Arizona Supreme Court will let judge decide Prop 208 case

Arizona judge given time to make Prop 208 ruling

The Arizona Supreme Court has rejected a request by lawmakers to force a Maricopa County judge to make an immediate ruling on Prop 208.

PHOENIX (AP) - The Arizona Supreme Court on Friday rejected a request from Republican lawmakers who asked it to bypass a lower court judge and immediately rule that a tax on the wealthy to fund education that was approved by the state’s voters in 2020 can’t be enforced.

The ruling from the high court said it would not interfere with Maricopa County Superior Court Judge John Hannah’s handling of the case. Hannah has been considering how to rule since early January, and GOP lawmakers contend that he’s stalling. He has until March 11 to issue a decision.

"The superior court is within its jurisdiction, and this Court cannot at this time conclude that it can or should compel the superior court to act in a more expeditious manner," Chief Justice Robert Brutinel wrote.

The special action petition was filed with the Supreme Court by House Speaker Rusty Bowers and Senate President Karen Fann and other opponents of the tax two weeks ago. It noted that the Supreme Court found a key provision of Proposition 208 unconstitutional last August.

Fann and Bowers argued that the court’s ruling left Hannah with just one job — determining if the new money from the voter initiative puts the state’s schools above a constitutional spending cap.

Both sides in the suit last month stipulated that it likely would, and Hannah’s "task changed from the discretionary work of administering a trial to the ministerial duty of entering judgment in Plaintiffs’ favor," according to lawyers for the GOP lawmakers.

The Supreme Court’s order Friday rejected that definition of Hannah’s job and said it will not deny the proponents of the new tax the opportunity to contest the legal conclusion drawn from the facts Hannah is weighing.

The spending cap passed by voters in 1980 has been a major issue this legislative session, and the House and Senate waived its provisions for this budget year on Monday. Schools were going to hit their limit by March 1 and would have been forced to enact major spending cuts because they can’t legally spend more than the $1 billion the Legislature has already appropriated for the current school year.

Lawmakers can vote to raise the constitutional spending cap year to year.

The Supreme Court decision in August said that a Proposition 208 provision that created a workaround for the spending cap was unconstitutional. The initiative was expected to raise about $800 million a year for K-12 education, and got around the cap by calling the money "grants."

Republican lawmakers and GOP Gov. Doug Ducey reacted last year by enacting a new tax category that would exempt small business income now taxed on personal returns from the Proposition 208 tax, cutting about $292 million from the tax revenue schools would get under the initiative.

Lawmakers also created a way for those taxpayers still hit by the surtax not to pay it directly by backfilling most of the promised Proposition 208 money with general fund cash.

Proposition 208 imposes a 3.5% tax surcharge on income above $250,000 for individuals or above $500,000 for couples.

The Invest in Education Act was backed by education advocates across Arizona and was an outgrowth of a 2018 teacher strike that resulted in educators getting a 20% pay raise but fell short of other major school funding boosts.

Despite the teacher raises and more than $1 billion in new education spending pumped into education in recent years, Arizona schools remain among the lowest-funded in the nation and teacher pay is ranked near the bottom.

(Related video) Battle over education funding brews at Arizona Capitol

Republican lawmakers are urging the Arizona Supreme Court to immediately rule that a voter-approved tax on the wealthy can’t be enforced, saying the high court already found a key provision unconstitutional and a trial court judge is needlessly delaying issuing a ruling that would effectively kill the measure aimed at funding schools.