Cuts in governor’s budget would close DMV office in Homer

Policy analyst: DMV costs more to operate than it brings in

The Homer office of the Alaska Division of Motor Vehicles could close under Gov. Mike Dunleavy’s proposed budget. The cut is part of almost $300 million in reductions to the proposed Unrestricted General Fund in the governor’s budget released in December.

Dunleavy also proposes to close or reduce service at DMV offices in Eagle River, Tok, Delta Junction, Valdez and Haines. With the exception of Haines, all of the individual offices bring in revenue above the costs to operate.

According to budget documents prepared by the Department of Administration, the Homer DMV generated $497,921 in revenue for the state in Fiscal Year 2020. Minus salary and benefits and rent, that was a net revenue of $333,921 for Homer. Haines’ net loss in Fiscal Year 2020 was $968.

“As a total organization, it (DMV) does generate more money to the general fund than it costs to operate,” said Caroline Schultz, a policy analyst for the Office of Management and Budget.

In a press release explaining the overall cuts to the general fund, the governor’s office said the reductions will be “achieved by efficiencies, modernizations, and better delivery of government services.”

Schultz said one reason the governor’s office considered closing DMV offices is because many of the services are available online. She said she did not have a breakdown on how much online revenue comes out of the Homer area. She also didn’t have an analysis of how much walk-in business could be done online and how much has to be done in person.

“I’m asking the exact same questions you are,” Schultz said. “… Because we’re getting so many questions here, OMB wants to have that information at our fingertips.

The budget documents note that Homer customers can drive 75 miles one way to get service in Soldotna. In Tok, customers would have to drive 202 miles to Fairbanks and in Valdez they would have to drive 120 miles to Glenallen. Haines is 20 miles away by ferry from the nearest DMV office in Juneau. Delta Junction is 95 miles from Fairbanks.

Homer also is the regional hub for the Kachemak Bay and lower Cook Inlet villages of Halibut Cove, Seldovia, Port Graham and Nanwalek. People flying or taking ferries or boats to Homer from those villages might not have their own vehicles in Homer to drive to Soldotna.

If the Homer DMV office closes, one proposal is to offer services through a contract operation, said Kelly Hanke, a DMV spokesperson.

“DMV has been a hybrid model of government activity,” she said “We have partners in different locations to facilitate the needs of people.”

Called “partners,” DMV has such shops in Sterling and Soldotna. She said the partner model is one avenue DMV is looking at if regional offices are closed.

Reaction to the proposed closure has been universally in opposition, said Doug Letch, an aide to Sen. Gary Stevens (R-Kodiak). The senator for District P will work to keep the Homer DMV office open, according to Letch.

“Everyone we have heard from — and it’s been quite a few — nobody has said it’s a good idea,” Letch said of closing the office. “I think people in the south peninsula are in agreement that is something they’d like to continue.”

One issue for the idea of doing state work online is that smaller communities often don’t have reliable Internet. Not everyone can afford Internet connection, and some people don’t have good computer skills.

“It’s easy to say ‘Let’s do everything online,’ especially in this time of pandemic, but it’s not easy to do everything online,” Letch said. “… As you can imagine, in some of our smaller communities, the frustration level is going to be there.”

Letch noted that budget proposals coming from the governor often don’t advance.

“I think the important thing for people to realize is this is part of the budget process,” he said. “He (Stevens) will do his part to make sure it’s funded in the budget.”

A message was left with Republican Rep. Sarah Vance’s office seeking comment, but it was not returned by press time.

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