UPDATE: Arizona Supreme Court Will Consider Challenge To Flat Tax Referendum Petitions (Prop. 307)

UPDATE 3/2 at 12:50pm: The Arizona Supreme Court has set oral argument for April 19 at 11:00am. (20 minutes each side.)

The Arizona Supreme Court decided this afternoon to consider the Arizona Free Enterprise Club's challenge to putting last year's flat tax law onto November's ballot to let voters decide. The Justices will now set oral argument on the matter.

AZFEC unsuccessfully challenged Invest In Arizona's referendum challenge to the flat tax, which the Legislature passed (and Governor Ducey signed) in part to blunt the Invest In Ed Prop. 208 tax surcharge passed by voters in 2020. AZFEC appealed the Superior Court decision as an expedited election matter - which would skip the intermediate Court of Appeals.

Duty Justice Ann Timmer today decided that normally a challenge to an initiative or referendum would not be expedited unless it was bumping up against the ballot printing deadline. In this case, that deadline is not until late August.

Upon review, the Court notes that absent looming ballot printing deadlines or other considerations that would render the matter moot before this Court’s review, appeals of initiative and referendum challenges should be filed with the court of appeals. See ARCAP 10(d)(2). If reasons exist to transfer the appeal to this Court under ARCAP 19(a), a party to the appeal should file a petition to transfer under Rule 19(b). That did not occur here. Nonetheless, IT IS ORDERED that the Court hereby waives the procedural requirement and accepts the appeal.

Timmer asked the Clerk to set it for oral argument (and did not ask for that to happen soon).

This pending matter, and the one currently pending on Prop. 208 itself, are both hanging over the current legislative session. Republicans first used the uncertainty as reason for not quickly waiving the schools' aggregate expenditure limit ("AEL"), and are now trying to decide whether to nullify the pending Prop. 307 by "repealing and replacing" the flat tax. The timing of that possible special session might hinge on when the Supreme Court's oral argument is set for.

This article was reported by AZ Law founder Paul Weich. Paul is currently running for a seat in Arizona's House of Representatives.

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