Senate approves $10 million for MNLARS

Republican state senators and DFL Gov. Mark Dayton agreed on the first steps Monday toward fixing Minnesota's troubled vehicle registration and license system, but political roadblocks still loom.

Long-planned, expensive upgrades to the Minnesota Licensing and Registration System (MNLARS) have fallen far short in recent months. Rampant software glitches have delayed the distribution of tabs and titles, prevented the transfer of specialty license plates and caused numerous other problems for residents, auto dealers and state contractors who operate vehicle services offices.

As problems multiply, so has partisan tension between the Dayton administration — which is overseeing the project — and Republicans who control the Legislature. But on Monday, the state Senate approved an initial $9.65 million injection of state money that would let the administration avoid pending layoffs of technical staff and cover other costs of fixing the system that the state rolled out last summer.

"This is the best shot that we have at moving forward with resolving the MNLARS issue," said Sen. Scott Newman, R-Hutchinson, chairman of the Transportation Finance and Policy Committee. "It isn't all that pretty, but this is a very unusual situation that we have found ourselves in."

A number of DFL senators joined Republicans to approve it on a 47-20 vote. Dayton would support the measure, spokesman Sam Fettig said.

"The Governor appreciates the Senate Bill being a reasonable resolution," Fettig said in a statement.

The legislation creates a steering committee to oversee progress on the system and review quarterly reports from staff managing the project. It designates $350,000, available through June 2019, for an information technology auditor to monitor and report on the development of the licensing and registration system.

The Senate's nearly $10 million appropriation would head off the most immediate crisis, but it would last only through July. The administration said it needs an additional $33 million to make MNLARS fully operational. The state has already spent at least $93 million on the project.

In addition, the money is not yet a certainty. Later in the day, the GOP-controlled House voted 98-27 against proceeding with the Senate bill, approving instead legislation with more stringent guidelines for spending and a requirement for monthly progress reports instead of quarterly.

But the biggest divergence between the House and Senate versions is over funding.

The Senate bill uses the approach Dayton supports: drawing from revenue available in the driver and vehicle services operating accounts. The House bill, authored by Transportation Finance Chairman Paul Torkelson, R-Hanska, also designates $10 million from those accounts for the MNLARS fixes but requires Dayton cut that amount from his budget for executive agencies. The DFL governor has said he would not agree to that.

The two bills will head to conference committee, where Torkelson said he plans to defend his version.

"It's not the end," Torkelson said on the House floor. "This program is not working. We do have some serious issues with the administration and how they have administered this program."

Meanwhile, DFLers said the clock is ticking to get the money in place. Officials with Minnesota Information Technology Services and the Department of Public Safety, who are handling the MNLARS rollout, have repeatedly stressed to legislators that they will have to start laying off contractors at the end of March without the $10 million. They said contractors are already departing because of the uncertainty.

Sen. Scott Dibble, DFL-Minneapolis, said he fears the Republican majority will use that money as leverage during negotiations later in the session. Newman wrote the Senate bill and worked with Dibble over the weekend to come up with the version the Senate approved.

Both senators said they made concessions.

Newman wanted to allot $7.3 million for MNLARS, but agreed to almost $10 million. However, the measure limits most of the spending to technology costs and software improvements.

Dibble and other DFLers unsuccessfully pushed for an amendment to allow the money to also be used for staff to respond to calls and e-mails from residents. Republicans noted that more than 40 people are already handling customer service.

Dayton, as part of a budget and tax proposal he presented last week, suggested reinstating a $2 fee on driver's licenses and other transactions to help pay for MNLARS fixes. Rep. Sarah Anderson, R-Plymouth, proposed the fee Monday as an amendment. It failed — a message to Dayton, she said, that the House doesn't support it.

In the Senate, Newman said he would be hesitant to reinstate the fee.

"I would really be interested in hearing the rationale for imposing this fee once again on the people in the state of Minnesota, who in my mind have already paid for the system," Newman said. "They just didn't get their money's worth."

Jessie Van Berkel • 651-925-5044