Legislature OKs auto fee boost to end raid on road cash
PHOENIX — The Arizona Senate joined the House Monday in approving a nearly $150 million yearly increase in vehicle registration fees designed to end raids on dedicated local highway funding in a rare vote by the Republican-controlled Legislature to boost state revenue.
The bill raises annual vehicle registration fees by about $18, according to Legislature’s budget analysts, and also eliminates the current super-low fee for alternative fuel vehicles. That potentially boosts yearly fees for electric vehicles from an average of $41 to $410.
The bill by Republican Rep. Noel Campbell of Prescott and Sen. Bob Worsley of Mesa would raise about $148 million a year to fund the state Highway Patrol. That would free up cash currently taken from a highway repair fund that has left counties and rural cities without sufficient money to repair their roads. It now goes to Gov. Doug Ducey for consideration.
Ending the raid on the Highway User Revenue Fund, known as HURF, is a longstanding goal of lawmakers from both parties. The fund raid is particularly hard for rural areas that have no way to pay for repairs and renovations without the state money, which comes from gas taxes and vehicle license fees.
Worsley urged lawmakers to approve the measure, saying it would give Ducey some breathing room as budget discussions focused on school funding progress.
“This will be the first opportunity to give the governor some room in our budget negotiations as we wrap up hopefully in the next couple of weeks,” Worsley told lawmakers as the vote progressed. “It replaces $100 million for rural roads and for cities and towns. It just seems like the right thing to do and I believe the governor will sign this bill if we can get it up to him.”
The bill passed the Senate on a 17-13 vote, with many Republicans opposed because it makes an end-run around a constitutional requirement approved by voters as Proposition 108 in 1992 that requires bills increasing state revenue needing a two-thirds vote to pass. It passed the House in February.
“Don’t kid yourselves,” Republican Sen. Warren Peterson said. “This is a tax increase that should have a Prop. 108 on it, but unfortunately this is a nice little loophole to get around it.”
The loophole was used by the Legislature in 2013 to approve Medicaid expansion, with a hospital fee set by an agency director paying the state costs and exempted from the two-thirds vote requirement. That led to a yearslong court battle that ended in November when the state Supreme Court decided such fees were exempt from the supermajority requirement.
“The expansion of Obamacare was an abomination, but this is much worse,” Peterson said. “At least with the expansion it was limited, but this is unbridled. This will touch every citizen in the state of Arizona because nearly every citizen owns a vehicle.”
When the proposals were introduced in the House and Senate in January, Campbell acknowledged there would likely be blowback in his conservative district. But he said the fee isn’t a tax and the need is dire.
“All I know is I’ll take heat. But there’s three essential things the government has to do, and all the rest are fluff,” Campbell said. “The three essentials are transportation, public safety and public education. And for too long we’ve ignored transportation.”
Some members on Monday worried the money would not go to transportation, but to help Ducey fund 20 per cent teachers’ raises he is pushing in hopes of avoid a strike.