Missouri lawmakers blast fee offices as 'pay-to-play' scheme

Written by Muleskinner Staff

(JEFFERSON CITY, Mo., AP) — Missouri’s practice of awarding private businesses contracts to run offices that issue vehicle and driver’s licenses has come under fire by some lawmakers, who say that choosing winning bids in part by how much money a business promises to return to the state is a “pay-to-play scheme.”
During debate Thursday on the confirmation of a new Department of Revenue director, senators on both sides of the aisle criticized the agency for the bidding point system, saying they want money from nonprofit fee offices to stay in local communities through charity organizations rather than being funneled to the state.
“The bureaucrats have created a pay-for-play scheme,” Sen. Gina Walsh, a Bellefontaine Neighbors Democrat, said. Walsh is among several lawmakers crafting legislation that would ban the Department of Revenue from awarding any points for promising to return money back to the state.
Department of Revenue spokeswoman Michelle Gleba said Friday in a statement that “the current system is an objective, competitive bid process.”
Missouri works with nonprofits and other private businesses in running offices where residents can apply for vehicle and driver’s licenses. They’re often called fee offices because the operators get to charge a fee for each state transaction performed.
Fee offices returned more than $1.2 million to the state in fiscal year 2014, according to data provided to Republican Rep. Elijah Haahr of Springfield, who chairs a committee reviewing legislation against return to state.
In the past, governors awarded the fee offices to political allies. But a 2009 law required a competitive bidding system for the contracts in order to eliminate political favoritism. Under a 200-point system that the Department of Revenue helped create in response to that law, bidders can earn a maximum of 10 points for offering to give the state the highest percentage of profits from fees each year.
Lawmakers say the current practice contradicts the 2009 law, which also requires the revenue department to prioritize working with nonprofits, schools and cities. Gleba noted that such organizations receive an additional 14 points.
“Return to state completely circumvents the entire reason I wrote that bill,” Kansas City Republican Sen. Ryan Silvey said. He sponsored the law and added that his intent was to return money from fees to communities.
The 2012 audit also questions the legal ground for using return to state as a factor in awarding contracts, saying the “assessment and collection of oversight costs from contract license offices may not be fair and legal.”
“There is no statutory authority for the return-to-state provision,” according to the audit.
Since the competitive bidding law was enacted, Walsh said, local charities face losing a funding source for community services. She said money from the fees should be kept locally.
“If you want to win, there needs to be a giveback,” said Crystal Webster, executive director of the Breast Cancer Foundation of the Ozarks, during a committee hearing on a similar House bill. She said any nonprofit organization returning the fee office money to the state means less for charity services.
A fiscal note on one piece of current legislation looking to end the point system says doing so will cost Missouri about $48,000 next fiscal year and about $160,000 and nearly $700,000 in the two following fiscal years.