Minnesota legislators approve $13 million for MNLARS fix

Minnesota legislators Monday approved millions in emergency spending and a new independent review to tackle lingering issues with the state's beleaguered online driver's license and vehicle registration system.

The proposal, which now heads to Democratic Gov. Tim Walz's desk, authorizes $13 million in state funds for technology improvements, maintenance and customer service support for the Minnesota Licensing and Registration System. It also directs a task force to issue recommendations for how to move forward with the system by May 1.

Walz, who is expected to sign the measure Tuesday, applauded the agreement, saying the spending is needed to improve experiences for Minnesotans and create "measurable, transparent outcomes" for ongoing improvements to the system.

"We are moving toward that final fix, to where we can put it in place, where Minnesotans will expect good customer service," Walz said.

MNLARS has been plagued by problems, including delays for motorists seeking new vehicle tabs, plates and licenses, since its launch in 2017. The need to address the setbacks and broader issues within the state's Information Technology Services agency has been a thorn in Walz's side during his first two months in office.

Two recent reports released by the Legislative Auditor put the issue back in the spotlight. The reports blamed missteps by the IT Services Agency and the Department of Public Safety for the failures and called for more oversight and accountability measures moving forward.

The latest appropriation will not be the Legislature's final word — or spending — on the issue. Another pending bill would approve $10 million to reimburse the registrars who run licensing bureaus for costs they incurred because of the system's troubles. House Republicans opposing the bill questioned why that money, which was in an earlier version of the bill passed Monday, wasn't part of the final package.

"These folks have suffered greatly," said Rep. Paul Torkelson, of Hanska, Republican lead on the House Transportation Finance and Policy Division.

Supporters argued immediate action on the stopgap funding was necessary given a March 5 deadline to extend contracts for staff working on the issue. Leaders pledged to continue to work on legislation to refund the registrars.

"The temporary contractors that are currently developing the system, if they leave, they take with them the knowledge of being able to fix the system if it breaks down," said Sen. Scott Newman, chair of the Senate Transportation Finance and Policy Committee. "And we simply cannot allow that to happen."

The May 1 deadline for the expert report, the Hutchinson Republican added, will give the Legislature time to consider other spending needs and fixes before the session ends in late May. Newman said he expects that review to address whether recent updates to the system are on the right track, how much more money should be spent and whether the state should continue to lead development or "take it off ramp and begin talking to the private sector."

As part of the deal to pass the MNLARS money, lawmakers also authorized $98 million in state-backed borrowing to fund a variety of projects. The projects, including highway rehab, regional parks and the cleanup of a toxic closed landfill in Andover, were approved by legislators last year but tied up by a lawsuit over the funding source. This proposal draws from a different pot of money.

Like the MNLARS funding, some of the projects in question faced make-or-break deadlines in the coming days. Rep. Peggy Scott, R-Andover, said that failing to act would have increased the cost of the landfill cleanup in her district. Already, the project needed $4 million more than was approved last year.

"It really is important to my community," she said. "Thank you for doing the right thing."

Senate Majority Leader Paul Gazelka, R-Nisswa, said Monday's agreement suggests lawmakers from both parties and Walz will be able to work together to tackle big issues this session.

"It's a good sign of things to come that we were working on things and we got them to a place where we could pass them," Gazelka said.

Jessie Van Berkel contributed to this report.