The governor proposed cutting six DMV offices out of the state budget this year, including the office in Homer, a two-person operation on Lake Street.
It’s one of the easier-to-reach communities with a DMV on the list. Also at stake is the DMV in Haines, a ferry ride away from the nearest office in Juneau.
Residents say they’re not thrilled about the cuts. But the state has been eyeing another idea: instead of closing up shop completely, shift some DMV services to private businesses.
They’re already in talks with two Homer businesses about the idea.
“Typically, it would be a local municipality, maybe the town or a business within the town, or an entity that wants to come in and set up shop just to run DMV services in that location," said DMV Director Jeffrey Schmitz.
It’s part of Gov. Mike Dunleavy’s effort to shrink state spending.
Alaska DMVs bring in money. According to a DMV budget summary, the Homer office brought in $497,921 in FY2020.
But the state thinks outsourcing those front-end costs would keep the revenue flowing while curbing its personnel and lease costs. The state estimates it would save $164,000 by closing the Homer office.
Here’s how these partnerships would work: Many DMV services are available online. But for tasks that must be performed in person, customers would be directed to the state’s third-party partners.
Companies could mark up their services to make a profit. The DMV would provide support, like training.
There are already companies that do that in Soldotna. AK Express is authorized to help with registration, plates and vehicle titles. Several businesses have similar contracts in Anchorage, Fairbanks, Wasilla and Juneau.
Duane Bannock, of Kenai, was the state DMV director between 2003 and 2007, when Soldotna moved to that system. He said the goal was to cut down wait time.
“That put less people in a state-owned and operated DMV office, thus your wait time would be less, while at the same time getting the same amount of work done," he said.
Soldotna still has a state-run DMV, though. The proposed partnerships in Homer would eventually take the place of the DMV itself.
“The goal is to have those relationships in place before we transition the DMV out," said Department of Administration Commissioner Kelly Tshibaka. "So we would have a baton pass, which is what we’re planning to do.”
Schmitz wouldn’t yet say which Homer businesses the state is considering. He said they’ll look at partnerships with Alaska-based businesses.
Not everyone likes this idea. Peter Zuyus is the executive director of Seniors of Alaska.
“The impact is more severe on seniors and disabled than it is on others," he said.
He doesn’t want the DMVs to close completely. But he worries about the disproportionate impact of privatization, too.
Alaska requires seniors 69 and older to renew their licenses in person at the DMV. The same goes for disabled Alaskans.
That means they’ll either have to use the contracted businesses in Homer or go up to the DMV in Soldotna.
“Seniors will pay more and the disabled will pay more for services because private bureaus add to the state’s fee," he said.
Bannock said these partnerships will add costs for consumers.
“The short answer is, yes, it likely will," he said. "I pay for convenience everyday. You pay for convenience everyday.”
The proposed DMV cuts are still proposals, subject to change before the Legislature approves Dunleavy’s budget.
One legislator who will be watching the budget approval process closely is Kodiak Republican Sen. Gary Stevens. His district includes Homer.
Stevens is against closing the Homer DMV. Chief of Staff Doug Letch said the senator will listen to the details of a public-private partnership but he “can’t support any plans on the Homer DMV office that reduces the constituents’ ability to get service.”
It’s not the Homer DMV’s first time on the cutting list. It also hung in the balance when Bannock was director.
“I actually traveled to Homer, Alaska and let them know that their office would be closing," he said.
At that time, the state decided not to eliminate offices. Instead, it consolidated staff and office space between state departments.
