State Leaders Urged to Consider Optional License Fee Increase

February 24, 2016

MORPC’s local government members are often faced with the question of how roadways and infrastructure can be better funded while their budgets are being constrained. Having every financial tool available at their disposal is essential, and that’s why MORPC raised the subject of license plate fees at a recent Statehouse hearing.

Tom Homan, a MORPC member and city manager of Delaware, began chairing MORPC’s License Fee Task Force in 2015. The task force was formed to closely look at the issue of license plate fees, the revenue these fees provide, and the purposes for which they can be used.

Homan recently testified at the Ohio Statehouse to the Joint Legislative Task Force on Transportation Issues, which is currently studying alternative methods for funding the construction and maintenance of Ohio's roadways and infrastructure. It will issue a report on its findings later this year, and MORPC believes a permissive license fee increase should be included.

A license plate fee is paid on vehicle registrations when purchasing or renewing your vehicle’s license plate with the BMV. Local governments have the option to levy the fee strictly for the purpose of planning, constructing, improving, maintaining, and repairing public roads, highways and streets. Currently, the total combined fee by all local governments (county, township or municipality) is capped at $20 – an amount that hasn’t been increased since the late 80s.

“In the City of Delaware, like in all small communities across Ohio, the cost of construction materials has experienced substantial increases over the past 15 years,” Homan said at the hearing. “As a result, the purchasing power of all funds available for transportation improvements, including license fees, is now significantly reduced. This places a higher burden on communities to effectively maintain transportation infrastructure.”   

A voluntary survey of MORPC member governments found that two-thirds of the communities have postponed doing repair or other road or bridge projects because of a lack in funding. MORPC’s position is that the capped fee amount of $20 should be increased by a modest amount in order to meet today’s needs and be brought up to inflation.

Because the fee is permissive and many communities either do not currently have a fee or are not currently at the maximum amount, having the ability to increase it would not be an automatic increase across the state. And although an increase won’t fix the problems seen in transportation funding, every little bit counts, and local governments deserve the flexibility to decide if it’s right for them.

Tom Homan’s testimony can be viewed here, in addition to a map of license fees by municipality.

More information on the Joint Legislative Task Force can be found on its website, including the report it issued in 2015.