Arizona Prop 141 explained: Proposed ban on vehicle mileage taxes

For Tucson residents, Proposition 141 could shape how Arizona pays for roads in the years ahead. The measure would amend the state Constitution to prohibit Arizona and local governments from creating a tax or fee based on the number of miles a person drives. It also would restrict government from tracking or limiting how far someone drives without that person’s consent. Voters will decide the issue Nov. 3, as one of eight statewide measures on the general election ballot. Early voting is already underway, and registered voters can review the official arguments for and against the proposal in the state’s general election publicity pamphlet.

The proposal is arriving as Arizona’s traditional source of transportation revenue becomes less reliable. The state collects an 18 cent tax on each gallon of gasoline, with much of that money supporting road construction, maintenance and improvements through the Highway User Revenue Fund. But vehicles are using less fuel because of improved efficiency, while electric vehicles do not use gasoline at all. That means roads still require funding even as the number of taxable gallons declines. Ted Maxwell, chair of the Arizona State Board of Transportation, said the transportation system is responsible for more road miles and faces higher costs, while its primary funding source has remained essentially unchanged.

The growth of electric vehicles illustrates the challenge. Arizona had about 4,700 electric vehicles in 2016, according to Department of Energy figures cited in reporting on the proposition. By 2025, that number had risen to nearly 142,000. As more drivers use electric vehicles and fuel efficient cars, a gas tax collects less from road users whose vehicles still rely on public streets and highways. That situation has led lawmakers and transportation officials to consider other ways of raising money. One option is a vehicle miles traveled tax, also called a mileage fee or road usage charge, in which motorists pay according to the distance they drive on public roads.

Prop. 141 would take that option off the table in Arizona. It would bar both state and local governments from establishing a mileage based tax or fee, and it would prevent them from monitoring or limiting a person’s driving without consent. The measure does not cover every possible vehicle situation. Its restrictions exclude miles driven by commercial vehicles that operate across state lines when an interstate agreement already governs the reporting of fuel taxes or registration fees. It also excludes vehicles owned and operated by Arizona, a county, city, town, municipal corporation or another Arizona political subdivision.

The measure reached the ballot through a legislative referral, meaning lawmakers voted to send it directly to voters rather than placing it there through a signature gathering campaign. The vote to refer it was largely divided by party, with Republican lawmakers supporting the proposal and most Democrats opposing it. A yes vote would add the new protections to the state Constitution. A no vote would leave the current constitutional language on taxation in place, according to the Arizona Legislature’s analysis. Because it is a constitutional amendment, future lawmakers would face a more difficult process if they wanted to change the policy.

Supporters present Prop. 141 primarily as a protection against government surveillance and higher costs for drivers. Aimee Yentes, vice president of the Arizona Free Enterprise Club, said mileage programs could expose drivers to privacy concerns by collecting information about where and how far they travel. Supporters also argue that some mileage programs are designed not only to replace gas tax revenue but to encourage people to drive less. They say Arizona residents should not be taxed or monitored based on ordinary travel and should retain the ability to decide where and when they drive. From this perspective, placing the restriction in the Constitution would prevent a future administration or Legislature from creating a system that drivers might consider invasive.

Opponents focus on the effect of removing a potential transportation funding tool before Arizona knows what its future needs will be. Maxwell described mileage based charges as a potentially fair way to have road users contribute according to their use, particularly as gasoline consumption changes. He said other approaches, including vehicle licensing fees and sales taxes, could be considered, but argued that Prop. 141 would leave fewer choices for maintaining roads. Opponents have also questioned how the state could adequately repair and fund highways if gas tax revenue continues to fall without access to mileage information or a road usage charge. Their argument is not necessarily that Arizona must adopt a mileage tax immediately, but that lawmakers should not be prohibited from studying or considering it later.

Arizona would not be the first state to examine this approach. The Tax Foundation reported that 37 states have researched vehicle miles traveled policies or explored pilot programs. The second account of Prop. 141 said that, by 2025, 24 of those states had either tested a pilot program or operated an active mileage tax program. The variety of experiments elsewhere is part of the debate in Arizona. Supporters see them as evidence of a possible tracking and taxation model that should be rejected. Opponents view them as examples that could help Arizona develop a future replacement for shrinking gas tax revenue. If Prop. 141 passes, Arizona would be the first state to constitutionally prohibit creation of a VMT program.

For Tucson area voters, the immediate question is whether to preserve that future option or prioritize a constitutional guarantee against mileage taxes and government travel monitoring. The proposition is part of a crowded Nov. 3 ballot that includes statewide questions as well as local issues that vary by community, including measures involving schools and local taxes. Voters can consult the Arizona Secretary of State’s publicity pamphlet for the official arguments, along with legislative analysis of the measure. The election will determine whether Arizona continues to consider mileage based transportation funding or removes that possibility before the state decides how to respond to changing vehicles, changing driving patterns and declining gas tax revenue.