Arizona Supreme Court upholds Proposal 208 and does not allow spending limits to be broken


NSThe High Court of Rezona did not withdraw the voter-approved tax increase for the wealthy, but the influx of new income does not break the constitutional cap on education spending.

The Arizona Supreme Court remanded its investment in fan-education to the Trial Court on Thursday morning, saying it was too early to say whether the voting initiative was completely unconstitutional.

Arizona Senator Karen Fann, R-Prescott, and other lawmakers challenged the constitutionality of Proposal 208 in an attempt to suspend taxes until they could prove that they did not meet the constitutional convocation.

Lawmakers argue that only legislators can collect taxes, and voters did not approve the bill if they knew that most of their money was bound under spending caps.

The question is whether voters upheld Proposal 208 if they knew that most of the money might not be legally spent due to the state constitution’s spending restrictions.

The new law will raise approximately $ 800 million annually and will be distributed to state public schools to increase teacher salaries and fund other initiatives. The judge estimated that under current law limiting annual education spending, $ 600 million of that would not be accessible.

According to the majority opinion written by Judge Robert Brutinell, the defense’s view that the 3.5% tax is a “grant” is not valid, but the tax itself is not ready for a final verdict.

“We believe that direct funding is not included in the constitutional definition of grants in Article 9-21 of the Arizona Constitution, so Proposal 208 pays tax revenues in violation of the Education Expenditure Clause. It is unconstitutional to the extent that it requires that, “Brutinell wrote. “Similarly, the provisions not related to the remaining revenue of Proposal 208 are not individually feasible and therefore inseparable. However, in this preliminary phase of the case, such funds exceed constitutional spending limits. We refuse to withhold tax impositions until further proceedings are taken in the court of first instance because we cannot determine if there is scope. “

The court ruled that voters could impose taxes on themselves through a voting initiative. What the fan camp claimed was the sole duty of Congress.

Deputy Judge Ann Timmer partially opposed that if some were found to be unconstitutional, they should be allowed to continue the measures.

“Fans haven’t shown that Proposal 208 is facially unconstitutional,” she said. “But I disagree with the majority separability analysis and the framework imposed on the Trial Court to determine if Proposal 208 is unconstitutional, and almost certainly ruined the bill. , I disagree with that part of the opinion. “

Governor Doug Ducey responded to that opinion.

“The Supreme Court stated it clearly and clearly. Proposal 208 is” unconstitutional “in their words. As one justice said: the framework “almost certainly ruins the measure,” he said. “There is a clear legal path that Proposal 208 will be completely withdrawn. It’s only a matter of time. Today’s ruling is very positive for the state and taxpayers. Out-of-state supporters of the bill are bad words. And now they are paying the price. “

Proposal 208 was slightly passed in the 2020 general election. A 3.5% tax increase will be applied to incomes in excess of $ 250,000 for individual tax returns and $ 500,000 for joint tax returns. The increase in income tax has made Arizona the ninth highest income tax rate in the country at the highest marginal tax rate.Business supporters Called The new tax rate has been rated as an “increasing crisis” in terms of state competitiveness compared to other states that have recently reduced their tax burden.

Taxes are separate from regular state income and cannot be reduced or replaced by state legislators. To avoid this, the Republicans finally set up a budget to level the state’s income tax to 2.5%. They also included a 4.5% tax cap on what individuals can pay as a percentage of their income. And it reduced those subject to a 3.5% tax to a 1% state income tax burden.

Invest in Education is leading a campaign to take the initiative in the 2022 general election ballot to invalidate these laws.

This initiative overcame other challenges in lower courts and found a controversial aspect of the bill’s wording to retain constitutional convocation.

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tag: state, news, Arizona, Spending

Original author: Center Square, Cole Rotor Bach

Original location: Arizona Supreme Court upholds Proposal 208 and does not allow spending limits to be broken