Court ruling kills 2020 voter-approved Arizona school tax

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PHOENIX (AP) — A judge ruled Friday that a tax on high-income Arizona residents to fund education spending that voters approved in 2020 cannot be enforced due to a ruling by the state Supreme Court and ordered that its collection be permanently blocked.

The decision means that Proposition 208’s plan to hire more teachers and give big raises to educators won’t happen. There will also be no raises for counsellors, bus drivers and other support staff, or money for teacher training, vocational education and other initiatives.

Maricopa County Superior Court Judge John Hannah’s decision was widely expected after the Supreme Court ruled in August that the tax was unconstitutional if it placed schools above a legal spending limit. He referred the matter to Hannah to make that decision.

Proponents of Proposition 208 and Republican opponents, including the Speaker of the House and the President of the Senate, agreed in January that new revenue from the Tax on the Rich was almost certain to push spending above what threshold.

Hannah wrote that because of the way the Supreme Court ordered him to consider the legal issues, he had no choice but to invalidate Proposition 208.

But his decision also indirectly criticized the High Court for its reasoning, noting that while the legislature retains the power to fix problems with the laws it passes, the ruling removes that possibility when the people circumvent lawmakers to enact their own laws. .

“The logic of (the High Court’s decision) entirely absolves the legislature of any political responsibility to accommodate policy decisions that the electorate makes on their own initiative,” Hannah wrote. “If lawmakers can find a legal loophole to an extent that they politically disagree with, their motivation is no longer to fix it but rather to exploit it.

“They can then point to the political obstacles created by their own opposition as a reason for the courts to stop the political fight and declare the legislature the winner,” he wrote.

The decision came after years of efforts by education advocates to increase school spending in the state. Arizona has one of the lowest teacher salaries and per-student spending in the nation, even after the Republican-controlled legislature and GOP Governor Doug Ducey increased spending by more than $1 billion. per year since 2018.

Ducey, a tax-cut supporter who has repeatedly criticized Proposition 208 and vowed to kill it one way or another, hailed the decision as a “victory for Arizona taxpayers.”

“This is another step in repairing the damage of Prop 208 and ensuring that we continue to enjoy the lowest flat tax rate in the country,” he said in a statement.

Joe Thomas, president of the state teachers’ union, said Proponents of Proposition 208 would seek a way to appeal, though it’s unclear what legal recourse is possible. More importantly, he said, Friday’s loss means K-12 schools won’t get the money voters wanted.

Thomas said lawmakers could easily fund Proposition 208 goals from a large budget surplus, if they wanted to.

“The legislature can fix all of this without raising taxes at all,” Thomas said. “And we’ll see if they do.”

Beth Lewis, director of pro-education group Save Our Schools Arizona, was appalled but noted that Hannah had little choice given the Supreme Court ruling.

“Essentially at this point we have three branches of government that are against public schooling,” Lewis said.

The constitutional cap on school spending passed by voters in 1980 has been a major issue this legislative session, and the House and Senate waived its provisions for this budget year last month.

Schools were going to hit their limit by March 1, in part because when lawmakers extended another voter-approved tax in 2014, they allowed it to count against the cap. Schools would have been forced to enact major spending cuts.

Legislators can vote to increase the constitutional spending limit from year to year.

The Supreme Court’s decision in August declared that a provision of Proposition 208 that created a workaround for the spending cap was unconstitutional.

The initiative was supposed to raise about $800 million a year for K-12 education and skirted the cap by calling the money “grants.”

Republican and Ducey lawmakers responded last year by enacting a new tax class that would exempt small business income now taxed on Proposition 208 personal returns, cutting about $292 million in tax revenue schools would get. as part of the initiative.

Lawmakers also created a way for taxpayers still affected by the surtax to not pay it directly by filling most of the money promised from Proposition 208 with general funds.

Proposition 208 imposed a 3.5% surtax on income over $250,000 for individuals or over $500,000 for couples.

The Education Investment Act was backed by education advocates across Arizona and was an offshoot of a 2018 teachers’ strike that saw educators win a pay raise of 20%, but has not been able to further major school funding increases.

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