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Committee pauses Department of Revenue review after debate over license‑plate fee transfers and digital‑plate shortfall risk

Committee on General Government Budget · January 17, 2026
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Summary

Lawmakers debated whether fees for license plates, IDs and registration should be diverted from the State Highway Fund so the Department of Revenue has operating money. Concern about a potential shortfall from digital license plates led the committee to table further action and request additional analysis.

The committee debated how license‑plate, ID and registration fees flow through state accounts and whether changing transfers would leave the Department of Revenue short of funds for operations — especially as digital license plates increase production costs.

KLRD fiscal analyst Jacob Krespe summarized LBC actions removing enhancement packages totaling roughly $7.4 million for FY2026 (including $4 million for plate production/postage, $2.5 million for license plates and ID cards, and $920,000 requested to cover a legislative pay increase shortfall). The governor concurred with some enhancements (digital plates and postage) but did not concur with the $920,000 shortfall request.

Representative Riley and others explained that current statute credits many registration and plate fees to the State Highway Fund; the budget then specifies a transfer (a $15 million transfer shown in the bill) back to the Division of Vehicles Operating Fund to cover plate production. Committee counsel and reviser staff explained the transfers and said the committee could stop or redirect transfers via proviso or statute, but changing the pattern could cause timing or shortfall risks for production and postage.

Representative Riley proposed accepting the SBC recommendation and adding wording to stop transfers for plates/IDs for 2026; members later amended to remove the FY2026 transfer‑stop language because only one transfer remained before April 1 and the committee might miss the deadline. The committee instead requested additional analysis: KLRD will provide a comparison of SBC and governor recommendations and a breakdown of quarterly transfers and costs by Wednesday, and the Department of Revenue was asked to reach out to committee members. Representative Turk moved to table the Department of Revenue until members review that information; the motion passed by voice vote.

What’s next: KLRD will produce the requested comparison and transfer schedule; the Department of Revenue will be asked to respond to members’ questions about production, postage and the operational timeline for digital plates before the committee reconvenes.