Layoffs loom as legislators decline $10 million for MNLARS fixes

Almost 40 workers assigned to fix Minnesota's troubled multimillion-dollar vehicle licensing system will be laid off at the end of March after legislators Thursday rejected an emergency $10 million infusion for system repair.

The House voted down a DFL motion to allocate money from the state's Driver and Vehicle Services agency to the beleaguered Minnesota Licensing and Registration System (MNLARS), whose problems have meant long lines and waits for Minnesotans seeking vehicle services. Republican lawmakers had pushed back, saying they wanted to know exactly what the money would be used for and suggesting that Gov. Mark Dayton should find the $10 million within his executive budget.

When MNLARS was rolled out in July, its costs were initially estimated at $48 million before soaring to $93 million as glitches piled up. The $10 million denied Thursday was part of a further $43 million request made this year for continued repairs to the system.

If the requested funding were granted, total MNLARS costs would approach $140 million.

The state Department of Public Safety and Minnesota IT Services (MNIT) have overseen the MNLARS rollout. Officials from those agencies said they have added 101 fixes and features to the system over the past few months. Last month, they proposed a road map to fix all "high-priority defects" by June 2020.

In January, DPS and MNIT informed the Legislature that they needed another $43 million to fully fix the system.

MNIT said in a news release Thursday that it "will not be able to continue fulfilling contracts" for 39 contract workers who have been implementing MNLARS fixes. Those workers received layoff notices Thursday. Contracts will be terminated by the end of March, according to a letter MNIT Commissioner Johanna Clyborne sent to members of the House and Senate.

Paul Torkelson, R-Hanska, chairman of the House Transportation Finance Committee, said in a statement Thursday night that legislators now will review the full funding request in detail and "take action as appropriate."

"Like taxpayers, we are disappointed with Governor Dayton's failure to deliver a functioning DMV system, and that his administration has mismanaged their budget," Torkelson said. "It is my expectation that work will continue on improving MNLARS at its current pace."

In her letter to legislators, Clyborne wrote, "The loss of knowledgeable contract staff working on the MNLARS system will have a crippling effect on our ability to maintain the pace of progress on system improvements. Even if funding is made available in the weeks ahead, it will take a number of months to sufficiently acclimate new contractors to the system so that they can be productive in their work."

A handful of permanent staffers will remain, MNIT said. In the time being, resources will be allocated to maintain the system and oversee implementation of Real ID, the federal law establishing tougher security standards for state-issued driver's license and ID cards.

At a House Transportation Finance Committee hearing last week, Republican lawmakers criticized Dayton's administration for the botched rollout of MNLARS and questioned why the $10 million request did not come earlier.

Just before Thursday's vote, Rep. Rick Hansen, DFL-South St. Paul, argued for the $10 million expenditure, saying there's "a cost to inaction."

"Unfortunately, Republicans are obsessively focused on problems while avoiding responsibility and problem solving," Hansen said in a statement. "A month ago, Governor Dayton alerted legislators to his funding needs and that contract layoffs notices would go out March 1st if they weren't met. ... Republicans don't seem to care. They can blame Governor Dayton all they want, but their inaction today puts the responsibility squarely on them."