AZ Supreme Court Will Review Constitutionality of Prop. 208 Tax Hike

March 4, 2021

The Arizona Supreme Court announced this afternoon that it will immediately hear the constitutional challenge to Proposition 208 brought by a group of legislators and taxpayers represented by the Goldwater Institute. The lawsuit argues that the initiative violates several provisions of the state Constitution, including limits on spending and tax increases.

“Today’s order shows that the Supreme Court understands how important these constitutional challenges are,” said Timothy Sandefur, Vice President for Litigation at the Institute and one of the lawyers representing the taxpayers. “Rather than having the case go through the slower procedures for appeals, the Court announced that it will hear the case right away.”

The Court announced that it will hear arguments on April 20.

We argue that the initiative—which levies the largest tax increase in Arizona history—violates the state Constitution’s rules for adopting tax increases, because it did not receive a vote of two-thirds of elected lawmakers. The rule that tax increases must receive such a vote was added to the Constitution in the 1990s by a ballot initiative. The plaintiffs also argue that the initiative illegally overrides the Constitution’s limits on government spending.

“Proposition 208 requires the state to spend money on public schools beyond what the state Constitution allows,” Sandefur explained. “But you can’t override the Constitution except by a constitutional amendment, and Proposition 208 isn’t a constitutional amendment.”

The lawsuit points out that Arizona’s so-called Voter Protection Act makes it virtually impossible to repeal or amend a ballot initiative, which means that Prop. 208’s massive tax hike is essentially permanent. That makes it all the more important to decide whether the initiative is constitutional, said Sandefur.

A trial court judge ruled against the plaintiffs in February. They immediately appealed to the Arizona Court of Appeals, but simultaneously asked the Supreme Court to take the case right away. That request was granted in today’s order.

“It’s crucial that Arizona lawmakers have these legal questions resolved right away so that they know how to budget for the coming year,” Sandefur said. “And it’s crucial that Arizona taxpayers get these questions answered immediately. Imposing a tax increase in the middle of a recession—and one as extreme as Proposition 208, especially—poses a major threat to the state’s long-term economic viability.”

Learn more about the case here.