DMV Audit Reveals Expected Savings Nowhere to Be Found

Tom Johnson | November 27, 2012 | Energy & Environment
Getting rid of safety inspections was supposed to net administration nearly $13 million

The Christie administration is not reaping the savings it anticipated from shutting down the state’s program to inspect motor vehicles for safety flaws.

In an audit by the New Jersey Office of Legislative Services, the state Motor Vehicles Commission said the administration missed out on the opportunity to save $12.6 million annually by not including the safety component in the inspections conducted by Parsons Environmental & Inspection.

The elimination of the seven-decade old program was part of a state budget adopted in 2010 during one of the New Jersey’s recurring budget crises. At the time, the administration projected it would save the state at least $12 million by eliminating safety inspections.

The move drew mixed reactions from interest groups.

Some environmental groups worried it would exacerbate air pollution problems in New Jersey, a state that has never met the federal air quality standard for ground-level ozone, a pollutant that causes respiratory problems for the young and old

The National Motorists Association, however, applauded the move, arguing there were more costs than benefits in requiring safety inspections.

In the OLS audit, however, it said the state anticipated cutting $3.24 from the $21.60 it paid Parsons for each inspection performed by the company. In the end, the rate was only reduced by 67 cents in a deal renegotiated by the state.

While acknowledging the commission’s financial functions were in compliance with the contract terms, the audit added, “In making these determinations, we have identified potential savings in the current inspection contract.’’

The contract has long been a bone of contention among the state, Parsons, and privately run inspection stations, which charge motorists for services, unlike the state-hired contractor.

In the audit, OLS suggested the state could save $7.8 million by amending its contracts to eliminate payments for the discontinued safety inspections. The audit also indicated that the state could save $2 million by reducing the number of state-funded inspection stations.

That option in more likely to happen. According to people who are familiar with the administration’s thinking, a proposal to turn over the emission inspection of all automobiles in New Jersey may soon be forthcoming,. If adopted, that would be a boon to the more than 2,000 private inspection stations, which have invested tens of thousands of dollars in equipping their garages with state-of- the-art pollution testing devices.

Many other recommendations were suggested by the audit, such as the state monitoring its fleet more frequently to determine underutilization.

In responding to the audit, Raymond Martinez, chair and chief of the Motor Vehicles Commission, wrote “The fact that safety inspections were eliminated and therefore eliminated from the scope of the contract does not in itself translate into a reduction in the contract price for the state,’’ the agency said in its response to the state.