PHOENIX β A new income tax surcharge on Arizonaβs wealthy to add more dollars to public education can take effect.
Arguments by business interests and some Republican lawmakers that Proposition 208 was so flawed that it needed to immediately be quashed were rejected Tuesday in a 21-page ruling by Maricopa County Superior Court Judge John Hannah Jr.
There appears to be little merit to the claim that only elected lawmakers are authorized to raise taxes, Hannah said. If nothing else, he pointed out that the Arizona Constitution makes the people equal with the legislature.
Similarly, he said when voters approved a constitutional amendment requiring a two-thirds vote for new or increased taxes, they worded it so as to apply only to the legislature and not to their own initiatives. And Hannah found little merit to the claim that the 3.5% surcharge on earnings above $250,000 for individuals and $500,000 for married couples filing jointly is not a sufficient revenue source for the money that will go to public schools and other education issues.
Finally, in declining to issue an injunction, the judge also concluded that enacting the tax, by itself, likely does not run afoul of constitutional caps on total spending on education. He said there are legitimate ways to interpret Proposition 208 in ways that make it legal.
And even if there is a legal problem β a point Hannah does not concede β he said it would require a full-blown trial, complete with evidence, to reach such a conclusion.
In the meantime, however, he said there is no immediate reason to declare the law or this provision illegal.
Hannah pointed out that while the higher tax rate officially took effect Jan. 1, it wonβt really be an issue for most people until April 2022 when they pay their income taxes. And even for people whose income is high enough to require them to pay estimated taxes, the judge said the worst that could happen is they pay a little more now and then could get a refund if Proposition 208 eventually is declared illegal.
All that technically leaves the door open for the foes of the tax, who tried unsuccessfully to keep the measure off the ballot in the first place, to renew their arguments at a trial. But they have an uphill fight.
In refusing to issue the injunction, the judge had to consider whether the challengers had a likelihood of success. And he said that does not appear to be the case.
Jonathan Riches, an attorney for the Goldwater Institute, called the ruling βunfortunate.β But he pointed out that Hannah is giving foes another chance to make their case at trial.
βWe are confident that once constitutional flaws with Prop. 208 are fully and finally litigated, our courts will act to protect Arizona taxpayers against the grave threat of its burdensome and permanent tax increase,β he said.
The ruling is a key victory for the backers of Invest in Education who convinced 51.7% of those who turned out in November to support the plan to add new dollars for education. It is expected to raise anywhere from $827 million to $940 million a year, depending on whose estimates are used.
Half of the dollars are earmarked for grants to school districts and charter schools to hire teachers and classroom support personnel. Those dollars also can be used to raise teacher salaries.
Another 25% is for student support personnel, with 10% earmarked to 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.
Opponents argued that it would be bad for small business. And they pointed out that, for the most wealthy, it effectively would raise the top tax rate in Arizona to 8%, a move they said would put a damper on economic growth.
But with Arizonaβs tiered tax system, only the earnings above that $250,000/$500,000 threshold are subject to the higher levy. Estimates are that only about 4% of Arizonans would be affected.
One of the key legal arguments by foes involves the question of who can raise taxes and what margin is needed.
Hannah brushed aside the claim that only the legislature has that power, pointing out that the Arizona Constitution specifically empowers voters to create and defeat legislation at the ballot box.
As a fallback argument, challengers pointed to the constitutional requirement for a two-thirds vote of the legislature for higher taxes, claiming that same margin also applies to voters. The judge found little merit to the claim thatβs what voters meant when they approved it in 1992.
βIt expresses the electorateβs intent to make it more difficult for the legislature to increase taxes,β Hannah wrote. βBut it does not follow that the voters intended when they enacted (the constitutional provision) to repeal or limit their own separate, co-equal power to increase taxes by initiative.β
That issue of the education expenditure limit is a bit more complex.
The Arizona Constitution sets a spending limit for all school districts in the state by taking the current revenues and adjusted for the number of students and inflation.
In anticipation that Proposition 208 could bust the spending limit, the drafters of Proposition 208 specifically said that the dollars raised by the new levy are exempt from that limit. But Hannah said thatβs not so simple, as the initiative is a law which, by definition, cannot overrule a constitutional provision.
The judge said, though, that Proposition 208 could be read so that the funds raised do not fall within the cap. He said the new dollars could be considered βgrantsβ which are not covered by the constitutional limit.
And even the new cash is subject to the limit β a point yet to be proven β Hannah said there is no evidence on the record that the extra cash will, in fact, exceed the revenue limits.
Photos: 2020 General Election in Pima County and Arizona
Ballot processing in Pima County
Updated
Ballot processing in Pima County
Updated
Ballot processing in Pima County
Updated
Ballot processing in Pima County
Updated
Ballot processing in PIma County
Updated
Ballot processing in PIma County
Updated
Ballot processing in PIma County
Updated
Ballot processing in PIma County
Updated
Ballot processing, Pima County
Updated
Ballot processing, Pima County
Updated
Ballot processing, Pima County
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election 2020 Senate Kelly
Updated
Election 2020 Senate Kelly
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election 2020 Arizona Voting
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Election Day, Pima County and Arizona, 2020
Updated
Judge throws out lawsuit, finds no fraud or misconduct in Arizona election
Updated
PHOENIX β A judge tossed out a bid by the head of the Arizona Republican Party to void the election results that awarded the stateβs 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 Wardβs attorney reviewed 100 of those envelopes.
And at best, Warner said, that examiner found six signatures to be βinconclusive,β 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
Fridayβs 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.
βThere have been questions,β 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 leadersβ request for the inquiry alleges there are any βirregularitiesβ in the way the election was conducted.
βAt the very least, the confidence in our electoral system has been shaken because of a lot of claims and allegations,β Fann said. βSo our No. 1 goal is to restore the confidence of our voters.β
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.
βThe rule of law forbids us to do that,β he said.
In fact, Bowers pointed out, it was the Republican-controlled Legislature that enacted a law three years ago specifically requiring the stateβs electors βto cast their votes for the candidates who received the most votes in the official statewide canvass.β
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 stateβs 11 electoral votes for Trump, who won Arizonaβs race that year.
βAs a conservative Republican, I donβt like the results of the presidential election,β Bowers said in a prepared statement. βBut I cannot and will not entertain a suggestion that we violate current law to change the outcome of a certified election.β