Robert Robb: Arizona Gov. Doug Ducey will claim that the new per-vehicle assessment is a ‘fee’ and not a ‘tax.’ But that’s a distinction without a difference.
By signing House Bill 2166, Gov. Doug Ducey violated his “no tax increase” pledge.
The bill authorizes the director of the Arizona Department of Transportation to impose a new “highway safety fee” sufficient to fund 110 percent of the budget of the highway patrol. Legislative budgeteers estimate that at $149 million, and a new per-vehicle fee of $18.
Ducey will undoubtedly claim that this is a “fee” and not a “tax,” so he is still a tax virgin. But, in this case, that’s a distinction without a difference. And, as a matter of law, it may be a distinction without a distinction.
When a ‘fee’ is the same as a ‘tax’
The characteristic of a true user fee is that what someone pays is proportional to use or benefit. A flat per-vehicle assessment for patrolling state highways doesn’t meet that test.
In reality, the purpose of this assessment isn’t to fund the highway patrol. It is to free up funds for road construction and repair, and create room in the state general fund for other purposes, such as a teacher pay increase.
Taking advantage of the Bales loophole
In 1992, Arizona voters amended the state Constitution to require that any increase in state revenues, including the imposition of any new fee, be approved by a two-thirds vote of both chambers of the Legislature. HB 2166 fell far short of that, but supporters hope that it can slip through what can be called the Bales loophole.