Alaska senators skeptical over Dunleavy administration’s plan to privatize rural DMVs

A white woman in a blue blouse speaks in front of a podium in front of several other men
Department of Administration Commissioner Kelly Tshibaka answers questions on Wednesday, December 11, 2019, at the Capitol in Juneau, Alaska. Tshibaka’s plan would eliminate DMV offices in smaller communities around the state. (Rashah McChesney/KTOO)

The state-run Division of Motor Vehicle offices in Haines, Homer, Valdez, Tok, Delta Junction and Eagle River would be eliminated under a plan presented Thursday by Department of Administration Commissioner Kelly Tshibaka.

We’re all in this really challenging time of having to span a $2 billion budget gap,” Tshibaka told members of the Senate Transportation Committee. “And so this is a creative proposal from our department to try to do that without significantly changing services to Alaskans.”

The agency pledged to avoid layoffs, and Tshibaka said the state would still collect its normal fees but allow a private vendor to charge extra.

“They offer the DMV services but they offer a service charge on top of them,” she said. “That’s how they stay in business as a private business.”

A table showing didffereent percentages for different locations
Screenshot from presentation given to Senate Transportation committee on March 4, 2021 (Department of Legislative Affairs)

But members of the Senate Transportation Committee had a lot of questions on how that would work in practice — even those who campaigned on cutting the state budget.

Fairbanks Republican Sen. Robert Myers — the committee’s chair — said that under the current law, professional truck drivers like him wouldn’t be able to use the private contractors.

“I have a [commercial driver’s license] and I can’t renew that online, nor can I renew it through one of the private companies such as UMV.” Myers said. “So it’s a little bit more concerning for me, personally. I know I’m not the only one.”

Tshibaka suggested the Legislature could change the law and allow more services to be offered online.

And while closing DMVs might save the state some overhead, Alaskans in those specific communities could end up paying more.

According to examples provided to the committee, the $20 cost of renewing a driver’s license would increase to $45. The $40 cost for a REAL ID-compliant license would double to $80. A vendor would charge $10 for a practice test that’s freely given at a state-run DMV.

Sen. Mike Shower, R-Wasilla, said he’s in favor of private partnerships that reduce state bureaucracy. But he said he’s concerned about higher costs for Alaskans.

That is some fairly significant cost increases over what they pay for a state-run service,” Shower said.

Sen. Jesse Kiehl, D-Juneau, said he doesn’t follow the logic of rolling out public-private partnerships in relatively small communities.

“Help me understand the reasoning that we’ve gone to six in the middle, instead of the biggest cities if this is really no great inconvenience to regular Alaskans,” Kiehl said.

The commissioner replied that this modestly scaled plan had received push back which would likely be more intense if larger cities were involved.

This has been a pretty controversial proposal just in the magnitude that it is,” she said. “If you’d like us to come back and consider something larger, we’d be happy to introduce that too.”

Legislators say they’ve heard from constituents concerned that closures in their community would force them to drive more than a hundred miles to the nearest DMV. But residents of Haines won’t have that option. The closest DMV is in Juneau, which is only accessible by plane or ferry.