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Out of State Plates Serve Up High Costs
During the past four years I have personally spoken to Mayor Michael Bloomberg and his top aides about the big problem out-of-state motor vehicle registrations are in New York City. New York City hasn’t done anything to help this or similar high profile auto-related issues.
Fortunately, the New York State Commission of Investigation realized what a potentially big problem this is and began an investigation. They just released their report and the results are exactly what I forecast. Rate evasion, the practice of registering a vehicle in another state to take advantage of lower insurance rates and non-enforcement of other laws, is extremely costly to the city and state.
I spoke to Mayor Bloomberg about using the availability of the Insurance Information and Enforcement System (IIES), a legislative initiative I sponsored, to allow police and parking agents to utilize their handheld scanners (which the mayor adopted as per my suggestion) to also identify scofflaws and whether an automobile has been stolen. The IIES program established a database to identify uninsured motor vehicles.
Subsequent to this conversation, I met with then Commissioner of the Department of Motor Vehicles Ray Martinez, his staff and New York City’s Finance Commissioner Martha Stark and staff, where it was determined that if the full potential of scanners were utilized, approximately $275 million in additional annual revenue could be raised for the city. That was three years ago, and the city has lost close to $1 billion in revenue.
According to the Commission’s report, when people don’t obey existing laws, both New York City and State are deprived of sales and use tax revenue imposed on automobile purchases, and the state and city also lose out on numerous fees such as license plate fees, title certificates, vehicle registrations as well as annual renewal fees. The Commission’s investigation also revealed that New York City is deprived of millions of dollars in uncollected parking and traffic violation fines.
For many New Yorkers who do not want to pay for automobile insurance as they are required by law, illegal registration is the best way to avoid it completely. They register their cars in states that have lower insurance standards and also an inability to know when their insurance is dropped. This not only drives up New York insurance rates, but leaves car accident victims unable to collect what is properly owed them.
The COI reported, in 2005, more than nine million parking summonses were issued in New York City. Of that number, 295,963 summonses were issued to 127,243 Pennsylvania registered vehicles. As of February 2006, 152,957 of those parking summonses remain outstanding. The sum of the total amount in unpaid fines due to the city is $14,314,776.05. Additionally, as of August 22, 2006, 181,976 parking violation summonses had been issued in New York City to 82,288 Pennsylvania registered vehicles, of which 111,398 remain outstanding. The total amount of unpaid fines due to New York City for these summonses is $9,635,004.21.
These figures represent vehicles only registered in Pennsylvania.
The Pennsylvania snapshot is more proof of how inefficient the city is in collecting the $275 million a year that was anticipated. This does not count the additional costs motorists have by paying higher insurance costs and higher local taxes.
Not only are the costs significant, there is evidence that persons engaging in rate evasion are multiplying. I have been telling the mayor about this problem for years and he has done nothing. Meanwhile these illegal practices have continued to the obvious dismay of city residents.
Ivan Lafayette is a Democrat representing the 34th Assembly district, covering parts of Queens. He also serves as the deputy speaker of the Assembly.
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