Republican Rep. Nancy Barto followed through on her threat to challenge Phoenix’s newly approved fees on rideshare companies like Uber and Lyft that operate at Sky Harbor International Airport and potentially put some $20 million of city funding at risk.
Barto, R-Phoenix, filed a complaint with Attorney General Mark Brnovich on Thursday, alleging that the fees violate a provision of the Arizona Constitution barring new taxes, fees or assessments on services. Voters approved the prohibition in 2018 when they passed Proposition 126.
“The Phoenix City Council’s plan to increase fees on ride-sharing companies is bad for consumers, is bad for the economy, and violates the State Constitution,” Barto said in a press release.
The Phoenix City Council on Wednesday approved the surcharge for the second time – the first vote in October was voided due to a clerical error – on a 7-2 vote.
Currently, rideshare companies like Uber and Lyft pay a $2.66 surcharge for every passenger they pick up at Sky Harbor, and pay no such fee for drop-offs. The council voted to increase the fee for pick-ups to $4 and to impose an identical surcharge for drop-offs. The fees will increase to $5 by 2024.
Supporters of the surcharge say it’s needed to cover the costs of transportation infrastructure at Sky Harbor that rideshare companies use.
Phoenix City Attorney Cris Meyer argued that the fees don’t violate the Arizona Constitution because they are a charge for the use of public property for commercial purposes.
“The constitution does not bar municipalities from charging a fee to access and use municipal-owned property. Many companies, from ground transportation to concessions, pay fees to conduct commercial business that provide services to customers at the airport. These fees for use of airport property are not a tax and are constitutional,” Meyer said in a statement provided by the city.
Barto filed what’s known as an SB1487 complaint. The 2016 law that the complaints are named after permits any legislator to ask the attorney general to review an action by any municipality or county if they believe that action violates state law. If the Attorney General’s Office finds a violation, the offending law must be repealed or the violator loses 10 percent of the money it receives from state tax revenues.
Phoenix is slated to receive about $215 million in shared revenue from state income taxes this fiscal year. That means it could lose about $21 million if the attorney general finds that the rideshare fee violates Prop. 126.