Lawsuit argues that tax hike proponents again fail to disclose full size, scope of tax increase

Arizonans for Great Schools and a Strong Economy today filed a lawsuit in Maricopa County Superior Court arguing that proponents of an initiative to increase income taxes by 78% misled voters by failing to disclose the full size and scope of the plan’s tax increase.

“Just as they did in 2018, the tax increase proponents have failed to shoot straight with Arizona voters,” Arizonans for Great Schools and a Strong Economy Chairman Jaime Molera said. “Marketing their plan as a ‘surcharge’ attempts to withhold from voters the real impact of their scheme. If the proponents got their way, the top marginal tax rate would jump to 8%, nearly double the current top rate. The Supreme Court in 2018 and in previous cases has been unequivocal: a petition’s 100-word summary cannot confuse voters and a measure’s principal provisions must be clearly explained. Instead, the tax proponents have again attempted to hide the facts.

The argument also lays out the proponents’ failure to inform petition signers who would bear the brunt of the tax increase.

“It should have been disclosed to voters that this tax increase wallops small business,” Molera said. “Small businesses pay their taxes on the individual portion of the tax code. If signers would have known that the backbone of the Arizona economy gets clobbered by this proposal, then they might have thought twice before signing.”

The lawsuit also cites advertisements for petition circulators indicating the circulators would be paid based on the number of signatures they collect, a violation of Arizona law.

“The Arizona Legislature in 2017 passed a law that clearly banned the practice of paying petition circulators based on the number of signatures they collect, yet based on their own help-wanted ads, that’s exactly the payment model the proponents used in 2020,” Molera said. “Not only is their 100-word summary fatally flawed, but they’ve clearly violated state law when it comes to paying for signatures.”

Molera says he anticipates that the income tax hike measure will not appear on the November ballot.

“From early childhood to post-secondary, it is vitally important that our state’s policies and funding framework reflect education’s importance to the future of Arizona,” Molera said. “But this proposal the tax supporters are attempting to send to voters is not only poorly conceived and sloppily assembled, but it ignores the law. Arizona deserves better. As was the case two years ago, I anticipate that this year’s initiative won’t survive this legal challenge.”