Whenever I see Republican’s offering up “creative” ways to collect revenue I get suspicious. Their first inclination—particularly given the recent liberal spending binge in Concord—should be to get rid of the spending not find ways to justify it. So SB 385 struck me more as an excuse rather than a reason, and when you come right down to it it’s just another tax. But then a little bird asked an important question. What if it was free market driven?
SB 385 would attach an additional fee on low digit plate holders, from $250.00 to $2000.00 dollars annually, just for the privilege of keeping a State license plate with four or fewer numbers on it.
261:89-d Low Digit Number Plates. Holders of number plates bearing one, 2, 3, or 4 digit numbers shall pay an annual low digit number plate fee, which shall be in addition to any other registration or plate fees. The annual low digit number plate fee shall be $2,000 for a one digit plate, $1,500 for a 2 digit plate, $500 for a 3 digit plate, and $250 for a 4 digit plate.
It's a limiting, and terminally declining source of income to the treasury. It can never get any bigger than the math allows, and it's a tax.
So I’m against that. I think it’s unfair and overly selective, and it prices people out of their possession of such a plate if they don’t happen to have the money. But, that does not mean there are not opportunities.
Delaware has a program run through a website called lowdigittags.com. It is state sponsored eBay like exchange for specialty plate holders, where they offer to sell their low digit plate for whatever the market will bear. The state helps these folks meet up, assists them in the proper transfer and registration process, and collects a registration transfer fee on each transaction. I’m not sure if Delaware also taxes the retail value of the sale as well, but I would not encourage that here. But in this model, the original plate holder can make some cash, the plate buyer has parted with their money willingly, the state makes some "revenue" on the transaction, through a free exchange of commerce overseen but not over regulated by force of law.
But I’m thinking, why limit it to low numbered plates? There are plenty of vanity plates that might be appealing to people when someone no longer wants it. It might also inspire a rush on requests for new vanity plates moving forward with an eye towards a lucrative resale later on, which would also add money to towns and the state by using public incentive and a free market process that uses existing law to add revenue, instead of a new top down onerous tax on a small sliver of the population.
There are certainly issues I’ve not imagined, but I view them (for the moment) as being better than the tax that is SB 385.
The current bill is estimated to cost about $78,000.00 to implement programming changes to the existing state system with no clear idea how much revenue could be expected. A different system would probably cost more, but why not try to incentivize a private company to do the heavy lifting in exchange for a small per transaction fee?
Whatever the answer, I think it’s probably better than what SB 385 offers us now. But if there is no reasonable free market solution, or the mechanics of the plate transfer idea show no promise, then I think we should kill the bill. It is the selctive taxation of a few to justify spending we never really needed. Just cut the spending instead.