Will Of The People is urging voters to vote “no” on Propositions 128, 129, and 132 which are on the 2022 General Election ballot. But who is behind those efforts came under scrutiny this week upon the filing of the group’s latest campaign finance report.
The website for Will Of The People notes 20 percent of contributions are “coming from out of state,” although a recent political mailer reflects an out-of-state contribution rate of 43 percent. However, that rate could be as high as 99.9 percent based on the $324,959.44 the group received July 17 through Sept. 30.
It is the corporate contributions listed on group’s 2022 post-primary election (Q3) Schedule C4b which has garnered review, including 11 payments from Washington, D.C.-based The Fairness Project totaling more than $254,633. The other cash contributions came from Berkeley-based Every Single Vote ($70,000) and another D.C.-based donor, Ballot Initiative Strategy Center ($326.11).
Another $33 total in cash came from four individual contributors in Arizona, according to the PAC’s treasurer, Dacey Montoya.
The Fairness Project is funded in turn by the Service Employees International Union (SEIU), which is “dedicated to improving the lives of workers and their families and creating a more just and humane society” and has won praise from U.S. Secretary of Transportation Pete Buttigieg.
While Will Of The People is focused on Props 128, 129, and 132, SEIU is behind Healthcare Rising AZ, which supports efforts to amend Arizona statutes by adding restrictions to how medical debt can be collected. Healthcare Rising AZ recently received $15,000 in contributions from the Maricopa County Democratic Party and Arizona Democratic Party.
THE PROPOSITIONS:
Prop 128 would amend the Arizona Constitution to allow the state legislature to amend, divert funds from, or supersede an initiative or referendum measure enacted by the people of Arizona if the measure is found to contain illegal or unconstitutional language by the Arizona or United States Supreme Court.
Currently, state law prohibits legislators from correcting the illegal or unconstitutional language. A “yes” vote would amend the Constitution to allow such corrections, while the “no” vote advocated by Will Of The People would leave the restrictive prohibition in place.
Prop 129 would amend the Arizona Constitution to limit an initiative measure to a single subject and require that subject to be expressed in the title of the initiative measure. A “yes” vote supports the proposed amendment while a “no” vote shall have the effect of retaining existing law on initiative measures.
Prop 132 would amend the Arizona Constitution relating to initiative and referendum measures by requiring any initiative or referendum that seeks to approve a tax to receive at least 60 percent of the votes cast to become law. A “yes” vote is for amending the Constitution while a “no” voter leaves the existing law of 50 percent plus 1 in effect.
The Arizona Secretary of State’s Office announced last week that enough valid signatures were turned in to let voters decide next year whether they support substantially reduced income tax rates set to take effect in 2022 or want to maintain the current higher rates.
But whether voters can actually weigh in on such issues in the November 2022 General Election is something the Arizona Supreme Court will likely be asked to decide.
In June, Gov. Doug Ducey signed an overhaul of Arizona’s income tax system as part of the $12.8 billion budget packet approved by the Legislature. It changes the state’s current five-tier income tax rates -from 2.59 percent up to a 4.5 percent base- to a two-tier plan with lower rates in 2022.
The legislation which created the new tax structure could even trigger a single 2.5 percent tax rate as soon as 2023 if Arizona’s revenues meet certain levels.
The flat tax system also addresses the impacts of Prop 208, which voters narrowly passed last year. Known as the Invest in Education Act, Prop 208 imposed an additional 3.5 percent tax surcharge effective 2021 on any income above $250,000 for a single filers or $500,000 for joint filers. The surcharge is on top of the current 4.5 percent base rate.
The revenue from the surcharge is slated to be used for public K-12 schools, but it does so by kicking Arizona’s highest earners to an 8 percent income tax. This put businesses in the state at a competitive disadvantage with Texas and Nevada which have no income tax, while New Mexico has a top rate of 4.9 percent.
Because the 3.5 percent Prop 208 surcharge was put into law by voters, state lawmakers could not directly undo it. Instead, the new flat tax rate plan would top out at 4.5 percent by absorbing the 3.5 percent surcharge.
However, supporters of Invest in Ed, now known as Invest in Arizona, want to void the new tax rate law despite the fact all Arizonans would share in the projected $1 billion savings. The group is trying to kill the flat rate plan by utilizing a provision of the Arizona Constitution which gives citizens 90 days after the legislative sessions ends to attempt to refer new state laws for voter approval.
Last week Invest in Arizona successfully submitted enough valid petition signatures to get the matter on the ballot next November as Proposition 307. In response to the petition drive, Ducey’s spokesman has continued to champion the new income tax structure, which would ultimately be the lowest flat tax in the country if state revenue targets are met.
“It keeps Arizona competitive,” said C.J. Karamargin. “We are returning tax dollars to the citizens of Arizona.”
Whether new laws dealing with state revenues such as income taxes are eligible for voter referendum has never been ruled on by a state court.
A lawsuit by the Arizona Free Enterprise Club argues that the Arizona Constitution actually prohibits issues related to the support and maintenance of state government to be referred to the ballot. A decision by Judge Katherine Cooper of the Maricopa County Superior Court is expected any day.
Whichever side loses in Cooper’s court is expected to appeal, with the Arizona Supreme Court expected to hear the case eventually.
Another wrinkle in the tax saga is that the Arizona Supreme Court ruled earlier this year that Prop 208 can be challenged on the basis of the state’s constitutional spending limits for K-12 schools. The justices recently sent the matter back to the Maricopa County Superior Court for additional arguments although the case is expected to be back at the Arizona Supreme Court early next year.
