The Reflecting Pool
In This Article
- Real ID Act Postponed? Not Really
- Real ID Costs Exaggerated?
- Streamlined Sales Tax Agreement Shows Results
- Maine Congressman Organizes Trade Briefing
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An eye on the state-federal relationship.
By Carl Tubbesing
March 7, 2007
Real ID Act Postponed? Not Really.
The media gave a lot of coverage to the March 1 release by the Department of Homeland Security of regulations to implement the Real ID Act. If you just read the headlines, you probably thought NCSL had scored a pretty big victory. “Real ID Act Postponed Two Years,” said the Los Angeles Times. “States Can Delay Implementing Real ID,” summarized the Salt Lake Tribune. If you’ve been reading all the information alerts we’ve been sending out on this inflammatory issue, you know that delaying the compliance date was one of the most important recommendations offered by NCSL and the National Governors Association. So why weren’t fist taps the order of the day in the Hall of the States, the Washington home of NCSL and NGA? Reading further along in at least some of the press stories provides the answer. The Salt Lake article put it this way. “But Utah officials, like their counterparts across the nation, are still concerned about the cost of the change and the timetable. All driver's licenses and identification cards must be reissued to meet stringent standards by 2013, a date that has not changed.”
There’s the rub. The Department of Homeland Security moved one critical deadline, but not another. The proposed regulations say states can apply for permission to delay complying with the law until the end of 2009—a 19-month reprieve of sorts. But the regulations don’t move the deadline for requiring all drivers to have a Real ID driver's license. That still would have to be done by May 11, 2013. A state that chooses to delay the start of its Real ID program will have only three years to issue Real ID licenses to all current drivers and all new applicants.
The department ignored a critical recommendation made by NCSL and NGA to give states 10 years to issue Real ID licenses to current drivers. That wouldn’t have alleviated the costs, but it would have spread them out over a longer period—and would have reduced the lines and inconveniences at states' Departments of Motor Vehicles. NCSL and NGA also recommended that certain drivers—for example, those with U.S. military IDs—be exempt from the Real ID requirements. That would reduce the number of drivers who will have to be processed by 2013. The department ignored that one, too.
One way of looking at the proposed rules is that they aren’t as bad as they might have been. The department adopted many of the recommendations that NCSL and NGA made last year. But it ignored the two major ones that would alleviate the financial burden on states. That’s apparently because the federal officials don’t see why states don’t just add the extra $25 or $50 or $100 to the cost of a driver’s license. That’s a signal to us that we’ve got to step up our efforts to work with sympathetic members of Congress to make sure that Real ID doesn’t secure a place in the Unfunded Mandate Hall of Shame.
More detailed analyses of the new Real ID regulations.
Real ID Costs Exaggerated?
Two weeks ago, The Reflecting Pool reported on Homeland Security Secretary Michael Chertoff’s testimony to defend his budget request for the 2008 fiscal year. Responding to a question from Maine Senator Susan Collins, the secretary said the cost estimates for implementing Real ID are “exaggerated.” Presumably, he was referring to the $11 billion estimate that NCSL, NGA and the American Association of Motor Vehicle Administrators made from their comprehensive survey last fall. When the homeland security department released the regulations last week, officials there said the costs to states could run as high as $14 billion and the total costs would be over $23 billion. The Reflecting Pool’s math is a little rusty, but we’re pretty sure that $14 billion is larger than the “exaggerated” $11 billion. Hmmmm.
Streamlined Sales Tax Agreement Shows Results
Twenty-one states and more than 1,000 retailers are participating in a voluntary agreement to collect sales taxes on Internet and other out-of-state sales. Getting to this point wasn’t easy. It means that 21 state legislatures have simplified their sales tax systems to meet the standards established by the inter-state agreement. It means that 21 state legislatures had to agree to common definitions of candy, food, clothing and a lot of other things too arcane to mention here. It means that a thousand retailers have determined that these 21 sales tax systems have removed the burdens that used to keep them from collecting sales taxes when you bought a dress or a pair of shoes over the Internet.
There are signs that the agreement, which became operational 15 months ago, is beginning to do what it set out to accomplish. A survey conducted by the governing board of the streamline project shows that the agreement produced at least $60 million in sales tax revenue between Oct. 1, 2005, and the end of 2006. Michigan, Nebraska, Kansas and North Carolina appear to have been particularly successful. Although the results so far are modest, they are an extremely important demonstration to other sales tax states and to Congress that the streamlined sales tax agreement is working.
The next big hurdle in this effort is to persuade Congress to approve legislation that would convert the system from a voluntary one to one legally sanctioned by the federal government. NCSL has been working with a broad public-private coalition and members of Congress to shape that legislation and move it to passage by the end of the year. That won’t be easy, but neither was getting 21 states to simplify their sales tax systems on a voluntary basis.
Maine Congressman Organizes Trade Briefing
Conducting a briefing for Hill staffers is frequently an effective way to highlight an issue and lay the groundwork for future congressional activity. Maine Congressman Mike Michaud, who was quite active with NCSL during his years as president of his state’s Senate, sponsored one last week on the impact of international trade agreements on state authority. Jeremy Meadows, NCSL’s expert on these issues, participated. The topic is important because many state legislators and legislative staff think that the federal government—namely, the office of the U.S. trade representative—is not very careful about respecting state prerogatives when it goes about negotiating trade agreements. NCSL’s Labor and Economic Development Committee has jurisdiction for us. We also conduct a trade policy seminar each fall as part of NCSL’s Fall Forum. It’s good to know that Congressman Michaud and other members of Congress are paying attention, too.
Carl Tubbesing is the deputy executive director of NCSL.