Arizona lawmakers are seeking a legislative fix to a dispute between the state and city of Phoenix over the city's ordinance to increase taxes on rideshares to and from the airport.
Rep. Travis Grantham, R-Gilbert, introduced House Bill 2817 that would bar local governments from establishing any "tax, fee or assessment of any kind on transportation network companies" like Uber and Lyft that operate at airports in the state.
Phoenix City Council in December passed an ordinance that increases taxes on rideshares to and from the airport, despite warnings the ordinance would be challenged as being unconstitutional. Uber and Lyft also said that they would leave the airport if the ordinance passed.
HB 2817 would work retroactively, blocking the city's ordinance.
Last month, Attorney General Mark Brnovich asked the state Supreme Court to review the constitutionality of Phoenix's ordinance. Brnovich issued a legal opinion that the city's rideshare tax increases were "very likely" unconstitutional, citing 2018's Proposition 126 that was overwhelmingly approved by voters.
Prop. 126 amended the state's constitution to prohibit any city government from increasing or imposing new taxes or fees on citizens and business establishments offering services in Arizona. Prop. 126 does not repeal fees or taxes implemented before 2018.
“The Phoenix City Council is placing its policy preferences above the rights of the people to whom the government must always answer," Brnovich said in a previously released statement. “We will now take this matter to the Arizona Supreme Court and seek an expedited ruling.”
“This is the most definitive way to provide clarity on the law, protect Arizona taxpayers, and hold the City of Phoenix accountable,” the attorney general added.
On Jan. 21, Brnovich’s office moved to sue Phoenix over the city’s new rideshare fee structure at the airport. The case is currently pending before the Supreme Court.
Despite waiting for the state's Supreme Court to rule on the matter as the apparent course of action, Grantham and a bipartisan coalition of 30 lawmakers from both chambers of the legislature claim that this law will provide certainty on the issue.
Phoenix currently charges a fee of $2.66 to pick up passengers at the Sky Harbor Airport. The ordinance passed by the city would require operators to pay a $4 fee for pick-ups and drop-offs at the airport terminal curb. By 2024, the fee will increase to $5. The ordinance was to enter force on Feb. 1.
“I see it as an unfair fee, and I see it as picking on one specific service," Grantham said in a statement to the media. “When something has such an effect on residents like Gilbert, where I represent, or Glendale, Tucson, or you know, Winslow, it is our job to step up.”
HB 2817 was introduced to the state House on first reading on Monday.