Investigation of Driver License Issuance Alternatives

This study develops an alternative model for issuing driver licenses and personal identifications in Kentucky. Under the current model, most licenses are distributed by circuit court clerks at 142 offices across the state while the Kentucky Transportation Cabinet (KYTC) provides central and regional support for specific license types. Given the cumbersome administrative structure and impending REAL ID requirements, both circuit clerks and KYTC administrators would like to explore an alternative distribution model. Researchers at the Kentucky Transportation Center (KTC) projected the costs of transitioning from the current issuance model to a centralized DMV model where licenses are distributed at 18 to 24 regional field offices. In FY 2020, the cost for having circuit clerks distribute licenses was roughly $18.5 million. A regional model will have initial costs between$10.4 and $16.4 million depending on the number of offices and employee compensation levels. If switching from a 4-year to 8-year license renewal cycle, the ensuing revenues would more than cover costs, although the License Fund allocation from each license sale should be adjusted so that all costs are covered and do not require additional Road Fund supplements. Optimizing the centralized issuance model will depend on transitioning from 4-year to 8-year license renewal intervals, completely transitioning issuance to KYTC and avoiding a hybrid distribution system and duplication of infrastructure, increasing allocations to the License Fund, implementing an online driver license renewal system in the near future, and transitioning away from the dated mainframe driver licensing database to a newer, more dynamic system