New Arizona vehicle fee in effect Jan. 1 frees up road revenue

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

A “highway safety fee” of $32 will begin being collected on renewals starting Jan. 1. The new fee is already being collected on newly registered vehicles.

According to the Arizona Department of Public Safety, owners who register a vehicle annually or pay for a two- or five-year registration will pay the entire fee amount up front for each registered year.

Once fully implemented the vehicle fee is expected to ultimately raise about $265 million annually.

Approved during the 2018 regular session, 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 vehicle 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 new law also permits the Arizona DOT director to set the vehicle fee amount each year.

Critics have 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.

Other states are looking for transportation revenue too: State legislatures to discuss possibility of fuel tax increases