Report: Real ID Act could generate major expenses for states

The Real ID Act, which requires states issuing drivers' licenses to conform to federal antiterrorism rules, could increase the cost of issuing a driver's license to $90, up from between $10 and $25 currently, according to a report issued today by Citizens Against Government Waste, a conservative advocacy group.

The Homeland Security Department is expected to release guidelines soon on which machine-readable technologies?including magnetic strips, barcodes or radio-frequency identification (RFID) chips?must be used to meet Real ID Act standards. When such devices are placed on plastic identity cards, the cards become smart cards.

RFID chips in particular bring major new expenses?costing $17.4 billion to implement over 10 years?and a potential threat to privacy, according to CAGW's report.

Using cost projections modeled on studies performed by the London School of Economics, the taxpayers group estimates the cost of implementing RFID chips or similar technology for 196 million drivers' licenses at $17.4 billion over a 10-year implementation, the report said.

That estimate includes $2 billion in initial costs, $2 billion for renewals, $2.7 billion for database costs, $6.8 billion for system management, $3.4 billion for personnel costs, and $500 million for smart card readers.

Each state's cost would be about $348 million, or $90 per license.

The cards would be required to include a name, birth date, address and photo, but once established they also could be used to hold much larger quantities of data?possibly health, shopping and travel records?that may be required by government agencies in the future, the report warns.

The smart card "has the potential to track every movement and decision made by the cardholder," the report added.

Furthermore, sensitive personal data is at risk of being hacked or accessed by unauthorized individuals through drawbacks in the technologies, the 22-page report asserts.

"Installing RFID chips or similar technology into every driver's license will be an expensive, invasive and less secure way to update identification documents," the report said.

The Real ID Act was approved by Congress in May as an attachment to an emergency supplemental appropriation for the war in Iraq. Its goal is to standardize the process of granting drivers' licenses among the 50 states to ensure a basic level of protection against terrorists.

Currently 49 states use magnetic strips or two-dimensional barcodes on their drivers' licenses, typically paired with additional security features such as watermarks. "Either of these options, especially two-dimensional barcodes with additional layers of security, is more than adequate to validate a driver's license and issue safe and secure identification," the taxpayers report said.