Enforcing Constitutional Limits on Tax Cut Referendum

Arizona’s Constitution gives voters the power to hold a referendum to repeal a law adopted by the legislature. But there’s an exception: laws “for the support and maintenance of the departments of the state government” are not subject to referendum. That phrase refers not only to laws that spend money to maintain state agencies, but also to laws that raise money—that is, tax laws. The authors of Arizona’s Constitution included this limit on the referendum power after disastrous experiences in Oregon a century ago, when voters repeatedly voided taxing and appropriation bills in ways that caused havoc in state government.

But pro-tax forces in Arizona are now seeking to repeal a new state law that reduces income taxes on Arizonans. In 2021, lawmakers approved a new flat tax that simplifies and reduces taxes in the Grand Canyon State. That didn’t sit well with far-left special interest groups who believe government should take more of Arizonans’ hard-earned dollars. They therefore began the process to repeal the tax cut at a coming election.

In December, a trial court judge allowed those efforts to proceed, refusing to follow binding legal precedent that declares laws “for the support” of state government—including tax laws—exempt from the referendum process. That case has now been appealed to the state’s Supreme Court, and the Goldwater Institute filed a friend of the court brief urging the justices to invalidate the proposed referendum. Not only was the trial court required to follow existing law, but it’s simply common sense that any law imposing taxes—even if it imposes lower taxes than a previous law did—is a law “for the support” of state government.