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DMV privatization plan gets cool reception from Alaska lawmakers

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The Dunleavy administration says its plan to sign up private vendors to offer DMV services in the communities of Haines, Homer, Valdez, Eagle River, Delta Junction and Tok, allowing it shutter state-run offices there could save around a half-million dollars.

DMV officials say that if the private vendors — which have yet to be named — don’t materialize the residents in those communities would still be able to access alternate sites by driving more than a hundred miles or taking a state ferry to the nearest office.

“One of the big reasons that the six locations were selected that were selected was because they were on a transportation system,” Division of Motor Vehicles Director Jeffrey Schmitz told a House Finance subcommittee on Thursday.

He delivered a nine-page presentation that showed that all but one of the six offices slated for closure has served less than 1% of Alaska’s population. 

“And so these were other factors that were considered in selecting these locations for this proposal is the fewer transactions at those locations actually process,” Schmitz said.

Vendors would be allowed to levy service fees on top of what the state already charges that officials admit could end up doubling the cost of driver’s license renewals and other routine services.

But even urban lawmakers seized on this as an unfair cost-shifting onto rural Alaska without any price controls.

“I’m troubled with the notion that a  contractor in Haines or Tok or other places could basically charge whatever the market bears and charge a whole lot more than whatever happened in Anchorage,” Rep. Adam Wool (D-Fairbanks) said.

Rep. George Rauscher (R-Sutton) whose district covers a swathe of Interior Alaska mostly north of the Glenn Highway says the state needs to consider the repercussions.

“Rural areas are going to take the hurt more than then non rural areas — and that’s a fact,” he said.

All of the DMVs targeted for closure are on Alaska’s road system. Except for Haines. Its highway runs through Canada which has severely restricted travel across its borders throughout the coronavirus pandemic. 

Roy Getchell, the Haines schools superintendent, told CoastAlaska that for high schoolers losing the DMV would be a major barrier to taking a driver’s exam and getting a license as the nearest state offices are in Juneau or Skagway.

“It would mean trying to find a ferry and you know what a struggle that has been,” Getchell. “It would be days at a time, a pretty serious expense for their family.”

The plan has also been panned by state Republicans who are allied closely with Gov. Mike Dunleavy.

“I am concerned that the private partnerships that we create, are only able to sustain their service if they’re demanded by enough people willing to pay the premium for that service,” Rep. Ben Carpenter (R-Kenai) said. “I’m not sure that that’s a good option for people living in rural communities.”

Under questioning by committee members, Department of Administration Commissioner Kelly Tshibaka, who oversees the DMV, was asked whether her agency would respect the will of lawmakers if the privatization and closure plan was rejected.

“My intent is to respect that wish,” she replied. “If we were going to close these anyway, we wouldn’t have put them forward as a budget proposal, we would have just done that.”

But some lawmakers aren’t taking Tshibaka at her word; they’re working on legislation to block the plan.

“Her statements are inconsistent. We need to keep the DMVs open,” Rep. Zack Fields (D-Anchorage) told CoastAlaska. He says legislators can’t dictate how the executive runs an agency.

“But what you can do is prohibit the Department of Administration from closing DMVs in communities with 900 people or more, which would have the effect of protecting our existing DMVs,” Fields said.

He says he’ll be introducing a House bill that keeps DMVs open across rural Alaska.