Proposition 208, creating a tax on the wealthiest Arizonans to fund education, was approved by about 52% of voters in November, but business groups and Republican lawmakers are asking a judge to void it.
PHOENIX — The fate of a voter-approved tax on the rich to fund education could depend on whether a judge believes the money raised will be “grants” to school districts.
The Invest in Ed group that backed the initiative says that’s how the language in Proposition 208 should be read, its attorney Andy Gaona told a judge on Wednesday.
He said the initiative spells out in detail how the money raised will go out in “grants to school districts and charter schools.”
But an attorney for Republican lawmakers and business interests trying to quash the levy urged the judge to reject that interpretation.
“It’s torturing the language,” Dominic Draye told Maricopa County Superior Court Judge John Hannah.
What Hannah concludes is crucial.
The Arizona Constitution imposes an “aggregate expenditure limitation” on school districts, a figure essentially determined by making annual adjustments to reflect inflation and student growth. Draye said that applies to all revenues received by a school district.
But Proposition 208 spells out that the money raised — anywhere from $827 million to $940 million a year, depending on whose estimate is used — is not subject to the limit.
The problem is that the initiative enacts changes in law, and Draye said that cannot supersede the constitutional cap.
Gaona does not dispute the supremacy of the constitution.
He points out, however, that the constitutional definition of local school revenues does not include “grants.” That means the dollars raised and the money given out are not subject to that limit, he argued.
Hanging in the balance is the vote to impose a 3.5% surcharge on adjusted incomes above $250,000 for individuals and $500,000 for married couples filing jointly. Estimates are it would affect about 4% of Arizonans.
It spells out that 50% of the money would be in “grants to school districts and charter schools ... for the purpose of hiring teachers and classroom support personnel.” Those funds also could be used to raise salaries.
Another 25% is for student support personnel, with 10% earmarked to help retain teachers in the classroom, 12% for career and technical education and the balance into a fund to help pay the college tuition of students who go into teaching.
Voters approved the measure despite a campaign financed largely by business interests to kill it. Now some of the same groups, joined by Republican lawmakers, are trying to keep it from taking effect.
Draye has a laundry list of what he contends are legal flaws in the initiative.
For example, a constitutional amendment, previously approved by voters, requires a two-thirds vote when the Legislature wants to enact a new or increased tax. Draye contends the same requirement exists when voters themselves approve a new tax.
Proposition 208 had a margin of approval of slightly more than 51.7%.
Hannah, however, did not appear to be buying the idea that when voters decided it takes two-thirds of the Legislature to approve new taxes, they also were enacting limits on themselves.
“Isn’t the law pretty clear that the people acting through initiative can constrain the Legislature in a way that’s different?” he asked.
Draye also sought to convince Hannah that it is illegal for the initiative to tell lawmakers they cannot use the money raised from this tax to reduce the state’s financial obligations to schools.
But he acknowledged his strongest argument is that question of allowing the funds raised to be spent even if the amount exceeds the spending cap.
As Draye sees it, a “grant” involves something that is voluntarily given and there is discretion exercised by the entity providing the grant. By contrast, he said, the money at issue here is being raised and given out through a mandatory tax.
And if nothing else, Draye said the whole purpose of excluding grants from the spending limit was to allow districts to get things like federal dollars without hitting the constitutional cap. What’s at issue here, he said, are dollars raised locally from Arizona taxpayers.
Gaona, however, derided Draye’s arguments about what the constitution — and its exception for grants — mean as “fascinating pontifications.”
“It does not say ‘private grants,’” he said. “It does not say ‘discretionary grants. It says ‘grants of any type.’ ‘’
If Hannah doesn’t buy that, backers of the initiative have some alternate arguments.
First, Gaona pointed out, is that there is no evidence the school spending will hit the constitutional limit, even with the additional dollars from Proposition 208.
In fact, he pointed out that the state is spending less now than anticipated because a larger share of children are attending school remotely instead of sitting in classrooms due to concerns over COVID-19. And the state pays less aid to districts for remote learners than for kids in classroom seats.
Draye countered it makes no sense to argue that the spending cap won’t be affected. “The whole goal here is to radically increase funding,” he said.
Second, Gaona noted that the Legislature itself is free to raise the expenditure cap every year with a two-thirds vote.
“The funds will be collected, the funds will be there,” he told Hannah. “And if and when the expenditure cap ever becomes a problem ... the predictable and common-sense approach for legislators from both parties will be to come together to approve spending above the expenditure cap.”
Draye disagreed. “It certainly isn’t likely to happen,” he said. Even if it is possible, he said that’s irrelevant to the legal arguments.
The first issue for Hannah to decide is whether to immediately enjoin the law from taking effect.
To do that, he would have to conclude that the challengers are reasonably likely to succeed once there is a full-blown trial.
But even if he doesn’t grant the injunction, that still leaves another opportunity for challengers to seek full trial. Hannah gave no indication when he will rule.
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Judge throws out lawsuit, finds no fraud or misconduct in Arizona election
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PHOENIX — A judge tossed out a bid by the head of the Arizona Republican Party to void the election results that awarded the state’s 11 electoral votes to Democrat Joe Biden.
The two days of testimony produced in the case brought by GOP Chairwoman Kelli Ward produced no evidence of fraud or misconduct in how the vote was conducted in Maricopa County, said Maricopa County Superior Court Judge Randall Warner in his Friday ruling.
Warner acknowledged that there were some human errors made when ballots that could not be read by machines due to marks or other problems were duplicated by hand.
But he said that a random sample of those duplicated ballots showed an accuracy rate of 99.45%.
Warner said there was no evidence that the error rate, even if extrapolated to all the 27,869 duplicated ballots, would change the fact that Biden beat President Trump.
The judge also threw out charges that there were illegal votes based on claims that the signatures on the envelopes containing early ballots were not properly compared with those already on file.
He pointed out that a forensic document examiner hired by Ward’s attorney reviewed 100 of those envelopes.
And at best, Warner said, that examiner found six signatures to be “inconclusive,” meaning she could not testify that they were a match to the signature on file.
But the judge said this witness found no signs of forgery.
Finally, Warner said, there was no evidence that the vote count was erroneous. So he issued an order confirming the Arizona election, which Biden won with a 10,457-vote edge over Trump.
Federal court case remains to be heard
Friday’s ruling, however, is not the last word.
Ward, in anticipation of the case going against her, already had announced she plans to seek review by the Arizona Supreme Court.
And a separate lawsuit is playing out in federal court, which includes some of the same claims made here along with allegations of fraud and conspiracy.
That case, set for a hearing Tuesday, also seeks to void the results of the presidential contest.
It includes allegations that the Dominion Software voting equipment used by Maricopa County is unreliable and was programmed to register more votes for Biden than he actually got.
Legislative leaders call for audit but not to change election results
Along the same lines, Senate President Karen Fann and House Speaker Rusty Bowers on Friday called for an independent audit of the software and equipment used by Maricopa County in the just-completed election.
“There have been questions,” Fann said.
But she told Capitol Media Services it is not their intent to use whatever is found to overturn the results of the Nov. 3 election.
In fact, she said nothing in the Republican legislative leaders’ request for the inquiry alleges there are any “irregularities” in the way the election was conducted.
“At the very least, the confidence in our electoral system has been shaken because of a lot of claims and allegations,” Fann said. “So our No. 1 goal is to restore the confidence of our voters.”
Bowers specifically rejected calls by the Trump legal team that the Legislature come into session to void the election results, which were formally certified on Monday.
“The rule of law forbids us to do that,” he said.
In fact, Bowers pointed out, it was the Republican-controlled Legislature that enacted a law three years ago specifically requiring the state’s electors “to cast their votes for the candidates who received the most votes in the official statewide canvass.”
He said that was done because Hillary Clinton had won the popular vote nationwide in 2016 and some lawmakers feared that electors would refuse to cast the state’s 11 electoral votes for Trump, who won Arizona’s race that year.
“As a conservative Republican, I don’t like the results of the presidential election,” Bowers said in a prepared statement. “But I cannot and will not entertain a suggestion that we violate current law to change the outcome of a certified election.”