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Tue, June 18

Arizona lawmakers get creative to raise funds for roads

PHOENIX - Unable to find the legislative votes for a statewide gas tax hike, a Senate panel on Tuesday, Feb. 14, approved a package of alternate methods to raise money for needed road construction and repair.

One measure would impose a new series of fees and taxes on motor vehicles designed to raise about $120 million a year.

SB 1146 is designed to replace the money that Gov. Doug Ducey plans to take from gasoline taxes and vehicle registration fees to fund the state Highway Patrol. Sen. Bob Worsley, R-Mesa, said that siphons off dollars needed by the counties outside of Maricopa County to keep the roads from further deterioration.

Potentially more far reaching is SB 1147. It would give county supervisors the right to ask voters to impose their own dime-a-gallon tax on fuel and then to keep the revenues generated for local road needs.

The unanimous approval for both by the Senate Committee on Transportation and Technology comes a week after a parallel House panel voted to put the question of a 10-cent fuel tax hike on the 2018 ballot. But that measure crafted by Rep. Noel Campbell, R-Prescott, stalled after Rep. Michelle Ugenti-Rita, R-Scottsdale, refused to give it a hearing in the House Ways and Means Committee which she chairs.

“She said, ‘I don’t like it,’” Campbell said. Ugenti-Rita did not immediately return calls seeking comment.

And even if Campbell’s measure did go to voters, there’s no guarantee it would get approved.

“We have a political environment, I think in Arizona right now, where we’re just not going to get a statewide gas tax increase approved,” Worsley said. He said that leaves those who believe more funding is necessary scouring for alternatives, at least for the time being. And one option is punting the issue to individual counties and their voters.

“If they feel some pressure that they need to relieve before this gets done as a state, this allows the counties to vote on up to a 10-cent increase,” Worsley said. The levy would last up to 20 years.

Scott Higginson, executive director of the Interstate 11 Coalition, said similar measures already have been approved in Nevada and Utah, with proceeds earmarked for use only within that county.

He said Clark County alone, where Las Vegas is located, raised $720 million in the past three years. Higginson said some went to 400 different local road projects including widening of streets and improving intersections, while some is being reserved for Nevada’s portion of the proposed Interstate 11 that would run between Phoenix and Las Vegas.

“This is one way to go about raising additional funds,” Higginson said. And it leaves the decision with county officials “who know best where those dollars need and ought to be spent.”

SB 1146 is a bit more complex.

Right now owners of gas- and diesel-powered cars and trucks pay an annual registration levy based on the value of the vehicle. This legislation would add one-half percent to the tax rate, something that would compute out to about $150 a year for a $30,000 vehicle.

But it’s more complex than that.

Owners of all-electric vehicles pay a different levy, about $12 for a $30,000 vehicle. Worsley, who owns a Tesla, pointed out that since they don’t need gasoline they don’t pay the state’s 18-cent-a-gallon gas tax.

“What I paid for registration when I bought my car a couple of months ago and what the annual maintenance is, and that I never stop at a gas station ... it’s really not fair,” he said.

“I use the same roads,” Worsley said. And he also gets to use the carpool lanes even if he’s the only one in his car.

The legislation also contains an increase in registration fees for commercial vehicles and trailers.

Any move to raise more money for road construction is likely to face some opposition, including from Ducey.

“We’re not looking to raise taxes,” gubernatorial press aide Daniel Scarpinato repeated Tuesday.

That kind of opposition annoyed Sen. Kate Brophy McGee, R-Phoenix.

“For those who are not supportive, I would really like to ask the question: What’s your solution?” she said in supporting the fee increase package.

Scarpinato said his boss is focused on other financial issues, including adding more dollars to K-12 education. He said that using $89 million in vehicle license fees and gasoline taxes to pay for the Highway Patrol frees up that cash for other uses.

Ducey hasn’t always opposed new fees.

In 2015, Ducey proposed propose a $7-per-vehicle increase in registration fees to help pay for the Highway Patrol rather than use general fund dollars. That proposal went nowhere; Ducey has not asked for it since.

Sen. Karen Fann, R-Prescott, said she is frustrated by the failure to have revenues keep pace with needs - or even with inflation, what with the state’s 18-cent-a-gallon gasoline tax remaining unchanged since 1991.

“Nobody likes the T-word,” she said. But Fann said the government can’t fulfill its responsibility to maintain roads without money.

“We cannot move our goods, we cannot move our people, we cannot get to work or even go to vacation if we don’t have decent roads and transportation.”


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