A year ago Governor Napolitano’s Citizens Finance Review Commission suggested that voters should overturn Proposition 108, the constitutional provision mandating a two-thirds majority vote applying to any act that provides for a net increase in state revenues in the form of a tax, fee or assessment.

In short, the governor’s commission wanted to make raising taxes a lot easier.

But, really, such a tactic seems to be unnecessary. The Legislature has discovered that the way around the requirements of Proposition 108 is simply to implement a hidden tax, one that no one recognizes as a tax, one that hardly raises a dissenting vote.

Ladies and gentlemen, I give you H2224.

This stealthy tax increase that sailed through the Legislature was introduced as a bill that raises the statutory cap for the assessments on public service corporations that are charged by the Arizona Corporation Commission (ACC) to fund the Utilities Division of the ACC and the Residential Utilities Consumer Office and “make changes to the formula that determines the assessments.” Really, it is a backdoor tax increase on anyone with a telephone or electricity.

That means, your utility bill will be going up. No one told you? Of course not. This is a hidden tax. The increase on your electric or phone bill will be small, maybe even barely perceptible, but shouldn’t you know about it?

The reason that you don’t know about it is because this hidden tax is being implemented by the Arizona Corporation Commission, the consumer’s friend, to fund its own bureaucracy. Had a utility sought to increase its rates for its own benefit, the ACC would put the utility through a year of hearings and meetings and document exchanges and press releases about how they were fighting hard to prevent the utility from raising its rates. But, this rate increase, which the utilities simply collect and pass along to the ACC, is acceptable to the ACC. It’s their legislation. They want your utility bills to go up, because, this time, they are the beneficiaries.

If, as a matter of being honest with the ratepayer, a utility opposed the increase in the ACC assessment, what do you suppose would happen to a utility when it appeared before the ACC on some random issue for which it needed approval? Would the ACC warmly approve the utility application? Hardly. The utility would, in some form or fashion, pay the price for its opposition to the ACC legislation.

Unfortunately, some members of the Legislature were unclear about the ramifications of this bill. They were told that this statutory cap change is not a tax increase. And even if some legislators did know better, they probably bet that the passage of this bill would go undetected. Well, they were wrong on both counts. Because of Proposition 108, H2224 required an affirmative vote of two-thirds of both the House and the Senate. In other words, a vote in favor was a vote to raise taxes.

Finally, hidden taxes like this won’t go undetected any longer. The Arizona Free Enterprise Club is watching. We will highlight all tax increases that feed the growing state government and work to stop them. As H2224 illustrates, vigilance is required.

Steve Voeller is president of the Arizona Free Enterprise Club, a 501(c)(4) nonprofit organization whose mission is to advance policies that promote economic growth, limited government, fiscal restraint, and lower taxes for all Arizonans.