What’s in the Public Safety budget?

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HB114 – the state’s transportation budget – was released today, and hearings were held in the House Finance committee. In this post, we will focus on the Department of Public Safety, which receives its funding through the bill because it receives some gas tax revenue.

The most interesting aspect of Director Tom Charles’ committee testimony was his taking responsibility for the decision to close the Statehouse to protesters and admitting that some witnesses were not allowed into the hearing. Other than that, it was a very routine budget request with very few surprises.

Here is what we took away from it:

  • With one notable exception, compared to 2010-2011, nearly every category of spending was down, reflecting decreased revenue from fees, fines and other sources. The Department no longer receives any GRF funding, and only a small amount of its revenue comes from the gas tax – an amount nearly equivalent to what it received in the last biennium.
  • The main exception to across-the-board decreases in funding was in the “Security and Investigations” line item at the Highway Patrol. This fund, which pays for the Governor’s protection, is flat-funded compared to 2011.
  • All the fee increases included in the last biennium to fund the Highway Patrol were retained – including the $20 late fee on vehicle registration renewals – except for the late fee on drivers license transactions. Watch for the Senate GOP in particular to push back – while they pushed for it as a solution to the Patrol funding problem in 2010-2011, they have taken heat from constituents, and have raised issues about late fees for vehicle registrations applied to snowbirds living part of the year in Florida, or for those who only use their vehicles for part of the year in Ohio.
  • A new fee increase of $10 per title transaction was included to make up for the lost revenue from drivers license late fees. Considering that the majority of this will come from dealer to dealer transactions, expect heavy lobbying from the auto dealers association. In response to questioning, Director Charles also essentially admitted that raising fees could be portrayed as a tax increase.
  • Lastly, our favorite tax credit, the “shrinkage allowance”, a credit that petroleum dealers and retailers receive against their motor fuel taxes due to the state, to compensate them for evaporation or “shrinkage” of fuel during transport, was continued at the levels of the 2010-2011 budget. While written in temporary law, the credit had been 3 percent prior to FY2008, but has been set at 1 percent for the past 2 years, providing an additional $15 million per year for the Patrol. The petroleum industry will be asking for a restoration of the larger credit they once received, but it will be a tough sell, as the alternative would be more fee increases or taking gas tax dollars from road construction.

All in all, the DPS budget so maintains the status quo that it looks like a copy and paste job from the last biennium. No serious attempt was made to continue earlier efforts to take the Patrol all the way off the gas tax, and no permanent, sustainable source of funding for the Patrol was identified. And even after a legislatively-mandated mission review task force was completed last biennium, which included Director Charles as a participant, no scaling back of the Patrol’s duties was incorporated in statute to help control costs.

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