Gov. Jennifer Granholm's consumer advocate says insurance companies shouldn't profit from unaffordable auto premiums.
And state government? That's apparently a different matter.
There is little doubt that in these bad economic times, hundreds of thousands of Michigan motorists are breaking the law by driving uninsured vehicles. In Michigan, insurance is compulsory. And if you don't insure your car, you'll be fined.
But facing a budget crunch after taking office in 2003, Granholm cut a deal with lawmakers to impose added penalties, called "driver responsibility fees," for various offenses.
The idea was to discourage dangerous driving and bring in millions to state coffers at the same time. The fees generate more than $110 million annually, though if the state collected income taxes at the rate it collects these fees -- about 50-percent of the amounts assessed -- Michigan would be in receivership.
Some of the fees could be justified in that they impose stiffer penalties for dangerous criminal behavior on the road such as drunken or reckless driving, offenses which carry fees as high as $1,000 a year for two years.
Driving while intoxicated is the most penalized offense. The second highest category, according to a report last year by the Senate Fiscal Agency, is on the other end of the spectrum: driving an uninsured motor vehicle, nearly a quarter-million offenses in 2007.
The $200 fee charged for that offense can be half the cost of a bare-bones policy for the driver a jalopy with a clean driving record.
Now there are those who choose not to buy insurance because they'd rather spend the money on something else. Then there are those who -- when juggling rent, groceries and heating bills on a $10-an-hour job for which they have to have a car -- simply can't pay the premium.
How do they avoid insurance and still drive? In cities across Michigan, motorists can purchase a month of cheap insurance coverage that allows them buy a fresh vehicle registration tab. When the policy expires days later, they take the chance that they won't be stopped by the police in the next 11 months.
About a fifth of Michigan motorists are estimated to be without car insurance. Otherwise law-abiding, low-income motorists who do get stopped can soon find themselves ensnared in a costly legal trap that can take years to escape.
A motorist who can't pay at least a portion of that $200 responsibility fee within 60 days faces license suspension. Reinstating that license requires a separate $125 payment on top of what they already can't afford to pay.
What happens then? If they want to keep their job and need a car to do so, they drive not only without insurance, but with a suspended license. That citation invites still more driver responsibility fees, $500 a year for two years. As this new fee system has taken hold, offenses for driving with a suspended license have exploded, from 95,000 in 2005 to 138,000 in 2007.
Sen. Cameron Brown, R-Sturgis, has introduced legislation to eliminate the driver responsibility fees for driving without insurance or with an expired license. His bill would also establish an amnesty whereby motorists could arrange to pay 75 percent of what they owe within a two-month window. Other lawmakers want to see the whole fee system scrapped.
According to St. Joseph District Judge Jeffrey Middleton, it is "not uncommon in our court to see defendants who owe $5,000 to $10,000 to the state of Michigan. Unless they win the lottery, these people have little hope of ever regaining their lawful driving privileges."
Melvin Hollowell, a consumer advocate appointed by Granholm last year to examine the cost of auto insurance in Michigan, says Michigan should craft a low-cost premium option for low-income drivers with unblemished driving records. That would help. But it's not enough.
In last week's State of the State speech, Granholm said "we must do all we can to protect those who are hurting the most under the weight of this economic crisis."
A place to start would be for state government to stop hammering its taxpayers, uninsured motorists trying mightily to survive. Who are just trying to make it home to their kids after work, dodging crushing financial penalty all the way.
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