Key Points:

• The shift to all-electric cars could undermine the state’s ability to build and maintain roads

• ADOT study to determine how the shift to electric vehicles will affect fuel use tax receipts

• More fuel-efficient vehicles also complicate the fuel tax revenue

He’s describing the measure as a “freedom to travel” issue.

But a proposal Sen. Jake Hoffman got colleagues to include on the 2026 ballot would remove one option lawmakers have to ensure that electric vehicle owners in Arizona pay their fair share in taxes for road construction and repair. 

SCR 1004 would put a provision in the Arizona Constitution barring state and local government from imposing a tax or fee “based on the vehicle miles traveled.”

This comes as lawmakers continue to struggle with the fact that there are more and more vehicles on the road that use no gasoline at all. And that means they don’t pay the 18-cent-a-gallon gasoline tax that goes into the Highway User Revenue Fund.

Under the current system, the shift to all-electric cars could undermine the state’s ability to build new roads and, more importantly, upgrade and repair the ones we already have. But approval of the ballot measure would remove the option of charging electric vehicle owners who escape those gas taxes a fee based on their usage of Arizona roads.

Hoffman said it’s not a question of protecting those who use electric vehicles — as the driver of a Tesla cybertruck, that includes him — from the taxes generated on the sale of fossil fuels. Instead, the Queen Creek Republican said this is about protecting everyone from government overreach, regardless of the fuel they use.

“This is a measure that I’m confident that the voters will approve because it stands on the very simple principle that government should not be tracking or taxing your miles,” he said. “Regardless of what type of vehicle you own, regardless of how our roads are funded, freedom to move is a fundamental liberty that has a long-standing track record in America.”

And Hoffman said it’s more basic than that.

“The ability to tax is the ability to control by force,” he said.

Still, that leaves the question of how to pay for roads as consumers move away from fossil-based fuels.

There are more than 108,000 all-electric vehicles registered in Arizona. And while that’s a small percentage of the total fleet of more than 8.1 million cars and trucks, their use is growing exponentially, having more than tripled since 2020.

That trend so worries ADOT that it has contracted for a study to put a number on how many electric vehicles are driven in the state, and how that figure might change in the future. The agency is noting the placement of new fast-charging stations as part of the National Electric Vehicle Infrastructure program, which is “expected to increase the use of EVs both in Arizona and nationally.”

What the $74,835 study also intends to do is help ADOT determine how this shift will affect fuel use tax receipts. An agency spokesman stated that the report should be completed by the end of this year or early in 2026.

In the meantime, Sen. David Farnsworth is the latest in a series of lawmakers who have crafted legislation designed to provide some equity.

His SB 1471 would have allowed ADOT to establish a tax on electric vehicles and any other motor vehicles using something other than fossil-based fuels.

It provided two methods for the agency to compute the levy, and was designed to be comparable to the fuel tax that would have been paid by a similarly equipped vehicle using gasoline or diesel.

The Mesa Republican even included a provision to ensure everyone knew what he was trying to do and what was going on. It included language saying the intent is to ensure all alternative fuel vehicles are “paying an amount that is proportionally equal to their use of highways in the state” and, more to the point, that vehicles powered by petroleum-based fuels “are not paying for all of the costs relating to highway use and maintenance.”

However, Farnsworth, who chairs the Senate Committee on Education and Transportation, didn’t push it beyond an informational hearing in March, after receiving resistance from some of his colleagues.

“There’s the fear of government control and the camel’s nose under the tent, and before long they’re telling us where we can and can’t go,” he said.

“Is that paranoia or reality?” Farnsworth asked. “But the concern is real.”

So the measure never advanced. Still, Farnsworth said he will continue to try, saying, “We need to make things more fair.”

However, the failure of his bill also paved the way for Hoffman to line up the votes for his SCR 1004, which asks voters to permanently eliminate one option: imposing a tax based on miles traveled.

Hoffman said that doesn’t eliminate all options to tax electric cars.

For example, he said he has no problem with “consumption taxes” based on usage.

“That’s a very different thing,” Hoffman said. In fact, that’s the basis for the gasoline tax: Motorists pay based on the number of gallons of fuel purchased.

In this case, he said, electric vehicle owners are already paying fees and taxes to the electric company based on usage. And there may be more electrons used by someone who is charging a vehicle.

However, Hoffman said that all of this ignores the real solution: don’t tax gasoline, diesel or electricity.

“I believe it is the Legislature’s job to fund the core responsibilities, public safety and infrastructure being the most fundamental of those things,” he said.

That, however, doesn’t mean Hoffman supports higher overall state taxes to make up for the more than $1.8 billion that goes into the Highway User Revenue Fund each year —— $800 million of which is the levy on fossil fuels used to power motor vehicles. He figures there’s enough in the state’s $17.6 billion budget to pick up the cost.

His position is not a surprise: Hoffman has voted against virtually every spending plan since he was first elected to the Legislature in 2020. And he insists that there is no company — and no government — that cannot find a way to cut 4.5% from its spending.

That, however, is likely to get a fight from a majority of lawmakers who just approved the new budget and have priorities they want funded, whether it’s health care, prisons, social services or even pet projects.

Still, there is some precedent for the idea of the state using its income and sales tax revenues to fund road construction.

In fact, the new budget actually has millions of dollars in carve-outs for specific road projects, such as widening a stretch of Interstate 10 west of Phoenix and making improvements to State Route 347, which runs between the edge of Phoenix and Maricopa.

And it’s not just big projects. General fund dollars — the money collected mainly through sales and income taxes — are also being earmarked for projects such as adding a second right-turn lane to State Route 87 in Payson and installing traffic control systems in Colorado City.

There’s also the precedent of voters approving local sales taxes for specific transportation projects, including not just road construction and maintenance but also mass transit.

Gov. Katie Hobbs inquired about the issue, stating that the state needs a “creative solution” to find a way to ensure that everyone who uses state roads pays a fair share.

“The way that the gas tax works right now is not fair,” she said. The governor, however, said she had no answer.

But will she vote for the ballot measure?

“I have not thought that far ahead,” she said.

The issue of how to fund road construction and repair transcends alternate fuel vehicles and predates their current increasing popularity.

A decade ago, Noel Campbell, then a Republican state representative from Prescott, proposed a dime-a-gallon increase in the gas tax.

He pointed out that the rate was set in 1991— and hasn’t been adjusted since 1991. Had it kept pace with inflation, the levy in 2025 would be about 45 cents a gallon. Conversely, the buying power of the current 18-cent levy is worth only about a third.

Complicating matters — beyond the increasing popularity of electric vehicles — is that newer cars and trucks are generally more efficient than older ones. That means a typical vehicle travels more miles on a gallon of gas, resulting in less need to purchase fuel, even as the number of miles people travel — and the wear and tear — on state roads is not decreasing.

Campbell, however, found little appetite among fellow lawmakers for a tax hike, even if it were referred to voters. And successive lawmakers have had no more luck.