Arizona education advocates file signatures to force vote on Ducey’s 2022 tax cuts

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Laura Gomez

Arizona mirror

Education groups on Tuesday filed hundreds of thousands of signatures to prevent Governor Doug Ducey’s income tax cuts, the largest in state history, from coming into effect and to force a public vote on them.

For this to actually happen, at least 118,823 of the 215,787 signatures submitted by the Invest in Arizona coalition must be considered valid by election officials. If so, Arizona voters will decide the fate of tax cuts in November 2022.

Ducey’s income tax cuts, which served as his political legacy during his two terms as governor, significantly reformed Arizona’s tax system. Instead of a gradually graduated system with a maximum rate of 4.5%, Arizona will switch to two income tax rates: 2.55% for people earning $ 27,272 per year and 2.98 % for those who earn more than that. Legislative budget analysts estimate these cuts will cost the state about $ 1 billion in revenue.

The median household income in Arizona is around $ 62,000, which will provide a tax savings of $ 42 under the new proposal. The benefit of the tax cut skyrockets as income increases: households earning at least $ 500,000 will save $ 10,000; those who earn at least $ 1 million save almost $ 45,000; those who earn more than $ 5 million will save nearly $ 350,000 per year.

The referendum was a reaction to the tax cuts advocated by Ducey and which served as his political legacy during his two terms as governor. The tax cuts themselves came in response and were designed to lessen the effect of the education investment law on Arizona’s wealthy. The measure, which voters approved in 2020, imposes a 3.5% surtax on income over $ 250,000 for individuals and $ 500,000 for couples, with the money being directed to public schools to increase income. teacher compensation and increase overall funding.

Initially, the Invest in Arizona campaign aimed to prevent the entry into force of three laws later this month: the Senate Bill 1827, which caps the tax rate at 4.5% for people whose incomes are greater than $ 250,000 for individuals or $ 500,000 for joint filers; Senate Bill 1828, which changes Arizona’s income tax system to just two brackets, and creates a single rate of 2.5% starting in 2023 if state revenues hit certain triggers; and the Senate Bill 1783, which creates a new corporate income tax with a 4.5% rate on flax that some taxpayers can opt for – and all taxpayers who do so would be exempt from the Invest in surtax. Education.

Rebecca Gau, executive director of Stand for Children, said the coalition submitted 215,787 signatures to stop income tax cuts and 123,531 to block SB1783 on Tuesday. The groups have stopped pushing to block SB1827, the coalition said on Tuesday.

Because the referendum to block SB1783 only collected 5,000 more than the minimum, there is virtually no chance that it will survive the signature review process.

In addition to the monumental task of collecting more than 118,000 signatures in just 90 days, the Invest in Arizona coalition is likely to face challenges in court.

On July 21, shortly after the launch of the Invest in Arizona campaigns, the Arizona Free Enterprise Club filed a complaint seeking to waste the time and effort of group leaders, volunteers and paid broadcasters.

The conservative group, which has supported the tax cuts, argues that the new tax laws are exempt from the ballot process under the Arizona Constitution.

The coalition called the legal arguments “far-fetched, unfounded and untested, simply for the purpose of eroding the rights of Arizona citizens and voters.”

A plea in this case is scheduled for November 5.

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