Walz signs first bills, OKs millions for cash-sucking MNLARS

Gov. Tim Walz, House Democrats and Senate Republicans cheered as Walz signed his first bills into law Tuesday, spending millions of dollars for Minnesota’s beleaguered vehicle registration system that has already cost taxpayers $100 million.

The parties this week brokered a last-minute deal to prop up a program that’s become something of a curse word in the state Capitol: the Minnesota Licensing and Registration System, or MNLARS. The compromise includes $13.3 million of stopgap funding for components of MNLARS and, without it, state officials have said contractors working on changes to the program could’ve been laid off.

“We came to a compromise that’s in the best interest of Minnesota taxpayers and Minnesota citizens,” Walz told reporters after signing the legislation in his Capitol office.

The new funding will hardly put the MNLARS saga to rest. Tuesday, workers known as deputy registrars who have been hurt financially from the botched MNLARS rollout cried as they asked lawmakers to reimburse them for their costs.

“What I absolutely do not understand is that DVS (Driver and Vehicle Services) and MNIT (the state’s IT Services agency) keep getting emergency funds continuously for staff and MNLARS, but the deputies have gotten no help,” said Kellie Davison, who owns the Prior Lake License Bureau.

Davison tearfully told lawmakers she’s borrowed against her life insurance policy to make payroll this year. She estimated that she’s lost $1.4 million in lost revenue and productivity since April 2017, referring to it as a “MNLARS massacre.”

No funding yet for deputy registrars

Walz has requested a combined $94 million for MNLARS, the state’s driver licensing programs, and staffing needs in his two-year budget proposal. That funding will finally finish the decade-long development of MNLARS and reimburse deputy registrars for their costs, he has said.

The House had originally included $10 million in reimbursements in its version of the stopgap bill. But the deal that moved quickly through the Legislature and to the governor’s desk this week did not include that funding.

House Republicans complained Monday that the House, which had included the $10 million in its original bill, had been “rolled” during negotiations with the Senate.

Senate Republicans said they wanted to move reimbursements for deputy registrars in a separate bill that passed the Senate Transportation committee Tuesday morning. State Sen. Scott Newman, the committee chair, said the reimbursements will likely cost much more than $10 million because of how long the MNLARS problems have continued.

“We are now addressing the deputy registrars’ issues, and we fully intend to move quickly,” said Newman, R-Hutchinson.

The $13.3 million measure signed into law Tuesday is a pared-down version of Walz’s initial stopgap funding request. It includes: $5.7 million for MNLARS development, $5.5 million for the state’s driver licensing program and $2 million for temporary customer service representatives within the Department of Public Safety.

The state’s legislative auditor found in February that MNLARS had already cost Minnesota taxpayers $100 million since 2008. Two state agencies, DPS and MNIT, were to blame for the failures, the audit report indicated.

Ending a drought

Tuesday’s ceremony ended a drought early in a legislative session that has been filled with symbolic agreements but, until this week, no bills getting to the governor’s desk. 

Walz said he’d heard on the radio that this was the latest a governor has signed the session’s first bill into law since 1989. But he and legislative leaders both hailed the MNLARS legislation as an achievement on a difficult issue.

“We got it done. We got it done on time. And it’s something we can all be proud of,” Senate Majority Leader Paul Gazelka said.
Lawmakers have yet to agree to Walz’s broader MNLARS proposal for the period starting July 1, and it’s unclear if they will. The bill Walz signed Tuesday includes $100,000 for an outside review of MNLARS that Newman said would be critical as lawmakers decide whether to continue with the current system or take a different course.
Rick King, a corporate executive and chairman of a council Walz has appointed to study MNLARS, will oversee the review, the governor said. Walz and the interim commissioner of the state IT Services agency declined to name two other people involved with the review, saying they would not be paid.

The second bill Walz signed into law Tuesday authorizes $102 million in state borrowing for a series of environmental and infrastructure projects.

Agreements on other issues have proved elusive during the legislative session. The House and Senate are at odds over the authorization of $6.6 million in federal money for election security, and the measure sits in a conference committee.

Separately, Republican Senate Majority Leader Paul Gazelka and Democratic House Speaker Melissa Hortman said during a news conference that they expect legislation banning drivers from using cell phones except in hands-free mode to get done “soon.” Another bill that increases funding for opioid treatment and prevention through an increased fee on drug manufacturers will also be done before the end of the session, Gazelka said.