Amid ongoing scrutiny for customer complaints and other operational problems, the North Carolina Department of Motor Vehicle is set to increase prices by nearly 20% starting in July, in accordance with a North Carolina law that requires increases every four years based on the Consumer Price Index.

With the CPI growing significantly since 2020, the DMV is adjusting prices by 19.18% for about 90 license and registration-related fees, the agency announced this week. As inflation impacts trickle down, the DMV will increase the price of items such as learner’s permits, driver’s licenses, titles, and vehicle registration beginning July 1. Prices will rise during the DMV’s peak season when the agency plans to open 16 offices for Saturday morning walk-ins to accommodate increased demand.

“While the percentage increase is pretty significant, the increase in dollar terms for any given fee seems fairly minimal,” commented Brian Balfour, John Locke Foundation’s senior vice president of research. Fee adjustment documents outline the price changes, in which a permit will rise from $21.50 to $25.50, and private passenger vehicle registration will rise from $38.75 to $46.25.

Notably, Balfour doesn’t expect the adjustment to spark broader implications. The transportation industry, for example, has been hit much harder with the sizeable increase in gas prices, especially diesel, over the past four years.

Across the rest of state government North Carolina isn’t lacking revenue. The 2022-23 fiscal year ended $3.026 billion, or 9.9%, above the certified budget for the year. Tax revenues have grown in the last few years even as tax rates have decreased and are scheduled to drop further. In 2021, the individual income tax rate stood at 5.25%, but legislators approved reduced rates in the 2023 budget. North Carolina’s tax rate stands at 4.5% this year, and next year, that rate is set to decrease to 4.25%, followed by drop to 3.99% rate thereafter.  According to the Tax Foundation, North Carolina’s tax system ranks 10th overall in the 2023 State Business Tax Climate Index.

“Of course, much of the economic growth is fueled by massive money printing by the Federal Reserve and will prove to be temporary, and when the economy does turn negative, it will bring a fall in revenue – it’s at that point I think legislators will feel more compelled to increase fees in order to generate more revenue,” Balfour added.

Select politicians are pushing for money-saving initiatives at a national level as the nation’s debt approaches $35 trillion. US Rep. Chuck Edwards, R-11, recently highlighted Biden’s proposed 2025 budget, which would grow the gross debt by 25% more than the economy. He wrote, “If we don’t prioritize fiscal responsibility in America, we will bankrupt our country.”

Meanwhile, state legislators are working closely with DMV officials to address the ‘broken’ operations at the DMV that have caused major frustrations for North Carolina customers. Complaints date back years, including a lack of available appointments at DMV offices, long wait times, or being forced to return on a different day altogether. 

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