Who doesn’t want more money in their pocket? After a brutal year that featured COVID lockdowns, small businesses and families trying to make ends meet could certainly use some.
At the end of June, the state legislature passed a $1.8 billion tax cut, the single largest tax cut in Arizona history. And Governor Ducey didn’t waste any time before signing the budget, which shouldn’t come as a big surprise. As Senator Mesnard explained while voting in favor of the budget:
At the end of the day, when this passes, every single taxpayer in Arizona will get a cut. Every single one.
It was certainly a day worth celebrating. But not everyone joined the party.
Apparently, Invest in Arizona, a political committee sponsored by Arizona Education Association and Stand for Children, isn’t happy with the idea of every Arizona taxpayer receiving a cut. In an effort to block the historic tax cuts, the group filed three referendums that include components from three bills passed this legislative session:
- SB1828, which provides tax relief for all Arizonans and establishes a single income tax rate of 2.5%, subject to the attainment of certain general fund revenue thresholds.
- SB1827, which establishes a maximum income tax rate of 4.5%.
- SB1783, which provides the option to small business owners to file and pay their taxes as a small business.
But what Invest in Arizona doesn’t understand is that taxpayers like you deserve a break. And with Arizona sitting pretty thanks to a $4 billion surplus, the time is now. That’s why the Arizona Free Enterprise Club filed a lawsuit last month against Invest in Arizona’s tax cut referendums.
These three bills weren’t just historic tax cuts that benefit all Arizona taxpayers. They also directly provide for the support and maintenance of the state, were key aspects of the state’s budget, and therefore are not referrable by Invest in Arizona.
The Arizona Constitution even provides that legislative actions “for the support and maintenance of the departments of state government and state institutions” may not be the subject of a referendum. And as our complaint contends, these provisions “provide for, and directly relate to, the generation of revenues that are remitted to the general fund and appropriated to various agencies, departments and instrumentalities of the state government.” That means they are not referable.
It also means that Arizona Secretary of State Katie Hobbs, who is named in the lawsuit, must refuse to accept for filing, verification, or certification any petition in support of these three referendums.
Now, it’s up to the Maricopa County Superior Court to do what’s right by granting our motion for preliminary injunction and ultimately deciding in favor of every Arizona taxpayer.
This tax reform package wasn’t adopted by unelected bureaucrats. It was voted on and approved by 90 lawmakers who were duly elected by the people of Arizona. And the tax package was then signed by Governor Ducey, who was also duly elected by the people of Arizona.
Invest in Arizona may not like it, but the people have already spoken. And that means these historic tax cuts should be here to stay.
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