Plate on Motor Vehicles

Background

State law requires passenger and commercial motor vehicles operating on public highways to display two license plates: one plate at the front of the vehicle and one at the rear. During fiscal year 1990, there were approximately 11.9 million passenger vehicles and 2.1 million commercial vehicles registered in Texas. Revenue to the state in fiscal year 1990 from vehicle registrations totaled more than $614 million. The cost of registering a car depends on the age of the vehicle, and ranges from $40.50 for cars more than six years old to $58.50 for cars less than three years old.

More than 5.6 million metal license plates were produced in fiscal year 1990. There is no separate fee charged for the sale of license plates except for replacement plates within five years of issuance, and for specialized license plates such as collegiate plates or personalized plates, which carry a special increased fee.

The State Department of Highways and Public Transportation (SDHPT) spent more than $5.7 million in fiscal year 1990 for the production of metal license plates, which represents a cost of $1.09 per plate. The plates are manufactured by prisoners in the Texas Department of Criminal Justice through a contract with SDHPT.

Single-Plate States. According to data compiled by the department's Division of Motor Vehicles, 20 states require only one license plate.[1 Four of the 20 states have converted to a one-plate system since 1980 as a cost- saving measure.2 In addition, all of the states bordering Texas require only one license plate, with several major states, including Florida, Massachusetts, Michigan and Pennsylvania requiring only one plate.

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Less Expensive Reflective Materials Available. Significant cost savings have been obtained by other states through use of a less expensive license plate reflectorization process. This process involves coating the numbers and letters on the plate with reflectorized beads. Seven states, including Connecticut, Michigan, Missouri, Colorado, Arizona, Iowa and Pennsylvania, have switched to the lower cost reflective license plate material.[3 Interviews with personnel from some of these other states indicated that this type of plate is just as durable and safe as plates using more expensive materials. Some states manufacture regular plates using the less expensive beads and ink process, while using the more expensive reflective sheeting on specialty plates such as university plates, which sell for a higher price. The reflective material used in Connecticut costs 10 cents per plate compared to about 53 cents for the reflective sheeting product currently used in Texas.4

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Recommended Policy

State law should be amended to require that only one license plate be displayed on a motor vehicle, at the rear of the vehicle. The State Department of Highways and Public Transportation should change its current license plate specifications to allow for the use of reflective materials which are less expensive.

Implications

The primary advantage of changing to a single license plate is clearly to reduce costs. However, there are several possible disadvantages to this change. An official from the Texas Department of Public Safety's Traffic Enforcement Division indicated that the Department of Public Safety would likely oppose conversion to one plate. Reasons cited included the fact that the front plate is the only thing that usually is reflectorized on the front of a vehicle, and that witnesses and crime victims may only get a look at the front of a vehicle. However, these issues have not deterred 20 other states from operating successful one-plate registration programs.

The Border Operations Division of the U.S. Customs office indicated that they require a computer license plate check on all vehicles that cross the border into the United States. Currently, border agents perform these checks by reading the front license plate. Additional time would be required to check a rear plate. Although both Arizona and New Mexico are one-plate states, their border traffic volume is lower than either Texas or California. The U.S. Customs office is testing an automated rear license plate reader which may be in operation in two to three years.

The Dallas/Fort Worth Airport has a new $10 million computerized parking system that is set up so that parking attendants can read and type the front license plate numbers of approaching vehicles into a computer. Airport officials indicated that the loss of the front plate would impede their operations and call for some adjustments to their system.

Fiscal Implications

The state will save approximately $3 million per year, or almost $15 million over the next five years, by eliminating the requirement for a front license plate. Furthermore, the state could save $1 million per year by changing the license plate design specifications to allow a less expensive reflective coating material. The savings from this recommendation will accrue to the State Highway Fund.

Fiscal Savings to the Change in

Year State Highway Fund FTEs

1992 $3,981,000 0

1993 4,030,000 0

1994 4,078,000 0

1995 4,129,000 0

1996 4,168,000 0

The recommended policy would have a positive effect on cash flow. Similar annual savings would continue as long as the provisions of the bill are in effect. The fiscal implication to units of local government cannot be accurately estimated, although postal savings would result to counties from having to mail only one license plate, rather than two.

Endnotes