[caption id="attachment_161590" align="alignright" width="400"]Beginning Jan. 1 Texans will see an increase in the amount they pay to renew their vehicle registration. Beginning Jan. 1 Texans will see an increase in the amount they pay to renew their vehicle registration.[/caption] Texas drivers will see their vehicle registration renewal fees increase beginning Jan. 1 as the Texas Department of Motor Vehicles board approved an additional $4.75 processing and handling fee June 27. Board members said the new fee will bring about increased transparency for taxpayers by displaying the true cost the government bears in providing registration services to the public, while allowing the entirety of the vehicle registration fee to be credited to the State Highway Fund. A Texan who registers in person at the county tax office—about 64 percent of car owners—will now see their state payment increase from $51.75 to $55.50. Those who register online—about 18 percent of Texans—will see it drop from $54.75 to $54.50. Those who mail in their registration will see their payment increase from $52.75 to $55. Texans also pay additional fees on top of that for county roads and bridges when they register.

TxDMV had initially wanted a $5 processing and handling fee to cover its budget gap—estimated at $70 million in the biennium that starts in 2018. But the DMV found a few million dollars more in its budget, which Gov. Greg Abbott's office strongly encouraged be used to lower the fee. In a package update the TxDMV board said, "The TxDMV’s staff recommendation to lower the processing and handling fee to $4.75 aligns with Gov. Greg Abbott’s commitment to the fiscal responsibilities of state government. Additionally, the recommendation will minimize the financial impact of the fee on Texas drivers to the greatest extent possible, driving greater efficiency in registration services and providing sufficient funding for the department and counties to cover the costs associated with collecting registration." Since the rule was proposed on April 7, the agency received comments from tax assessor collectors, public officials, legislators, businesses, associations and individuals. Most of the comments opposed the setting of the processing and handling fee as it will reduce the amount of revenue the counties will receive from registration renewals.
Dallas County is expected to lose $700,000, Tarrant County $400,000 and Denton County $300,000 as a result of the new fee structure. TxDMV’s proposal states the processing and handling fee would allow $50.75 of the fee to be dedicated to the State Highway Fund, which would result in an additional $47 million or more annually to the fund.