PHOENIX – Rep. Noel Campbell is set to retire but before he exits stage left, he is leaving behind a bill that would double Arizona’s gas tax over the next three years. Currently the bill is stalled in the House but Capitol watchers are expecting it to be revived as a striker bill.
Striker bills, formally “strike-all-amendments,” are used by politicians to avoid the oversight and public engagement process through which most bills pass.
From Jose Borrajero, director of the Arizona People’s Lobbyist:
Considering what has been going on, it is unimaginable that any legislator would propose any kind of tax increase on fuel. But two legislators have done just that.
HB2899 – fuel; electric cars; hybrids; taxes CAMPBELL, LD1. This bill at first glance may appear to be harmless enough, because based on the short title one would assume it applies only to electric and hybrid cars. But it goes far beyond that because it includes a huge motor fuel tax increase. And HB2899 does not stop there. It also contains tax increases on natural gas, propane, and electricity. It has cleared the house transportation committee by a bipartisan 6-0-0. However, it has not gone through the rules committee and as of this writing it is not scheduled for a hearing, so most likely it is dead for this session.
HB2490 – appropriation; street and highway purposes FERNANDEZ, LD4. This bill appropriates an additional $200,512,200 from the general fund to be distributed among several counties. It passed the transportation committee 8-1-0. However, it can not advance unless it clears both the appropriations and the rules committees, and it has not been scheduled for a hearing in either committee.
It appears that both of these horrible bills are heading for defeat this session. However, folks are well advised to keep the cork on the champagne because either or both of these bills can surface again, in the form of a strike everything amendment, later this session.
Campbell’s HB 2899 will increase the gas tax over time to 36 cents per gallon. That is a 100 percent increase in current gas tax rate. The money generated by the tax is supposed to be used to fix and build roads across the state.
However, history shows that the current gas tax, known as the Highway User Revenue Fund (HURF) is used by the counties and municipalities for operations and management with only as small fraction used for roads.
Pima County Supervisor Ally Miller, an MBA, with a background in finance and accounting, has been working to educate fellow politicians on the realities of HURF and Vehicle License Tax (VLT) funding.
“… a mere $36 million was allocated to road repairs in FY 2020 in Pima County and the current proposal is for only $29 mil to be spent in the next fiscal year, FY 2021, which commences July 1, 2020,” stated Pima County Supervisor Ally Miller.
Few of the politicians who support the gas tax increase are actually aware of the level of funding their communities currently receive. They are surprised to discover that in Arizona’s two largest counties, the revenue distribution has grown quickly since 2015. Pima County’s 5 year growth rate in HURF (gas tax) revenues from FY2015 to FY 2019 is 20.6 percent. Maricopa County’s 5 year growth rate from FY 2015 to FY 2019 is 24.3 percent.
HURF revenues are distributed by the Arizona Treasurer to each county and each incorporated town and city (political subdivision) within its boundaries. Those funds are intended for road repair and development by each political subdivision:
|Counties And Cities/Towns Within||Highway User Revenues||Annualized|
(Over 5 Years)
These same political subdivisions also receive a special HURF distributions as well as VLT distributions meant for road maintenance. Although not included above, VLT nearly doubles the distributions these counties and communities receive.
Why raise the tax now?
Miller and others question whether the decision to raise the tax now is due to the fact that gas prices are at low levels, the economy is booming, wages are growing and historic employment levels? Do our legislators think that we won’t notice, they ask.
Some politicians have argued that Campbell’s bill is the only way to finally bring about an equitable solution for individuals who drive alternative/electric vehicles. They argue that those driving alternative/electric fueled vehicles have been getting a free ride on the backs of the rest of Arizona’s driver for years and this is a chance to finally make them carry some of the weight.
Experts note that there is an easy solution for these vehicles and that is the addition of a special assessment each year added to the vehicle license tax of these vehicles.
“The burning question for Rep. Campbell and others pushing this tax is whether they have actually performed an analysis on the distribution of funds versus what has been spent on road repairs in each of the jurisdictions? If so, please present this data to the public so we can see this burning need for more money,” stated Miller. “We know this isn’t the case in Pima County where a mere $36 million was allocated to road repairs in FY 2020 and the current proposal is for only $29 mil to be spent in the next fiscal year, FY 2021, which commences July 1, 2020. And it is reasonable to assume that other jurisdictions are doing the same. Without the analysis of the disposition of these monies how can the Legislature make this decision? Based on what…the cry for more money from the tax and spend bureaucrats?”
Miller and others have fought for a restriction on the funds so that they cannot be diverted to other projects. They note that there is no accountability required per the statutes.
“If Rep. Campbell and the Legislature truly want to fix and build roads across Arizona, they have to acknowledge the real problem: the waste of existing gas tax (HURF) funds. Then, they should amend the existing statutes to require annual reporting on each jurisdiction’s expenditure of those funds,” stated Steve Spain, a candidate for Pima County Supervisor. “The Legislature then needs authority to penalize jurisdictions that refuse to or fail to comply, and to compel corrective action prior to disbursing another cent to those jurisdictions. I expect Pima County would fall into that category.”
The bill was approved earlier this month by the House Transportation Committee on a 6-0 vote.
According to Capitol Media, the Arizona Petroleum Marketing Association’s lobbyist Mike Williams “told lawmakers that if the 1991 legislation” which is currently in place, “had an inflation index, Arizona now would have the highest gasoline tax in the Western states.”
“With such a small portion of the annual HURF money being spent to actually maintain our roads in Pima County, why would taxpayers want their taxes increased further? Using a significant portion of the HURF money to pay the salaries and overhead for the Pima County Transportation department results in paying hundreds of times more for overhead than the actual road work being done,” stated John Backer, a candidate for the Pima County Supervisor. “County administrator Huckelberry uses the HURF money for purposes of his choosing not for the road maintenance which is desperately needed. Taxpayers are demanding accountability on how our tax dollars are being spent. The county administrator and board of supervisor majority are not trusted to spend the HURF funds on roads as evidenced by road bonds failing to pass multiple times. It is critical that the legislation require jurisdictions to use the money to fund road repair.”