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AZ Faces Steep Costs for Road Needs

By Howard Fischer for Arizona Capitol Times

Financing the state’s freeway needs could mean Arizona motorists will pay higher gasoline taxes, an entirely new sales tax on fuel on top of that and find it’s even more expensive to register their vehicles.

And owners of all-electric cars likely would feel a hit, too.

At a meeting this month, members of the Surface Transportation Funding Task Force agreed it will take $20B in new dollars to meet the state’s growing needs. That doesn’t count another $40B that economist Alan Maguire, a member of the committee, said is needed for other road projects.

The panel will complete its recommendations for raising that much later this month. That includes not just likely higher costs for motorists at the pump but figuring out the best way to ensure that the increasing number of Arizonans who are buying all-electric vehicles pay their fair share of road construction and maintenance.

Once the committee finishes its work, it then will fall to Sen. Bob Worsley, R-Mesa, who chairs the Senate Transportation Committee, to sell the proposal — and the likely tax hikes it will take — to his colleagues.

Central to the issue is that tax revenues have not kept pace with construction needs.

Since 1996 the amount collected in gasoline taxes has increased by just 36 percent. Yet the state Department of Transportation reports the number of vehicle miles traveled has increased by 55 percent in the same period.

At this point, Worsley said the likely package will include an absolute hike in the gas tax. Maguire figures a dime a gallon on top of that 18 cents would raise anywhere from $1.9-$2.3B over 20 years.

Dollars also come from the state’s 2.8 percent annual vehicle license tax.

It is based initially on the manufacturer’s base price of the vehicle, but the taxable value drops automatically by 16.25 percent each year.

A 10 percent increase in the VLT would raise $2.4B over 20 years.

Alternate fuel vehicles pose a different problem.

All-electric cars pay no gasoline tax. And hybrids generally get much better fuel mileage.

On top of that, the state gives a VLT break. So a $30,000 alternate fuel vehicle pays a first-year VLT of $12, with a 15 percent reduction annually.

Worsley said that special rate has to go.

He also said the simplest thing would be to impose a surcharge of between $120 and $150 a year on registration fees.

Read more at Arizona Capitol Times.

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