Prop. 208 will harm Arizona. There will be little we can do to repair the damage if it passes

In 1996, the voters of Arizona passed an initiative measure legalizing the use of medical marijuana in the state. After receiving a 65% green light from voters, the state Legislature repealed the initiative. In a feat of democratic representation, the legislative action taken was rebuked at the polls in 1998 via a “veto referendum” (referred to as Proposition 300) which voided the Legislature’s amendments.

In response to what some viewed as legislative encroachment, Arizona voters carried Proposition 105 in 1998, also known as the Voter Protection Act. This proposition amended the state Constitution to put strict restrictions on the Legislature’s ability to amend or repeal voter-enacted measures. 

The Voter Protection Act also put restrictions on the governor’s ability to make changes to the ballot initiatives once enacted.

When looking at the upcoming election, it’s important to take this into consideration, especially when assessing Proposition 208, better known as the Invest in Education Act. 

Prop 208’s devastating consequences

As of 2020, the highest individual income tax used in Arizona was 4.5% on single filers reporting over $159,000 in income, and $318,000 for joint filers. Prop. 208 proposes an additional 3.5% on income tax filings above $250,000 for single filers and $500,000 for couples, resulting in a new 8% marginal tax rate. 

Proposition 208 affects Arizona small businesses that are organized as pass-through entities, such as sole-proprietorships, partnerships, LLCs, and S corporations. Taxes on these business’ profits are paid via the owner’s personal tax return. 

If Proposition 208 were to pass, it would disproportionately burden Arizona small businesses and deprive an economy in desperate need of oxygen. The Goldwater Institute, a leading Arizona public policy think tank, outlined some of the initiative’s disastrous consequences. Prop. 208 will cost Arizona:

• 124,000 jobs,
• $2.4 billion in local and state revenues,
• small business growth.

These policy worries aside, the utter lack of any possibility of recourse or amendment if Prop. 208 were to pass poses a larger risk yet. Voters and their elected representatives in government have little ability to change course should it pass, no matter its cost on Arizona workers, families, students, and teachers.

Voter Protection Act

Well intentioned, the Voter Protection Act now poses a threat of silencing voters, not protecting them.

Even more troubling, the language of Prop. 208 stipulates that any lost state revenue will result in cuts to other programs. Programs potentially on the chopping block include child protective services, public safety funding, and higher education spending.

Should Proposition 208 pass and negative unintended consequences result, voters won’t be able to work with their elected representatives to address those consequences. Arizonans will be stuck with a state budget that reflects the will of the out-of-state special interests bankrolling the proponents’ campaign, not the needs of the state.

While the Arizona initiative process had its shortcomings prior 1998, we must now look beyond 2020 to come together and stop approaching 21st-century governance with old tools.

Reforms should be considered to the Voter Protection Act. In the meantime, let’s come together and defend our state’s path to recovery. Let’s vote no on 208.

Diego Píña and Taylor Hersch are Junior Fellows at the Arizona Chamber Foundation.