Democrats Attack Potential Privatization of Motor Vehicle Inspections

But Motor Vehicles chief says new contract pushes off privatization option for three years

Stung by their inability to block the privatization of the State Lottery, Democratic members of the Assembly Budget Committee yesterday assailed the Christie administration for considering privatization of motor vehicle inspections.

Raymond P. Martinez, chief administrator of the New Jersey Motor Vehicle Commission, acknowledged that privatization was one of the options explored by Eastern Research Group, Inc. (ERG), a Lexington, Mass.-based consultant hired in 2011 to advise the MVC on best practices and assist in negotiations over a contract extension with Parsons Corp. Since 1998, Parsons has operated New Jersey’s hybrid system of centralized MVC inspection lanes and private garages that inspect 2.3 million vehicles a year.

“Our goal was always to get a contract extension with Parsons at a price that would save the state money, and we did,” Martinez said, asserting that the new three-year contract approved Sunday would cut inspection costs at the state’s six centralized facilities from $20.93 per car to $20.29 and save the state at least $1.2 million per year.

Martinez insisted that negotiating a new deal with Parsons was always his intention, rather than shifting motor vehicle inspections to private garages that would charge customers for the service.

However, Democratic legislators were not convinced that Martinez and the Christie administration do not have plans on the board already to privatize inspections three years from now when the Parsons contract expires and can’t be renewed without a new bidding process.

“The fact that I couldn’t get direct answers to my questions about privatizing vehicle inspections gives me pause, and makes me worry about what will happen three years from now,” said Assemblywoman Bonnie Watson-Coleman (D-Mercer). “The administration dodging questions this early does not bode well for the future of our inspections.”

Watson-Coleman said she agreed with Martinez that the state’s current motor vehicle inspection system, managed by Parsons, is well-run and has sharply reduced waiting times for motorists.

“We have a solid inspection system in New Jersey that drivers depend and rely on,” she said. “Why is the administration even considering privatization? It’s almost like the state lottery. Why fix it when it’s not broken?”

Assembly Budget Committee Chairman Vincent Prieto (D-Hudson) insisted that “Gov. Christie needs to take this inconvenient and costly possibility off the table now.”

Assemblyman Gordon Johnson (D-Bergen) and Watson-Coleman both expressed concern that requiring inspections in private garages, as Pennsylvania and New York currently do, would pose an economic hardship for lower-income New Jerseyans, whose used cars are required to undergo inspections every two years, while new cars are now exempted for five years.

“Ultimately, who would privatization benefit?” Johnson asked. “Certainly not working families who are already struggling to get by and would now have to pay to take their car to a private garage for inspections. In the end, this is a road best left untraveled.”

Martinez said there is a cost to a state-run system such as the one operated by New Jersey, which draws 83 percent of motorists to state MVC inspection systems.

“The public thinks it’s free, but there’s a cost,” Martinez said, pointing to the $20.29 per inspection that state taxpayers will be underwriting over the next three years.

He noted that New Jersey saved $31 million by eliminating the requirement for comprehensive mechanical inspections two years ago. State auto inspections now consist of emissions inspections to comply with federal Environmental Protection Agency clean air requirements and a quick visual inspection that catches broken windshields or turn signals. Only commercial vehicles are now inspected for brakes at the state MVC stations.

Shrugging off Democratic questions about internal MVC privatization discussions, Martinez reiterated that his priority was always to keep Parsons on the contract “because our customers are very happy.”

“We wanted to make sure we saved money on the contract, and we wanted Parsons to set up a new vehicle inspection system to replace the one that Verizon was running for us because Verizon was getting out of the business,” he said. “We got both.”