Friday, August 19, 2022

NEW: AZ Supreme Court Explains How It Decided To Throw "Invest In AZ's" Flat Tax Referendum Off November Ballot (READ Opinion)

The Arizona Supreme Court released its Opinion this morning explaining how it decided to remove Invest In Arizona's referendum of the flat tax from November's ballot. Its conclusion relies upon Arizona's 1910 Constitutional Convention and a 1992 Court of Appeals decision.

The opinion was authored by Justice John Lopez and joined by four other justices. Justices Bill Montgomery and James Beene separately wrote that reliance on the1992 Greenlee County decision was not necessary. 

Arizona is among a minority of states that gives citizens the power to refer a new law (a "REFERendum")  to the ballot for the electorate to decide. The Constitution excepts a few types of measures from being referred. One of those types: "except laws immediately necessary...for the support and maintenance of...state government".

In 2020, Arizona voters passed Prop. 208 ("Invest In Ed"), which called for a new tax surcharge on wealthy Arizonans to help fund education. In 2021, the Arizona Legislature passed three separate laws to reduce the revenue and support for education by un-doing the voters' measure . Invest in Arizona - largely funded by the Arizona Education Association and Stand for Children - tried to collect referendum petition signatures to stop all three, but only succeeded in placing the flat tax measure onto the 2022 ballot. In April, the Supreme Court removed it, and today's Opinion is the full explanation of how they reached that decision.

(Later in 2021, the Supreme Court also struck down the underlying Prop. 208 surcharge, meaning that the Republican Legislature's workarounds - including the flat tax - were unnecessary but still in place.)

The Court today notes that the 1910 Constitutional Convention *removed* the word "appropriations" from the (above-cited) exceptions clause. No reason was given, but today's Court believes it must have been intentional. Lopez then leans on Wade v Greenlee County (1992) to conclude that "support" refers to "both the acquisition and allocation of funds."

We reject the notion that section 1(3)’s reference to “support and maintenance” is synonymous with “appropriations.” Measures that provide “support and maintenance” include laws that raise or disburse revenue, while “appropriations” merely disburse revenue generated through laws for support and maintenance.

The Supreme Court opinion also concludes that it did not matter that the flat tax measure *reduces* the support for education. " The net revenue impact of a bill in the short term may invariably differ from its long-term effect. Thus, all revenue measures that support and maintain existing state departments and institutions, including those that decrease net revenue, are exempt from referendum.4" (The footnote suggests that they are not saying whether a legislative effort to *eliminate* a tax would qualify for exemption from referendum.)

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

"AZ Law" includes articles, commentaries and updates about opinions from the Arizona Supreme Court, U.S. Supreme Court, as well as trial and appellate courts, etc. AZ Law is founded by Phoenix attorney Paul Weich, and joins Arizona's Politics on the internet. 

AZ Law airs on non-profit Sun Sounds of Arizona, a statewide reading service that provides audio access to printed material for people who cannot hold or read print material due to a disability. If you know someone who could benefit from this 24/7 service, please let them know about member-supported Sun Sounds. And, YOU can donate or listen here. 

Previous episodes of AZ Law can be streamed or downloaded here, or wherever you get your podcasts.


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