Minnesotans faced with sticker shock over car tab renewals: "It's just very expensive"
If you have a newer car, you may be in for some sticker shock when you renew your Minnesota license tabs. That's because the formula for calculating fees has changed due to a 2023 bill.
If your car is less than five years old, you could even be seeing tab prices go up year over year.
Jeff Craig drives a Subaru Forester. He bought it used, but was shocked when he renewed his tabs.
"We paid the tab on it for the first time and the next year it was more expensive," Craig said.
The new formula means the average driver paid $178 in registration taxes this year — a 20% increase. Craig thinks it unfair.
"The car depreciates, but the tax goes up? Really? Is that how that's supposed to work? I don't thing so," he said.
"People are frustrated"
But the 2023 bill didn't just change the state's overall formula for calculating license tab fees; it also changed the way it calculates the depreciation of your vehicle.
The changes were designed to boost funding for transportation in the state.
GOP state Sen. John Jasinski has a bill to roll back the changes.
"When you drive it off the lot, it depreciates down rather quickly, and now they're keeping that value rather high in those first couple years," Jasinski said.
The state calculates that your new car loses 5% of its value a year, so 10% over two years. The Kelley Blue Book estimates that over two years, the average new car loses 30% of its value.
"If you look at a new car, we're the most expensive state in the nation right now for having vehicle license tabs, gas tax and motor vehicle sales tax," Jasinski said. "People are frustrated. It's just very expensive."
The House Transportation Committee on Wednesday discussed a similar plan to rollback the fee increases. It failed to advance because the vote was split—all bills in the tied House require bipartisan support to pass.
"If you vote yes for this [bill], you're cutting teacher's pay, you're cutting home health care pay," said DFL Rep. Brad Tabke, co-chair of the committee. "You are cutting roads and things we in Minnesota generally care for."
But the state says tabs for older cars are going down, and that many Minnesota drivers will pay less. And If you can hang onto your car for 11 years, your renewal cost is a flat $35 plus taxes and fees.
Some drivers WCCO spoke with said they understand the need to raise fees.
"I know that part of, you know, fees and things like that that we pay help us have safer roads to drive on," said motorist John Tolo. "So as much as I don't necessarily want to pay for stuff, I think if it's going to cover things that we need to have so things are safer when we're driving, I'm not against it."
The bill to roll back the changes is moving forward in the House, but it's stalled in the state Senate. Jasinski says his proposal hasn't gotten much response from the Democrats yet.