Proposition 208, Arizona school tax approved by voters, died after court ruling

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A judge said on Friday that a tax on high-income Arizona residents to fund education spending that voters approved in 2020 cannot be enforced due to a Supreme Court ruling. State and ordered that its collection be permanently blocked.

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.

“This Court understands the order for removal as an instruction to declare Proposition 208 unconstitutional in its entirety and to bar its operation permanently, if the Court finds as a fact that the annual limits on educational expenses imposed by the Arizona Constitution will prevent Arizona public schools from spending a “material” amount of Proposition 208 tax revenue in 2023,” Hannah wrote. “On this basis, the Court is compelled to strike down Proposition 208.”

The decision comes 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.

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 would hit their limit by March 1 and would have been forced to make major spending cuts because they would have been unable to legally spend more than $1 billion the legislature had already allocated for education. current school year.

Legislators can vote to raise 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 expected 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.

Prop 208 supporters, opponents react to decision

In the aftermath of the decision that invalidated Proposition 208, proponents of the initiative are speaking out, as the decision has left them devastated and confused.

“What the Supreme Court has done has long-term implications beyond education funding. She’s saying politicians matter more than voters, and that’s not OK,” said Rebecca Gau, director Executive of Stand For Child Arizona. “I think it’s a valid point that the 1.7 million voters who voted for Prop 208, I think they expect us to go as far as possible, but at the same time, we have to honor how doable it is. Is the court so corrupt that it’s no use?”

Officials from the Goldwater Institute, which first filed the lawsuit challenging the initiative, also spoke about the decision.

“There were two parts to this initiative: a massive tax increase, then another part that required the government to spend a lot of money on schools, but the state constitution includes a limit on how much the government can spend” said Timothy Sandefur, vice president of litigation at the Goldwater Institute. “What today’s ruling says is that everyone agrees that the spending would exceed the constitutional limit, and therefore the entire initiative is invalid.”

Supporters, meanwhile, said their fight is not over and they are currently discussing whether to appeal the decision.

The Associated Press (AP) contributed to this report.

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