It’s not just government that benefits from your taxes and fees.
Private businesses can prosper, too.
And in Broward County, a battle is raging over who will make the most money from fees that most of us pay each year to register our cars and trucks.
At stake is a tiny slice of the 2.5 million vehicle transactions that Broward handles each year. By charging an additional $3 to $8 for the convenience of shorter lines and quicker service, private auto tag businesses could earn $150,000 a year in profit – and possibly much more.
Because the county has opened the door to privatization, competing auto tag businesses have lined up heavyweight lobbyists and are trading accusations that competitors are using dirty tactics to try to establish a monopoly.
“The private sector wouldn’t be involved in it if there wasn’t money to be made,” said Kurt Wenner, a senior analyst with Tallahassee-based Florida TaxWatch.
In the crossfire is the Broward County Commission, which on Tuesday will consider rules that could determine the success or failure of the enterprises.
And hanging in the balance is whether car owners will have to spend half their day getting license plates and decals.
On one side is First Broward Auto Tag, whose three owners operate similar private tag agencies in Dade County.
With the help of a noteworthy team of advisers – including former U.S. Rep. Larry Smith, lobbyist Dave Ericks and union president Walter Browne – First Broward won the right earlier this year to operate Broward’s first private auto tag agency.
The company is renovating a store at 900 N. Federal Highway, near the Sunrise Boulevard bend in Fort Lauderdale, with an expected July opening.
Everything was going fine until First Broward learned that the county was about to allow a competing company – Computerized Vehicle Registration of La Palma, Calif. – to install computers in Broward’s auto dealerships.
The computers would allow dealers to issue license plates to newand used-car buyers, rather than making customers return to replace a temporary tag with a permanent one. The company would get $8 for each transaction.
Ken Strochak, a co-owner of First Broward, fears his business will founder once the competing business goes into operation.
“We have to do dealers’ [business) to survive,” Strochak said. “You just can’t survive from the walk-ins.”
So Strochak’s lobbyists have been working with County Commissioner Lori Parrish and other officials to make it more expensive for the computer company to do business. Parrish is asking that a county employee be stationed in each dealership to oversee transactions – at the dealer’s expense. She also wants to ban dealers from handling routine renewals.
Parrish said that in Jacksonville, which uses the computer system to issue license plates, dealerships kept customers’ money for up to a month before applying for titles.
“I want the money,” Parrish said. “They’ve been holding it and using it for 30 days.”
If Parrish’s conditions become law, computerized registrations at dealerships will not happen in Broward, said Ron Book, the lobbyist representing Computerized Vehicle Registration.
And Broward taxpayers would ultimately lose, Book said, because the county would bleed automobile sales taxes to neighboring counties that use the computers. Sales taxes are paid in the county where the vehicle is registered.
“Whatever counties are doing it, they are going to be the beneficiaries,” Book said.
Broward already loses money – about $3.75 million in sales taxes and $261,000 on renewals in 1995 – from cars registered in Dade, which has 21 private tag agencies with shorter lines.
First Broward’s critics say Strochak and his partners are trying to establish a monopoly.
“He doesn’t want competition,” said Richard Baker, executive vice president of the South Florida Automobile and Truck Dealers Association. “The bottom line is [the computer system) is good for a dealer. The customer is much happier when they can walk away with a license plate on the car.”
Strochak said he is not the one squelching competition – Computerized Vehicle Registration is. He said the computer company entered a questionable deal with a for-profit subsidiary of a statewide association of tax collectors, which will make money from each dealer that installs a computer.
“It was a three-year deal that nobody knew about. It was undisclosed,” Strochak said.
Hogwash, says Ken Van Assenderp, attorney for Florida Tax Collectors Inc. The association sought competitive proposals to introduce a standard electronic filing system statewide, and the system has the blessing of the governor, the attorney general and the Legislature, he said.
Should taxpayers be concerned that companies with powerful allies are fighting doggedly to profit from a tax?
Not necessarily, said Wenner of TaxWatch.
Taxpayers would have to pay no matter how Broward expanded its tag operations, Wenner said. If private companies were not charging fees, the county would have to spend other tax dollars on office space, salaries and equipment, he said.
“But I would want to find out what the county is [getting), if there is savings or increased service.”
Joe Rosenhagen, Broward’s tax collector, said customers will see better service through shorter lines at the four county-run tag agencies.
