By Robin Barker
I hope we’re all ready for the surprises the state has for us this year.
First of all, when you register your vehicle this year, you will see a “public safety fee” (not a tax) added to the final total. The “fee”is set by the ADOT director annually to cover the cost of the state Highway Patrol. This will purportedly free up funds to repair roads and help fund the teacher raises the governor promised.
A little background: the fee, in a bill introduced by Rep. Noel Campbell last legislative session, was originally estimated at $18 per vehicle. The cost was based on the number or vehicles currently registered. Unfortunately, when figuring out the fee, those who have multi-year registrations (two up to five years) were not taken into consideration, as they will be exempt until their due date comes up. Then, too, the Highway Patrol budget ended up being larger than originally thought; hence, the increase from $18 to $32 in order to raise the $185 million the Governor has built into his budget.
Rep. Michelle Ugenti-Rita wants to repeal the whole thing. She argues that the “fee” is actually a tax and that the move (having ADOT set the “fee” instead of calling it a tax) worked around the legislature to avoid the need for a two-thirds majority to pass. Gov. Ducey has said, as late as early December, that he will not sign any legislation repealing the fee. “That’s not on our priority list,” he said.
Senator Warren Pettersen, calling the fee, “the worst kind of tax increase,” wants to simply cap the rate at the $18 the legislature approved last spring.
So far, it looks like the “fee” will be charged for now. We will have to wait and see if the legislature tries to lower or delete it and what Gov. Ducey does about it.
In other “oh no” news, Gov. Ducey is making plans to conform Arizona’s tax code to the changes enacted in federal law, which will take effect with the 2018 federal income tax year.
The new federal law caps deductions for state and local taxes paid at $10,000 and modifies mortgage interest, home equity deductions and other smaller hits. If Arizona does the same, residents will pay somewhere in the neighborhood of $180 million to $200 million more in state taxes.
Congress tried to take the sting out their plan by reducing tax rates overall and increasing standard deductions, making it unnecessary to itemize for more tax payers. On the other hand, Ducey currently plans to leave rates and standard deductions as they are. He proposes to add the new tax funds to the “rainy day” fund.
Current House Speaker JD Mesnard, soon to be chairing the Senate Finance Committee, called the proposal a tax increase, “the largest one in modern history.” He added that Ducey waited until right before state tax forms are set to be printed and mailed out, thereby forcing the legislature to approve his plan.
Gubernatorial press aide Patrick Ptak denied the accusation and said that the change would affect the 2019 taxes, filed in April of 2020.
Money in, money out…
Senator John Kavanagh is proposing a bill that would allow those who feel they are innocent of speeding and other traffic violations to attend defensive driving classes if they can’t convince a judge of their innocence. The citation would not be applied to points on the violator’s license, nor reported to insurance companies. And those companies are not happy about the plan. Even Kavanagh acknowledges that good drivers might end up paying for bad drivers as insurance companies raise rates in order to cover their losses and protect their bottom line.
Oh, and then there’s Rep. Kelley Townsend’s war on teachers to think about. First of all, she’s introduced a bill that would prohibit schools (public and charter) from closing on scheduled school days, threatening fines of up to $5,000 if they do, which, somehow, individuals, not the district, would pay. The bill would also disallow the use of public school resources to influence elections or coordinate school closures.
By-the-way, the bill would allow schools to close, among other situations, if there is a plague of insects.
These issues will be well worth watching as the Legislature session begins in mid-January.
Photo above by Joanne West