PHOENIX — Foes of Proposition 208 suffered their first legal setback late last week.
Maricopa County Superior Court Judge John Hannah on Friday rebuffed a bid by business interests trying to kill the voter-approved tax to keep attorneys from Invest in Ed from intervening in the lawsuit. The judge said the campaign committee and its leaders have a legitimate interest in protecting the plan they worked to get approved.
And Hannah took a bit of a slap at the request by Brett Johnson, the attorney for those trying to quash the initiative and the tax it would impose, for trying to keep the Invest in Ed committee out of the case.
Johnson was arguing that the issue of the legality of Proposition 208 is a strictly legal one. And that, the attorney said, makes the state, which will administer and collect the tax, the ideal party to defend the case.
Anyway, Johnson argued, Invest in Ed is strictly a political committee with no legal standing to defend a tax.
But Hannah pointed out that Johnson’s clients include the No on 208 Committee, itself a political committee, which spent money in its unsuccessful effort to convince voters to reject the measure. He said it would make no sense to allow foes to participate in the legal arguments about whether the tax can take effect while locking out the proponents.
“They clearly have the right to intervene,” the judge said. “They have standing.”
Hannah’s ruling sets the stage for a Dec. 23 hearing in which Johnson wants a ruling to block the state from imposing the tax while its legality is debated.
The initiative imposes a 3.5% surcharge on incomes above $250,000 for individuals and $500,000 for married couples filing jointly. Proponents say that would raise about $940 million a year for K-12 education.
Johnson is claiming that only the Arizona Legislature can impose a new tax, something that constitutionally requires a two-thirds vote.
Supporters of the initiative counter that the state constitution specifically empowers voters to create their own laws and makes them co-equal to the legislature.
But Johnson has a backup argument to address that. In essence, it says if voters can hike taxes through a change in state law — a point he is not conceding — it would require approval by two thirds of those who showed up at the polls. But the measure passed with just 51.75% in support.
Broader constitutional issues aside, Johnson points out there is a constitutional limit on the total amount that can be spent on education.
Yet a provision in the initiative says that any funds raised are not subject to that limit.
Johnson, however, said a change in the statutes — which is what Proposition 208 is — cannot trump constitutional provisions.
Hannah set a hearing for Dec. 23 to let both sides present arguments.
Johnson is hoping for a quick decision from Hannah on the premise that whoever loses will end up seeking Supreme Court review.
He wants a final decision from the justices before Jan. 11, the day the Arizona Legislature convenes for its 2021 session. Johnson said lawmakers, including legislative leaders who also are plaintiffs in the lawsuit, need a decision as they prepare the budget for the 2021-2022 school year.
But Andy Gaona, attorney for Invest in Ed, said the funds collected from the levy won’t make it into school coffers until the following budget year, making a rush for a judgment unnecessary.
