MVC collects $1.2B in fees but can’t upgrade its computer system
The system outage that knocked the Motor Vehicle Commission offline from Saturday through Monday afternoon was an unwelcome reminder that the MVC’s computers are ancient and not getting fixed soon.
Terminals at MVC offices are nearly 40 years old and the agency’s servers are near the end of their life. A modernization contract awarded in 2008 wound up being cancelled, and MVC chief administrator Sue Fulton said driver’s license security upgrades are now the No. 1 priority.
“We still have upgrades that we need to do. I think there’s just been a lot to do and a sense of priority that we’re doing Real ID, and then we’ll worry about everything later,” Fulton said at an Assembly budget hearing.
“But honestly that makes sense. We need to do REAL ID,” Fulton said. “We need to get that effectively done in terms of going back to our mission, right? Keeping New Jersey drivers safe and delivering customer service. We need to get that done.”
The MVC collects $1.2 billion a year in fees but spends just 30 percent of that on its own operations, $354 million. Assemblywoman Eliana Pintor Marin, D-Essex, said that needs to change, particularly given the persistent computer problems.
“Maybe next year focus on maybe not being so generous in giving back money but really taking some of that money and really doing some serious, serious upgrades,” said Pintor Marin, who heads the Assembly Budget Committee.
In 2008, the MVC hired Hewlett Packard for $39 million to replace its 1970s technology. Six years later, the contract was terminated with only part of it done – at a cost of $21 million, plus $13.3 million paid to a third-party oversight vendor.
After the MATRX project was terminated, the MVC put together a five-part Transformation Project. But only the commercial driver’s license section has been completed, with progress on the other parts put aside in favor of completing the second priority – the $13 million in processing and scanning upgrades needed for secure REAL ID driver’s licenses.
“Literally all the expenditures we had for the agency system upgrades, for care upgrades, that’s our information system, for multi-scheduling – all of those funds went to Real ID,” Fulton said.
Assemblyman John Burzichelli, D-Gloucester, said the technology delays are frustration because the state committed money a decade ago to solve it. He said the MVC should keep more of the money it collects to address the issue – or, not collect as much money.
“Let’s get this stuff, figure out how to fix it,” Burzichelli said. “When Hewlett-Packard can’t figure it out, I don’t know who figures it out. But if we can’t spend the money for the intended purpose at the agency level, then maybe we should lower some fees.”
MVC chief administrator Sue Fulton said it’s not just about funding.
“It’s also prioritization. I mean, obviously, we’re trying to fix a car that’s running, that’s on the road,” Fulton said.
In the coming year, the MVC will collect an estimated $1.219 billion in revenues. Of that, $108 million in dedicated to the agency, with another $321 million also making up its base revenues. But $790 million is sent to other state departments – mostly the Treasury Department, at $647 million.
The MVC describes its requested expenditures for fiscal 2019, which starts in July, as $434.6 million. That number includes $77 million spent as a “state budget contribution” – down from $126 million this year and $149 million last year.
Assemblyman John DiMaio, R-Warren, said more of the MVC fees should be put toward transportation projects, so less money is borrowed.
“But if we’re not going to use it for the intended purpose, shouldn’t we visit those fees and make adjustments in the fees?” DiMaio said. “Because a fee not used for its intended purpose becomes a tax.”
State law allows the MVC to raise or lower fees without the Legislature’s involvement.
No fee changes are planned in the coming fiscal year. In the current year, the first new fee since 2009 was created: A new $25,000 annual permit “transportation network company” fee collected from ride-sharing companies Uber and Lyft.