Arizona Supreme Court reinstates massive income tax cuts

AZ Supreme Court reinstates massive income tax cuts

The Arizona Supreme Court tossed out a ruling by a lower court judge who sided with education advocates who gathered enough signatures to get a referendum on the ballot.

PHOENIX - The Arizona Supreme Court on April 21 ruled that the state’s voters do not have the right to reject a massive income tax cut approved by the Republican-controlled Legislature and Gov, Doug Ducey last year. The decision that means a nearly $2 billion cut that mainly benefits the wealthy is in effect.

The high court overturned a lower court judge who ruled in favor of education advocates who collected enough signatures under the state’s referendum law to block them from taking effect until voters could weigh in November.

Lawyers for the Arizona Free Enterprise Club, a conservative pro-business group that pushes for lower taxes and regulations, argued the state constitution does not allow referrals for measures that provide for the "support and maintenance" of state government and that the tax cut bill falls into that category.

The Supreme Court agreed in a brief order issued just two days after it heard arguments in the case. The order signed by Chief Justice Robert Brutinel does not explain the court’s reasoning, saying a full opinion will be released later.

Arizona’s constitution lets voters block newly enacted laws by collecting signatures from 5 percent of qualified voters. If they do, the law is put on hold until the next general election.

Prop 208: Arizona Supreme Court won't block tax increase for school funding

The Arizona Supreme Court on Aug. 19 allowed a new tax on high earners to remain in effect while a lower court will determine if the revenue it raises for schools will exceed a constitutional spending limit.

Republicans were planning on getting around the referendum by repealing the tax cuts and enacting larger ones, but that will no longer be necessary.

Under the new law, tax rates for most taxpayers would drop to a flat 2.5%, and revenue would be cut by $1.9 billion once the tax cuts are fully in place. That’s down from a range of 2.59% to 4.5%.