Arizona voters will not vote in a veto referendum to repeal a new income tax law in November.
The Arizona Supreme Court last week ruled against a veto referendum that challenged two sections of an omnibus appropriations bill signed by Gov. Doug Ducey (R) in June 2021. The sections (13 and 15 of Senate Bill 1828) would reduce Arizona state revenue from four brackets to two brackets and reduce brackets to a flat rate of 2.50% when state revenue exceeds $12.976 billions of dollars.
In Arizona, income of $26,500 or less is taxed at 2.59%, while income of $159,001 or more is taxed at 4.50% (the brackets for those who pay jointly are double that). dollar amounts). Articles 13 and 15 would change the four bands into two bands of 2.55% and 2.98%.
The citizens behind the campaign for the referendum veto, Invest In Arizona, sought to take the issue to the polls. Both the Arizona Education Association and Stand for Children have backed the campaign, raising concerns about the impact of a flat tax rate on funding for Arizona schools. Invest In Arizona filed the veto referendum in July 2021, shortly after SB1828 was enacted.
The Arizona Free Enterprise Club challenged the veto referendum as unconstitutional, stating that the Arizona Constitution prohibited veto referendums against bills providing for the support and continuation of state government. Invest in Arizona attorneys argued that the lump sum tax portion of SB1828 does not fall into this category because it would result in less revenue for the state government.
Meanwhile, PAC Invest in Arizona has raised $5.29 million and filed over 215,000 signatures. In November 2021, Secretary of State Katie Hobbs announced that there were enough signatures collected for the measure to appear on the ballot in 2022.
The issue went to Maricopa County Superior Court, and in December 2021, Judge Katherine Cooper ruled against the Arizona Free Enterprise Club, ruling that Arizona voters have the right to decide the referendum. . The judge said that while there is no right to put tax increases to the ballot, this referendum does not fall into that category because, if successful, it would leave the state with more than income.
This decision was appealed and brought before the Supreme Court of Arizona. On April 21, 2022, the Arizona Supreme Court ruled in favor of the Arizona Free Enterprise Club, ordering that the veto referendum be withdrawn from the ballot. The court agreed that Sections 13 and 15 of SB1828 fall within the criteria of “sustaining and sustaining” the Arizona Constitution and that this measure cannot be presented to voters on the ballot.
Scot Mussi, president of the Arizona Free Enterprise Club, said the decision was a “huge win for the taxpayers of our state.” David Lujan, executive director and CEO of the Arizona Children’s Action Alliance, argued that the flat tax would devastate Arizona’s future and take away the voice of voters. Recently, the Arizona Supreme Court also struck down Proposition 208, a voter-approved measure that enacted a 3.50% income tax on income over $250,000 to fund K-12 schools. .
Currently, four measures are certified as being on the ballot in Arizona.