committees of the Legislature on Wednesday raised a number of questions about the administrative costs and whether it would reward those who were not hit with the tax increase in 2003.

Guinn proposed rebates of up to $300 per car registered to Nevadans. That would mean mailing out more than 2 million checks. A person who owned more than one vehicle would get a rebate on each car.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said he examined such a plan during the interim. He said its administrative costs would be $6 million, not the $2.3 million set aside by Guinn.

Postage alone would be $730,000, Hettrick said.

Michael Hillerby, chief of staff for Guinn, and Ginny Lewis, director of the state Department of Motor Vehicles, said the procedure for getting the money to the motorists was still being worked out. Hillerby said private business might be used to process the checks. He said he thought the $2.3 million was a reasonable number.

To cut and send the checks through the state system would take many weeks if not months, according to state Treasurer Brian Krolicki. Outside of the hearing, Krolicki said he has received some informal bids from banks that might be contracted for the work.

Sen. Bob Beers, R-Las Vegas, asked if the state would be required to send out 1099 tax forms at the end of the year to the recipients of the rebate, to show on their federal income tax. Hillerby said the state didn't know yet.

Instead of sending out checks, legislators wondered why the Department of Motor Vehicles could not just credit the rebate to the current registration bills. Lewis said that would require extensive computer programming and it would be a "nightmare" to do it that way.

Lewis said the rebates would not be going to those who owe the department money or have "flags" on their registration. For instance, a person who has unpaid parking tickets with local governments would not get a check if there was a notation on his registration. An individual with two DUIs has his vehicle registration suspended and would not receive a rebate and there would not be any money flowing to governments whose vehicles are exempt from the registration fees.

Hettrick said it wasn't the owners of motor vehicles that got hit with the $833 million tax increase in 2003, but they were getting the rebate.

Hillerby said a number of plans were examined to give relief to the taxpayers and this was the fairest. For instance, he said the governor considered a sales tax holiday. But that would require people to spend more money to gain any benefit.

Assemblyman John Marvel, R-Battle Mountain, asked if taxicab companies would get a rebate on each of their vehicles. "If they had 1,000 vehicles, they would get $300,000," Marvel said.

Hillerby replied, "The governor is adamant that if you paid the registration fee, you ought to get it back."

Senate Majority Leader Bill Raggio, R-Reno, said this rebate would be paid with a one-time surplus and he suggested that the public would come to expect this every year. Hillerby agreed that some people might expect it. The suggested budget doesn't predict for a big surplus in the future.

Raggio said some of this money could be put in the "rainy day" fund to be used when there is a slump in tax revenues or it could be used to pay cash for new buildings instead of going into debt.

Assemblywoman Chris Giunchigliani, D-Las Vegas, suggested the money might be used at the offices of the DMV to reduce the waiting time of customers.

Lewis said that the waiting times at the DMV offices in Las Vegas that were 90 minutes and longer in 2003 have been shaved to a maximum of 57 minutes.