Judge rejects 1 of many challenges to voter-approved Prop 208 tax

PHOENIX (AP) — A judge on Thursday rejected one of several constitutional challenges to a new voter-approved tax on the wealthy to fund education but put off deciding on several other legal arguments brought by opponents.

The challenge to a provision of Proposition 208 that opponents said limited the Legislature’s authority to adjust school funding failed because it only applies to schools themselves, Maricopa County Superior Court Judge John Hannah Jr. wrote in a ruling.

That provision says school districts must use the money provided by the tax to boost teacher and support staff pay and can’t use it to replace other funding.

The groups that sued — including the Republican leaders of the state Senate and House — argued that the section limited lawmakers’ budgeting and appropriation authority. Hannah said that wasn’t the case.

“Simply put, the ‘no supplant’ clause is directed at the school districts and charter schools that receive the Proposition 208 funds,” Hannah wrote. “It does not limit or affect what the legislature does with general fund revenues.”

Proposition 208, which voters passed in November, imposes a 3.5% tax surcharge on income above $250,000 for individuals or above $500,000 for couples. Supporters say it could raise about $940 million a year for schools, although the Legislature’s budget analysts estimate it will bring in $827 million a year.

The measure was an outgrowth of a 2018 teacher strike that resulted in educators getting a 20% pay raise over three years but fell short of their demands.

Those challenging the proposition had asked the judge to block it on several grounds while the case works its way through the courts, but Hannah said the provision he ruled on was the only pressing matter requiring an expedited decision. He promised to issue rulings on the remaining issues as soon as possible.

They include opponents’ claims that only the Legislature can impose a new tax because a constitutional amendment requires a two-thirds vote of the Legislature to impose a new tax.

Roopali Desai, an attorney who represents the groups that proposed the ballot measure and worked to defend it in court, said the judge’s ruling is significant for two main reasons: Hannah noted that courts are required to find laws constitutional if at all possible, and he said the right of residents to initiate laws and for those laws to have meaning is primary.

“This idea that if there’s a dispute between certain members of the Legislature, and they don’t like the fact that people are passing laws, that is not a dispute that the court is going to arbitrate,” Desai said. “That is not a constitutional claim — that’s you guys have a disagreement here.”

No matter what the judge rules, it’s the beginning of what is sure to be a lengthy legal process. Hannah’s initial rulings are likely to be appealed, and when those appeals are over, a full trial is expected on the remaining issues.