The Arizona Free Enterprise Club

Lawmakers can’t say they weren’t warned.  Last year, when the Arizona legislature proposed giving their taxing authority away to the Director of the Arizona Department of Transportation (ADOT), we fought hard to stop what the Club considered one of the worst pieces of legislation in recent history.

Now those chickens have come home to roost.

At the beginning of the month, ADOT decreed they will be imposing a $32 license tax on every privately owned registered vehicle in the state of Arizona.  The new fee is 50 percent higher than what was estimated when the tax increase was being debated last spring.  The fee is supposedly set at the value necessary to fund Highway Patrol, which was previously paid for through the gas tax, VLT revenues and the state general fund.

Why is the fee much higher than originally thought? After the ADOT Director was granted unilateral authority to set the fee, the budget to fund Highway Patrol came in $37 Million higher than originally estimated.  They also discovered that they were poor at counting cars and that the pool of taxable vehicles was smaller than originally thought.  The result: an $185 Million-dollar tax increase.

Now many lawmakers who voted for the bill are outraged by the Director’s audacity to levy a tax that is higher than they believe it should be.  What did they expect? This is what happens when you farm out core governmental functions to bureaucrats. They empowered the Director to enact the tax and now lawmakers  are upset that he is doing exactly what they told him to do.

This likely won’t be the only sting taxpayers feel from the new car tax if it is not repealed. Nothing in the law precludes the ADOT director from raising this fee every year.  There are no controls in place to stop bloated budgeting or gaming the numbers to generate revenue for other purposes.  Nothing to stop this fee from being assessed arbitrarily, making it higher for certain types of vehicles i.e. imposing a “climate change” tax for gas guzzlers. And no protections exist for low-income individuals who are less able to afford the fee.

Policymakers thought that by handing off fee authority to the ADOT director that they could quietly raise taxes without having to take responsibility for the new fee.  They were wrong.

Voters know a tax when they see one, and they won’t be very sympathetic to bureaucrat-blaming or assertions that this is a user fee. They will be further incensed by the sneaky maneuvers used to skirt the constitutional requirement of a 2/3 majority vote to enact a new tax.

Hopefully the same lawmakers that are having buyer’s remorse will do the right thing and repeal this absurd tax from the books.

A group of Phoenix residents and business owners successfully submitted over 40,000 signatures to the city clerk yesterday to refer an initiative to the ballot to end the $1 Billion construction of future light rail projects.  The committee held a press conference to mark the momentous achievement.

After the city of Phoenix railroaded citizens of South Phoenix by  pushing plans of a light rail extension on Central Ave that would reduce the number of traffic lanes from four to two, a grassroots effort emerged to beat back the disastrous plan.

Since community opposition began to coalesce in April of this year, the group has successfully stormed city hall, held community forums that reached thousands of residents, and stalled the 2-lane project on Central.

Their latest efforts were bolstered by support from residents and business owners throughout the city who would also be negatively affected by the expansion of light rail near them.

Building a Better Phoenix (BBP) put the City, the Federal Transit Administration, and Valley Metro on notice to cease any further funding or construction of light rail projects until the citizens have a chance to vote on the initiative, which will likely be in May or August.

This is a true David and Goliath story as the citizens’ group will likely be outspent 10:1 by the light rail and construction lobby.  But facts are on their side.   Instead of spending 40 percent of the city’s transportation revenues on light rail which serves less than 1 percent of the population, BBP would divert the money to be used for infrastructure improvements, including roads and bus service, which alleviates congestion.

A lot will ride on the success of the upcoming campaign, especially for South Phoenix who will experience certain gentrification of their neighborhoods, increased crime and homelessness in their community, and inaccessibility of emergency services with the 2-lane configuration.

The City of Phoenix is in desperate need of infrastructure improvements.  Their roads are riddled with potholes and many are falling into complete disrepair.  Especially in South Phoenix, many bus stops lack proper shading, long stretches of road are without sidewalk, and residents complain of poor lighting.  Light rail has long been a rat hole of the taxpayers’ finances while also being ineffective at increasing mobility or convenience to residents.  If the BBP initiative passes, money will be able to be diverted to higher priority challenges and more directly serve the citizens and businesses of Phoenix.

We hope the taxpayers of Phoenix will take this golden opportunity to hold city hall accountable and pass this historic initiative.

Recently the City of Phoenix did something shockingly out of character.  They made a good financial decision.

Two weeks ago the city council voted 7-1 to end their membership with the Arizona League of Cities and Towns.  The League is an organization that depends on taxpayer money to hire lobbyists to persuade Arizona lawmakers to pass or defeat bills often contrary to taxpayer interests.  At $145,000 a year, the City of Phoenix represented the largest single membership of the League.

Several of the council members cited the ineffectiveness of the League as their reason for their exit.  Although it is likely that the City will simply use the money to hire more internal or contract lobbyists, the vote was still monumental as Phoenix has been a member of the League for over 80 years.

The City of Phoenix’ decision will be a significant signal to other Arizona cities and towns and may spur other local councils to weigh their investment in the organization.

The practice of local municipalities enriching lobbyists to fight for more government authorities and against good reforms that benefit taxpayers is common place.  Just three years ago, the Club did independent research into just how much cities were wasting on lobbying activity.   But the costs aren’t just monetary.  Every year, dozens of bills are introduced at the legislature that promise important protections for taxpayers in the way of property rights, economic liberty and free speech.  And each year dozens of city lobbyists work to ensure their defeat.

Though the City of Phoenix’ decision to remove itself from a big organization that solely exists to fight for more government might not have been philosophic – it does represent a win for taxpayers.  Hopefully more cities will take their lead; at least on this decision.