Arizona state lawmaker renews effort to raise fuel tax

One leading lawmaker in Arizona is not giving up on an effort to raise road revenue via a fuel tax increase.

House Transportation Chairman Noel Campbell, R-Prescott, introduced a bill during the 2019 regular session to more than double the gas tax and nearly triple the diesel tax. The bill was amended in committee to leave the gas tax rate unchanged. The proposed diesel rate increase, however, was revised to 8 cents.

Electronic and hybrid vehicles would also be subject to a road use fee.

The bill died when it failed to receive a House floor vote.

The road ahead

As preparations begin for the start of the 2020 legislative year, Campbell is again looking to get a fuel tax increase through the statehouse.

Arizona now charges 18 cents per gallon on fuel purchases. Unchanged since 1991, the tax rate raises about $750 million annually.

Campbell is pursuing a change that would at least double the current fuel tax rates.

He has said the rate increase would ensure that everyone is paying their fair share of ongoing maintenance of the state’s transportation system. He adds that the state is nearly $1 billion per year behind in transportation obligations.

Options for passage

The likelihood of a tax increase being enacted into law in the coming months is cloudy. A two-thirds vote in both statehouse chambers is required to advance a tax change to the governor’s desk. Gov. Doug Ducey, however, has indicated he is opposed to a tax increase.

The Republican governor has said the state has plenty of money to get work done on projects that include widening a stretch of Interstate 17 between Anthem and Sunset Point. He cites a nearly $1 billion state surplus.

The other option for tax increase proponents would be to leave a fuel tax rate change up to voters. Allowing voters the final say would require a simple majority at the statehouse. The governor’s approval would not be needed to put the issue on the statewide ballot.