Arizona law collects new vehicle fee, frees up road revenue

Arizona drivers will soon have an extra fee when registering their vehicle.

Gov. Doug Ducey has signed into law a bill to collect a “highway safety fee.” The new fee, collected on all vehicles, will take effect Jan. 1, 2019.

Once fully implemented, the fee is expected to raise about $150 million annually.

Previously HB2166, the new law calls for the collection of an annual fee when owners renew their vehicle registration. The new fee is expected to free up transportation money for roads that has gone to support the highway patrol.

Troopers now get money mostly from the state’s general fund and the highway fund. The new fee is expected to fully cover costs to fund the Department of Public Safety.

Advocates said the new revenue will allow the state to apply hundreds of millions of dollars in coming years to other purposes – including roads and education. They add that the state will no longer need to raid the road fund that is supported by vehicle fees and taxes.

The governor’s administration says the new law will ultimately save the general fund about $110 million annually.

The new law also permits the Arizona DOT director to set the vehicle fee amount each year.

Critics said decisions about fees should not be set by an unelected official.

In addition, alternative-fuel vehicles will no longer receive a tax break the state has provided owners. The change also applies to large trucks that run on alternative fuel.

Fees for affected vehicles are estimated to increase by about $1,000 each year.

To view other legislative activities of interest for Arizona, click here.