Walz seeks $100 million more for MNLARS by 2021

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz is seeking at least $100 million more for Minnesota’s driver licensing and registration system – doubling the amount already spent on a program that has been plagued by breakdowns and delays for years.

Walz released a budget this week that includes $94 million through 2021 to finish the system known as MNLARS, operate it for two years, hire staff, and reimburse deputy registrars who took a financial hit from the botched 2017 rollout. That’s on top of $15.7 million in stopgap funding that Walz was already seeking to get the system through June 30.

To pay for some of the costs, Walz has proposed a $2 fee every time a driver makes a vehicle license, tab or title transaction.

“A stable funding source will enable effective long-range project planning, updates to the systems needed to enact legislative changes, hosting, data storage, security, and disaster recovery,” Walz’s budget proposal states.

Beyond the short-term stopgap funding, Walz’s two-year budget includes the following, according to a chart provided by governor’s office:

• $37.7 million to fully develop the MNLARS system
• $15.6 million in to pay staff and hire new workers at the Department of Vehicle Services
• $10 million to reimburse deputy registrars for their costs associated with the program’s failures
• $30.7 million to operate MNLARS over the two-year period

Now the requests go to state lawmakers.

Some Democrats see Walz’s proposals as a real strategy that will finally fix MNLARS. But some Republicans view them as a waste of money and have instead proposed major changes to one of the agencies responsible for the missteps.

“We did everything we could possibly do to help set them up for success, so why would we send good money after a bad situation?” said state Sen. Mary Kiffmeyer, R-Big Lake.

Kiffmeyer has proposed dramatically reducing the power of Minnesota IT Services, one of the agencies (along with the Department of Public Safety) that a Feb. 14 legislative auditor’s report blamed for the failures. A second bill would eliminate IT Services and shift its responsibilities elsewhere.

State IT officials have said the agency has learned lessons from the MNLARS situation.

State Rep. Rick Hansen, DFL-South St. Paul, said it was not a good idea to disrupt an active system that processes Minnesotans’ license and registration requests. Hansen is the lead author of Walz’s $15.7 million stopgap funding bill in the House.

“Even if we wanted to throw the baby out with the bathwater, what are you going to do right now?” Hansen said. “I think there’s an opportunity here now when we have a new governor, new Legislature – an opportunity to look at things with fresh eyes.”

Hansen said the stopgap funding bill providing additional short-term MNLARS funding – which passed a House committee this week – could get to the House floor next week.

He said the bill includes a system to reimburse the deputy registrars for their costs, featuring a clawback provision so the state can recover money if deputy registrars go out of business within a year of receiving the funding. It will also include a provision so registrars can’t sue the state over this issue, he said.