Arizona Law Cuts Phoenix Police Towing Revenue
A new state law has the Phoenix Police Department freezing some open positions.
In fiscal year 2017-18, Phoenix police towed about 35,000 vehicles. Of those, about 5,000 were impounded because the drivers had suspended licenses.
But a state law that took effect earlier this year says police can no longer impound a vehicle over a suspended license. Assistant Police Chief Mike Kurtenbach recently described the impact to the council’s public safety subcommittee.
”The towing fees are what support the program for our vehicle impound detail,” he said. “The 5,000 fewer tows immediate impact, because of the administrative fee, is $750,000.”
He said the department will keep five vacant positions open which is expected to cover about $350,000 annually, leaving a projected shortfall of at least $400,000 which helps support the remaining 14 positions.
Kurtenbach said the loss could be as high as $1 million when the loss of revenue from impounded vehicles that have been abandoned and sold is factored in.
The Phoenix Police Vehicle Impound Detail is supported by a $150 administrative fee for each vehicle towed and a profit share with towing companies that is equal to 34 percent of revenues from the auction sales of abandoned vehicles.
During the last fiscal year, the department said administrative fees generated $1.2 million and auction sales generated $1.1 million.
If the revenue loss from the change in state law turns out to be as high as projected and the difference is not made up through contracts with towing companies and/or new fees, the city might have to consider using general fund dollars.