S1492 FISCAL NOTE



FISCAL NOTE

SENATE, No. 1492

STATE OF NEW JERSEY

212th LEGISLATURE

DATED: MAY 31, 2006

SUMMARY

|Synopsis: |Increases handicapped parking education and fines for unlawfully parking in handicapped space; requires |

| |Division of Motor Vehicle to issue stickers for handicapped placards and license plates when renewed |

| |every three years. |

|Type of Impact: |Ongoing expenditure increase, with indeterminate revenue offset. |

|Agencies Affected: |Motor Vehicle Commission, Administrative Office of the Courts, municipalities. |

|Executive Estimate |

|Fiscal Impact |Year 1 |Year 2 |Year 3 |

|State Cost |$2.2 million |$400,000 per year thereafter |

|State Revenue |Indeterminate - Probably Minimal |

|Local Cost |Indeterminate - See Comments Below |

| |

• The Office of Legislative Services generally concurs with the Executive estimate. Significant communications and information infrastructure costs will be incurred to implement and publicize the change.

• Revenue from the proposed $5 surcharge cannot be estimated by the Administrative Office of the Courts, as the violations are currently adjudicated by local governments. The revenue would depend on local enforcement and is probably minimal. The proposed fund might not be able to cover the costs of its intended purpose for some years.

• Municipalities are responsible for handicap ordinance signage and enforcement. They would incur some cost to alter signs and enforcement systems to incorporate the proposed surcharge, but would not receive additional revenue.

BILL DESCRIPTION

Senate Bill No. 1492 of 2006 proposes several changes to the State's handicapped parking laws. First, the bill requires information about handicapped parking laws to be included in the driver's manual, and for a question about those laws to be included on the driver's test. Second, the bill increases penalties for parking in a handicapped parking space unlawfully. Third, the bill establishes the "Handicapped Parking Education Fund" to be administered by the Motor Vehicle Commission (MVC) and used for educational programs about handicapped parking laws. Fourth, the bill requires that $5 of each fine collected for handicapped parking violations go to the "Handicapped Parking Education Fund." Fifth, the bill requires that handicapped placards be renewed every three years and that, upon renewal, the MVC would issue a color-coded sticker to the handicapped person or the person renewing the placard on the handicapped person's behalf to be affixed to the placard to signify its continued validity. Sixth, the bill requires that handicapped license plates also be renewed every three years and that, upon renewal, a color-coded sticker be issued to be affixed to the plate to signify its continued validity.

FISCAL ANALYSIS

EXECUTIVE BRANCH

The MVC and the Executive branch provided the following information regarding the expected fiscal impact of the bill:

Revenue:

Violations of handicapped parking laws are municipal violations, and therefore an estimate of the revenues generated could not be determined by the Administrative Office of the Courts, as the number of violations will depend upon law enforcement’s issuance of a ticket and collection by municipalities. Each handicapped placard holder has a Disabled Person Identification Card to match the placard number. This person must either be driving or be a passenger in the vehicle in order to use a handicapped parking space. Local law enforcement can request to see this information; however the resources of the municipality may not be able to accomplish this type of policing. It should be noted that MVC recently discontinued the use of a plate sticker on passenger vehicles because of the 4-year registration that would have required a multitude of expiration stickers with very little benefit to law enforcement.

Driver Testing

The change required of the written driver’s test is not possible with information infrastructure currently being implemented. The Automated Driver’s License Test (ADLT) computer system is approximately 8 years old. The typical life expectancy of any computer system is 3-5 years. Between September and December 2004 the written driver’s test was expanded from 30 to 50 questions. The changes made at that time required hard drive upgrades, many MVC manpower hours, translation of all nine non-English versions, and also included contracting with an outside computer vendor. In addition, during this same time frame, all nine non-English versions of the test were included in the data base in an audio format. The increase of questions and the inclusion of the audio versions caused the ADLT computer system to reach its maximum capacity. In December 2004, $1,621,050 was estimated for a new ADLT computer system. Any changes to the ADLT system will require a completely new system. Assuming a 3 percent rate of inflation for such costs, the cost of a new system is approximately $1,719,772.

Communications

In addition to updating the driver’s manual in both English and Spanish, Communications would be required to advertise and inform the public regarding the “Handicapped Parking Education Fund."

Including handicapped parking laws in the driver’s manual would require re-printing of both the English and Spanish versions. These manuals are updated on an annual basis at an approximate cost of $400,000. This fiscal analysis assumes that the sponsor’s intent is not to require a re-print of the driver’s manuals specifically to add the handicapped parking laws and will not include an estimate of this cost.

Educating the public on handicapped parking laws could be accomplished in the following ways: creating mail inserts and posters, updating the MVC web site, conducting news conferences and writing public service announcements. Printing 100 posters (2 posters for each of the 45 Motor Vehicle Agencies) is estimated at $800 based on the cost of a recent poster purchase. Approximately 13 million inserts would be needed for inclusion in driver’s license and registration renewals sent by mail. A recent state contract of one-sided flyers was $6.25 per thousand. Therefore, 13 million inserts would cost approximately $81,250.

Administration - Forms Control

The handicap placard will need to be redesigned to include a designated area for the stickers required by this legislation. All currently issued placards (approximately 400,000) will need to be replaced. These placards can be replaced during the renewal period of the accompanying handicap identification card (3 years). Expiration stickers would need to be purchased for the 400,000 replacement placards, the 40,000 annual issuances of placards, and the 52,000 currently issued handicap license plates.

Administration - Mail Room

Changing the handicap placard will involve handicapped motorist outreach via the mail to inform them of the change. In order to maintain the integrity of the program, motorists who have the old placards will need to return them to MVC. This could most easily be handled by providing them with a postage-paid return envelope at the time MVC informs them of the program change. Currently, the cost to mail handicap placards is $0.63.

Placard renewals (after replacement) will need to be sorted separately in the mailroom for special handing to include the expiration stickers. The Office of Information Technology will need to provide a computer program to extrapolate these renewals. Adding the decals would increase production time. Presently, it takes an average of 1 hour per day to laminate and insert the documents, for 247 working days per year. The operator cost for the current production time is $3,537 per year. Including decals slows the process and doubles the amount of time it will take to process these renewals. The operator cost for the projected production time is $7,074 per year.

Information Technology

Should this legislation require a 3-year license plate expiration for handicapped plate holders, this would impact the following systems: agency computer system, comprehensive computer system, remittance processing system, Access DMV (online registration renewal system through MVC website), and General Systems Solutions and Computerized Vehicle Registration computer systems, which are private companies authorized to issue titles and registrations for dealerships, leasing companies, and rental companies. The Office of Information Technology programming costs would require a project manager working 140 hours at $95.33 per hour and a senior programmer working 420 hours at $89.10 per hour. This equates to $50,768 for the above changes.

The bill has an effective date of four months after passing. Such major programming will take considerably more than four months. MVC estimates a minimum of twelve to eighteen months to implement these changes to the computer system.

Operations Support - Special Plates

Currently, there are four Record Technician 3s (RT3) in the Special Plate Unit that issue handicap placards, among other duties they perform. An average of 10,000 placards are issued annually per employee. The estimated time to complete a replacement placard transaction is 2 minutes. If one RT3 can issue 30 placards per hour, it would require 4,444 overtime hours per year at a cost of $125,410. If three full-time employees were hired, rather than using existing employees with overtime hours, the annual salary for the three new employees would be $102,729. Including the fringe benefits of $33,643, the total cost for year one would be $136,372. It is more cost effective to use existing employees until the project is complete.

Expenses:

Driver Testing:

ADLT Computer System (new): $1,719,772

Communications:

Creating mail insert:

Government Rep. 1 10 hours @ $24.38/hour $ 244

Public Information Officer 20 hours @ $27.17/hour $ 543

Creating posters for Motor Vehicle Agencies:

Government Rep. 1 20 hours @ $24.38/hour $ 488

Public Information Officer 10 hours @ $27.17/hour $ 272

Updating website:

Technical Support Specialist 1 10 hours @ $30.25/hour $ 303

Conducting news conference:

Public Information Officer 10 hours @ $27.17/hour $ 272

Creating public service announcements:

Public Information Officer 10 hours @ $27.17/hour $ 272

Total salaries $ 2,394

Fringe (32.75 percent) $ 784

Materials and supplies (6 percent of salaries and fringe) $ 191

Printing costs:

Posters (100) $ 800

Mail inserts (13,000,000-$6.25 per thousand) $ 81,250

Total printing costs $ 82,050

Total Communications costs: $ 85,419

Forms Control:

New placards (400,000 @ $23,800 per 100,000 / 3 years) $ 31,733

Expiration stickers for replacement placards

(400,000 @ $7,500 per 100,000 / 3 years) $ 10,000

Expiration stickers for new placards (40,000 annually x $0.075) $ 3,000

Expiration stickers for plates (52,000 @ $7,500 per 100,000) $ 3,900

Total Forms Control costs: $ 48,633

Mail Room:

Postage (400,000 placards @ $0.63 each x 2 / 3 yrs) $ 168,000

Increase in production time (1 hour per day) $ 3,537

Total Mail Room costs: $ 171,537

Information Technology:

System changes for 3 year renewal cycle: $ 50,768

Total Information Technology costs: $ 50,768

Operations Support:

4,444 overtime hours @ $28.22 per hour $ 125,410

Overtime Fringe Rate (7.65 percent) $ 9,594

Total salaries and fringe $ 135,004

Materials and supplies (6 percent of salaries and fringe) $ 8,100

Total Operation Support costs: $ 143,104

Financial Management:

Administrative Analyst 1 24 hours @ $38.12/hour $ 915

Administrative Analyst 2 48 hours @ $34.74/hour $ 1,668

Total salaries $ 2,583

Fringe (32.75 percent) $ 846

Materials and supplies (6 percent of salaries and fringe) $ 206

Total Financial Management costs: $ 3,635

TOTAL COSTS FOR YEAR 1 $2,222,868

Municipalities are responsible for updating and purchasing the signage for handicapped parking spaces. Municipalities would incur expense to update signage to reflect the proposed change, but would not receive additional revenue from enforcement.

The Executive analysis notes that the provision of the bill moving applicants for handicapped license plate renewals to a 3-year registration cycle would entail renewal fees that could exceed $300 on code 15 vehicles (pick-ups, vans).

OFFICE OF LEGISLATIVE SERVICES

The Office of Legislative Services generally concurs with the Executive estimate. The costs noted for a new computer system are possibly too conservative: If a new ADLT system is currently under review for implementation, marginal adjustments may be possible without necessarily abandoning the entirety of the new system. If the proposed new computer system is indeed this inflexible, we would anticipate future problems with the system. Most modern platforms include built-in expandability to account for future needs of the user. Additionally, the MVC notes that most computer systems become obsolete in time (they estimated 3-5 years). Therefore, attributing the entire cost of a new system to this proposal, when an update is inevitable, is inconsistent with conventional cost analysis.

|Section: |Authorities, Utilities, Transportation and Communications |

|Analyst: |Mark Trease |

| |Associate Fiscal Analyst |

|Approved: |David J. Rosen |

| |Legislative Budget and Finance Officer |

This fiscal note has been prepared pursuant to P.L.1980, c.67.

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