Angered that a new charge for Arizona auto owners will cost double what was forecasted, a Republican lawmaker has proposed reducing and capping the fee.
Sen. Warren Petersen, R-Gilbert, said a public safety fee charged when Arizonans register their vehicles should be cut from $32 to at least $18, the amount state budget analysts estimated the fee would cost as lawmakers voted on it in February and April.
The fee is intended to fully fund the state’s Highway Patrol within the Department of Public Safety, but is set by the director of the Department of Transportation.
Essentially, ADOT Director John Halikowski is tasked with dividing the Highway Patrol budget, plus a 10 percent buffer, by the number of vehicles that need to be registered this year. With a budget of roughly $168 million and 5.8 million vehicles to register, Halikowski arrived at $32.
Petersen, who voted against the bill granting the fee-setting authority to the ADOT director, said the higher-than-advertised charge is “exactly what people feared.”
“We always have these estimates and people make their decisions off of estimates, but how often are those predictions accurate?” Petersen said.
Capping the fee at $18 would at least reflect the terms that lawmakers thought they were agreeing to when they voted for the fee, he said.
“I think a lot of people based their decision off that $18 number, so I would hope we could get enough people to agree to that,” Petersen said. “I’d like zero, but the lower the better.”
Capping the fee would have a ripple effect that threatens Gov. Doug Ducey’s spending priorities.
When the House approved a bill to create the fee in February, it was pitched as a way to ensure that Highway Patrol operations were fully-funded, thus eliminating the need for a longstanding practice of sweeping funds earmarked for road construction and repairs. Lawmakers had recently begun to allocate money from the General Fund to the Highway User Revenue Fund, which receives money from various gas taxes and vehicle fees and was the source of the swept funds.
But as the Senate took up the bill for a vote in April, the fee was sold as way to help pay for Ducey’s proposal to give teachers a 20 percent pay bump.
Like Petersen, Senate President Steve Yarbrough, R-Chandler, was fundamentally opposed to granting another agency director the authority to set a fee. For most Republicans, the maneuver is no different than a hospital assessment approved by the Legislature in 2013. That fee, which was essential to funding then-Gov. Jan Brewer’s push for Medicaid expansion, was pilloried by Republicans who viewed it as an illegal bypass of the Arizona Constitution’s limitations on generating new revenue.
It takes a two-thirds vote of both the House and Senate to adopt new taxes or fees. The bill to create the fee, and give the authority of setting it to an agency director, was approved by just a 17-13 vote in the Senate.
But even Yarbrough said he was willing to vote for the bill, had it been necessary to get the 16 votes needed for its approval, despite his personal objections.
“I also realize that, if we’re going to accomplish certain other vital objectives, sometimes you have to make those kinds of decisions,” he said in April.
The day after the vote, Yarbrough said that “other vital objectives” was obviously a reference to fulfilling Ducey’s vow of a 20-percent raise. The fee was then estimated to free up $107 million annually, he added.
“The commitment is to get to the 20 percent in 2020 and to do so without taxes,” Yarbrough said. “That, of course, with me, involves a couple of winks over what we did yesterday on the (vehicle registration fee).”
Petersen is banking on buyer’s remorse from some lawmakers who voted for the bill, like Rep. Noel Campbell, the Prescott Republican who sponsored the measure. But Petersen’s got a headstart when it comes to support from his fellow Republicans, a majority of whom voted against it.
Only four of the Senate’s 17 GOP lawmakers voted for the bill. In the House, 10 Republicans voted for it, and 24 voted against it.
Patrick Ptak, a spokesman for the governor, warned that capping the fee now would upset the balance of funding that was freed up for road maintenance – and left unsaid, the General Fund dollars essential to funding other areas of the budget, like education.
“The fee was intended to fund 110 percent of the highway patrol budget to protect public safety, and free up resources for infrastructure, including in rural areas of the state where resources our especially needed,” Ptak said. “Any reforms to the fee should be responsible and keep those priorities in mind.”