Just Taxes Blog by ITEP

Arizona Ruling Preserves High-Income Interests Over Education Investments, Popular Vote

Arizona Ruling Preserves High-Income Interests Over Education Investments, Popular Vote

March 17, 2022

Marco Guzman
Marco Guzman
State Policy Analyst

An Arizona court decision delivered an unfortunate blow to voters and those in the state who favor a progressive, adequate tax system that can fund critical priorities including K-12 education.

After an almost two-year legal battle, a Maricopa County Superior Court judge struck down Arizona Proposition 208, the voter-approved ballot initiative that would have increased the top marginal tax rate by 3.5 percentage points for individuals earning over $250,000 and couples earning over $500,000. The surcharge on high-income households was earmarked to fund education. The court’s decision is a devastating blow to everyone in the state who would have directly or indirectly benefited from needed increases in spending on education in a state that ranks among the bottom in average teacher salary and per student spending. The revenue would have helped fund tutoring and mentoring services for students, salary increases for teachers, retention programs for new hires, and mental health services for kids in high school.

Most egregious, however, is that this move only further emboldens attempts to undermine democracy in Arizona. Republicans have already chosen to use their slim, one-seat majorities in the Legislature to push for a wave of restrictive voting laws and unnecessary tax cuts aimed at providing a windfall for the rich. After Proposition 208 passed at the end of 2020, leaders in the majority used legislative means to undo the will of the voters and enacted a massive overhaul of Arizona’s tax system that will ultimately replace its graduated income tax with a 2.5 percent flat tax that will cost the state almost $2 billion annually.

Now that advocates did the hard work to collect signatures and force a veto referendum to decide on whether the flat tax goes into effect, lawmakers are calling for a special session to repeal the flat tax and replace it with a similar tax cut, effectively nullifying the referendum effort.

Teachers went on strike in 2018 to protest their low wages and inadequate resources, which were a result of the state’s history of regularly cutting taxes that only further reduced the revenues needed to fund vital services like education. The voters listened and understood that changes needed to be made and did so in an equitable way. It’s been the politicians, though, who have refused to accept this reality and it looks like there will be little in their way to stop them, unless voters speak up again during election season.

We first wrote about attempts to undermine democracy in Arizona last year as lawmakers worked to undermine the will of the voters. For more details on how we got here, read: Attacks on Voting Rights, Secret Tax-Cut Negotiations in Arizona Reflect Broader Trend to Undermine Democracy.