Chamber Business News

An irresponsible attack on the judiciary

Proponents behind an ill-fated initiative to dramatically hike the state individual income tax rate on certain earners could use a dose of self-reflection. Instead, they’re lashing out at the state Supreme Court, which found their proposal so sloppily assembled that it didn’t meet the legal requirements to appear on the November ballot.

Directing their anger at an independent judiciary, a coequal branch of state government, is as wrong as it is radical.

The proponents were done in by their own corner-cutting, not because the judicial branch was aligned against them. Its author or authors, who still remain anonymous, made major errors that could have been avoided if they had applied greater thought and transparency.

RIFE WITH ERRORS

The pro-tax camp’s missteps were apparent from the word go. Proponents claimed their tax hike would only affect the very wealthy. But their drafting job rescinded an existing law that prevents taxpayers at all income levels from being bumped into higher tax brackets when their earnings don’t keep pace with inflation.

The impact on tax indexing didn’t come to light because the opposition campaign led by the Arizona Chamber of Commerce and Industry uncovered it, but because the non-partisan Legislative Council, the group of lawyers at the state Capitol responsible for drafting bills, discovered the goof. The non-partisan Joint Legislative Budget Committee agreed, as did the Department of Revenue, as well as a Superior Court judge who reviewed the Council’s analysis.

The proponents also claimed their plan would only increase taxes on high earners by 3.46 or 4.46 percent, depending on income. They would have been well served to have cracked open a junior-high math book. Moving our income tax rate from its current 4.54 percent to 8 percent or 9 percent would have meant actual increases of 76 percent or 98 percent. The proponents had erred again, describing their tax increase in percentage points, not percentages.

THE NECESSARY COURT CHALLENGE

We at the Chamber, and the opposition campaign committee we established, believed these issues necessitated a challenge in court.

After an evidentiary hearing in Maricopa County Superior Court, though, we didn’t make much progress. The judge disagreed with our arguments. Strongly. He ruled quickly that a description of the initiative that circulated with the petition voters signed was satisfactory, writing that the summary was “not fatally misleading.”

We were not happy. But the reaction of our campaign chairman, former State Superintendent of Public Instruction Jaime Molera, was measured, and we set about preparing our appeal.

Things changed at the state Supreme Court, which agreed with the case presented by attorney Kory Langhofer and ruled that the proponents’ failure to disclose the dismantling of the tax indexing law and their wild misstatement of the magnitude of their tax increase could have left petition signers confused over what they were actually signing onto. As a result, the Court ruled the initiative was not legally fit to appear on the ballot.

AN IRRESPONSIBLE ATTACK ON THE JUDICIARY

The proponents were—and are—upset. I don’t blame them. That’s a lot of work down the drain.

I take serious issue, however, with how they’ve chosen to vent their anger.

They carried out a protest in front of the Supreme Court building.

They’ve called for Justices Clint Bolick and John Pelander to be removed from the bench in this year’s judicial retention election, even though the written opinion has not yet been issued, we don’t know how each justice voted, nor do we know the vote margin of the decision.

These attacks on the judiciary are irresponsible and dangerous.

By all means, criticize our arguments. Offer a counter to the Court’s opinion rooted in sound legal reasoning and precedent. But to hurl wild accusations questioning the judges’ independence and integrity is an affront to our system of government.

We’re not in some legal backwater where the scales are forever tipped in favor of one side. I should know. The business community has lost in court plenty of times. In 2016, the Supreme Court heard our arguments on whether a minimum wage and paid leave measure should appear on the ballot. We were just as confident in our arguments then as we were in this year’s case.

But we lost. Big time. The same justices who currently occupy the Supreme Court ruled unanimously against us.

We weren’t happy with that 2016 decision, just as the pro-tax proponents aren’t happy today.

But we reacted responsibly. We didn’t call for the removal of justices or question their motives.

THE WRONG PROCESS AND PLAN

Not only was the secret drafting of Proposition 207 botched, but the entire premise was the wrong plan for Arizona. No mainstream education group supported it, while over 120 groups had already come out against it. The initiative would have damaged the economy greatly, instituting a small business tax that, according to research by economist Jim Rounds, would have affected 40,000 filers in the state. Its dismantling of tax indexing would have resulted in a $1.25 billion tax increase over 10 years on Arizona families. Most glaring, it would not have delivered on its promises to teachers, diluting the funds that should be going into the paychecks of the men and women leading our classrooms.

WE’RE COMMITTED TO CRAFTING THE RIGHT PLAN

We’re committed to developing the right plan. The process that led to the passage of Proposition 301 18 years ago gives us a model to replicate.

Just like we saw in 2000, we’ll need a broad coalition of the business community and the education community to come together on a plan that funds our education system from early childhood through university.

Unfortunately, there’s no sign the Proposition 207 proponents have any interest in reaching such a solution.

Glenn Hamer

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