Groups Sue To Have Prop 211 Declared Unconstitutional

Groups Sue To Have Prop 211 Declared Unconstitutional

By Terri Jo Neff |

A civil rights lawsuit has been filed by two Arizona nonprofits in hopes of having the recently passed Voters’ Right To Know Act aka Proposition 211 declared unconstitutional.

The Arizona Free Enterprise Club (AFEC) and the Center for Arizona Policy have joined forces to seek a preliminary injunction barring implementation of Prop 211 while the case is litigated. The groups are represented by the Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute.

In announcing Thursday’s lawsuit, AFEC issued a statement which argues that Arizona voters “were misled into passing Prop 211” by supporters like former Arizona Attorney General Terry Goddard who railed against the vague threat of “dark money” in the state’s elections.

Prop 211 received more yes votes than no votes in all 15 counties, and easily passed by more than 1 million votes. But the plaintiffs insist the new law jeopardizes and interferes with the right of all Americans to freely support campaigns and causes in Arizona without being intimidated.

The Voters’ Right To Know Act requires all entities and persons spending more than $50,000 in “campaign media spending” on statewide campaigns (or $25,000 on other campaigns) excluding personal monies and business income to disclose the original donors of any contribution over $5,000.

The Act involves the disclosure of those donors’ names, mailing addresses, and occupations. It also requires disclosure of the identities of those donors’ employers.

“This is just another attempt to target, harass, and dox conservatives who won’t submit to the Left’s agenda,” the AFEC statement reads. “And if you don’t think this happens, think again.”

The statement notes the experiences of its own staff “who have received numerous phone calls and voicemails threatening violence—including one staff member whose car was vandalized for engaging in public communications on our behalf.”

As required by state law, the Plaintiffs were required to provide notice to the Arizona Attorney General, the Speaker of the Arizona House of Representatives, and the President of the Arizona Senate that they are seeking to have Prop 211 declared unconstitutional.

There is recent precedent for the legal arguments put forth by the Goldwater Institute for the plaintiffs. A U.S. Supreme Court decision last year in Americans for Prosperity v. Bonta struck down a similar law in California on the grounds that the First Amendment protects the freedom to anonymously support organizations and nonprofits.

A central theme of the Arizona lawsuit against Prop 211 is the guarantee in the state Constitution that citizens have the right to speak freely, a right even broader than what is guaranteed under the First Amendment of the U.S. Constitution.

The lawsuit notes the Arizona Constitution expressly guarantees that an individual’s “private affairs” will not be disturbed, particularly those that pertain to financial information and one’s choices when casting a ballot.

“Transparency is for government; privacy is for individuals,” the lawsuit argues.

Another problem with Prop 211, according to the lawsuit, is its definition of campaign media spending to include any public communication which “promotes, supports, attacks, or opposes” a candidate within six months of an election or “refers” to a candidate 90 days before a primary election.

That overly broad language means any article, blog, or social media post by groups like AFEC or Center for Arizona Policy about something as commonplace as a vote by a lawmaker could trigger compliance with the new law if that lawmaker is running for office or opts to soon after the communication.

“And if you think that by simply avoiding traditional campaign media spending (sending out a mailer, airing a TV commercial, etc.) will protect you from Prop 211, think again,” the AFEC statement notes. That is because the new law applies to all “research, design, production…or any other activity conducted in preparation for” a public communication about a candidate.

“Since writing articles and producing social media posts have a cost, we would have to calculate and regularly track how much staff time and office resources are used to produce these materials,” the statement notes.

Such an onerous level of accounting would force AFEC to drastically limit its public communications—even if a communications are not campaign related—“to avoid the absurd dragnet and complex regulatory labyrinth established by this Act,” the group noted.

Joining AFEC and Center for Arizona Policy as plaintiffs are “Plaintiff Doe I” and “Plaintiff Doe II,” both described as Arizona citizens and Maricopa County residents. The Doe plaintiffs allege that it is unconstitutional to require them to “reveal his or her identity when donating to charitable organizations that engage in public communications supporting issues and candidates” the two support.

Their lawsuit has been assigned to Judge John Hannah of the Maricopa County Superior Court. The defendants include Arizona Secretary of State Katie Hobbs as well as the Arizona Clean Elections Commission, its executive director, and its five commissioners.

It is the Clean Elections Commission which is tasked with establishing and interpreting the new standards outlined in Prop 211. The Commission has often been at odds with AFEC in past ballot initiatives and litigation, including one case in which the U.S. Supreme Court significantly reduced the Commission’s power.

Terri Jo Neff is a reporter for AZ Free News. Follow her latest on Twitter, or send her news tips here.

Relief Expressed As Radical Election Initiative Fails To Make The Ballot

Relief Expressed As Radical Election Initiative Fails To Make The Ballot

By Terri Jo Neff |

Arizona Free Enterprise Club (AFEC) is reveling in Friday’s Arizona Supreme Court ruling affirming that the attempt to get the Arizona Free and Fair Elections Act on the upcoming general election ballot as a voter initiative has failed.

“The ruling today vindicates what we knew all along: the radical Free and Fair election initiative lacked enough lawful signatures to qualify for the ballot,” AFEC President Scot Mussi said after the order was issued under Chief Justice Robert Brutinel’s name. “Arizona voters, the rule of law, and basic math were victorious today.”

What would have been known as Proposition 210 on the 2022 General Election ballot included numerous changes to state law drafted by the Arizona Democracy Resource Center (ADRC Action), such as a ban on legislative election audits and allowing election day voter registration.

AFEC took the lead in opposing the voter initiative, while some elections officials worried making that many hodge-podge changes to election and campaign finance laws at one time would have negative unintended consequences.

AFEC’s legal challenge alleged myriad problems with more than one-half of the 475,290 petition signatures submitted by ADRC Action. It ended with Brutinel’s order affirming Maricopa County Superior Court Judge Joseph Mikitish’s finding that the minimum 237,645 signature threshold was missed by 1,458 signatures.  

The outcome is exactly what AFEC’s Mussi predicted. In a series of statements Friday, Mussi called out ADRC Action for the “rigged methodology” the group’s attorneys pushed the courts to use when calculating the number of valid signatures. He said the mathematic gymnastics was intended “to sneak their disqualified measure onto the ballot.”

“Their dubious formula cherry picked data that boosted their numbers, even including signatures that were disqualified by the counties in the random sample,” Mussi said. “None of their formula was rooted in statute or historical precedent and was a Hail-Mary attempt to resuscitate thousands of signatures that simply should not have counted.”

The justices ordered Arizona Secretary of State Katie Hobbs to rescind the prior determination that the initiative had qualified for the ballot.

Advocacy Group Sues To Block Effort Which Could Overturn Arizona’s New Tax Structure

Advocacy Group Sues To Block Effort Which Could Overturn Arizona’s New Tax Structure

By Terri Jo Neff |

A lawsuit filed in Maricopa County Superior Court on Wednesday argues that efforts to have voters decide whether Arizona’s new flat-rate income tax and other tax law changes should go into effect are unconstitutional.   

The Arizona Free Enterprise Club (AFEC) is among the plaintiffs seeking a court order to bar the acceptance of petition signatures gathered by Invest In Arizona, a political committee sponsored by Arizona Education Association and Stand for Children – Arizona, which wants voters to overturn three revenue-related bills recently signed by Gov. Doug Ducey.

The problem with Invest in Arizona’s plan, the lawsuit argues, is that Article 4 of the Arizona Constitution prohibits referendums of legislation which deals with revenues and appropriations used for the “support and maintenance of the departments of state government and state institutions.”

AFEC is a nonprofit 501(c)(4) corporation organized and operated for the promotion of social welfare. It does so by engaging in public education and advocacy in support of free markets and economic growth in the State of Arizona.

Joining AFEC as plaintiffs in the lawsuit is the group’s executive director, Scott Mussi, as well as Diane Schafer, a registered voter from Yavapai County.

The legislation which Invest in Arizona wants to challenge via referendum are Senate Bills 1783, 1827, and 1828. The bills were passed near the end of the recent legislative session and then signed by Gov. Doug Ducey.

SB1828 amends Arizona’s current income tax brackets and tax rates and provides for a single income tax rate of 2.5 percent conditioned on certain general fund revenue thresholds. It was the cornerstone of Ducey’s budget package approved by the legislature earlier this month.

A companion bill, SB1827, ensures an individual taxpayer’s taxable income will not be subject to an overall marginal tax rate of more than 4.5 percent when a tax surcharge from Prop 208 (Invest In Ed) is considered.  Meanwhile, SB1783 allows certain small business owners to pay an alternative small business tax.

The legislation is slated to take effect 90 days after the governor affixed his signature. That 90-day window provides time for challengers to initiate a petition signing drive to take the matter out of lawmakers’ hands and put it before voters across the state via a referendum.

Getting a matter onto a ballot as a referendum requires valid petition signatures to be submitted to Arizona Secretary of State Katie Hobbs equal to five percent of the total votes cast in the last gubernatorial election. If that happens, then the new laws would remain on hold until voters have their say in a statewide election.

And that, according to AFEC, Mussi, and Schafer, should not be allowed to happen with SB1783, 1827, and 1828 because each deals directly with the generation of state revenue for funding Arizona’s state government and state institutions.  Their lawsuit asks a Maricopa County judge to bar Hobbs from accepting petition signatures for any of the three bills.

“The filing of petitions in support of the Proposed Referenda will injure the Plaintiffs and all Arizona taxpayers by unconstitutionally delaying the effective date of non- referrable laws duly enacted by the elected Legislature and approved by the Governor,” the lawsuit states.

The plaintiffs are represented by Thomas Basile of the Statecraft Law Firm. Basile says his clients are not against voter referendums in general and only initiated this legal action to ensure the Arizona Constitution is followed by Hobbs’ office.

“At the core of our case is that while the right of referendum is broad, it is not unlimited,” he told AZ Free News on Thursday. “The framers of our Constitution carved out certain categories exempt to referendum, such as in the case of tax reform and appropriations.”

Hobbs is named as a defendant in her official capacity as the state officer responsible for accepting or rejecting referendum petition sheets. Invest in Arizona is also named as a real party in interest.

Cook Derails House Republican Plans To Pass Budget Bills

Cook Derails House Republican Plans To Pass Budget Bills

By Terri Jo Neff |

Don’t count your chickens until they hatch. That age old adage came into play Monday for Speaker of the House Rusty Bowers when he was unable to secure a yes vote one of the 31 House Republicans, leading to the defeat of three budget bills before the speaker called it a day.

The 60-member House is now recessed until Thursday while budget negotiators are expected to regroup and figure out how to get Rep. David Cook on board with 11 budget bills which need to be passed by June 30 to avoid a state government shutdown.

Cook voted with every Democrat in the House, leading to the defeat the HB2899 and HB2900, which included a cornerstone piece of budget legislation to transition Arizona to a flat rate income tax. His no-vote also led to the defeat of HB2907, a vital transportation budget bill. All three votes died on a 30 to 30 vote.

A major concern is how to garner Cook’s support without renewing an earlier rift among nearly a dozen Republicans who last week were demanding major amendments be made to some of the budget bills. Their dissension led to an 11-day recess that only ended Monday when Bowers called everyone back to work.

It is unclear why Cook remained the only member of the House Republican Caucus to not support any of the bills or amendments put forth for vote Monday. And if Cook had a reason, he wasn’t publicly sharing it.

Others, however, had plenty to say about Cook’s votes, including the Arizona Free Enterprise Club (AFEC). In a tweet, the small business groups tweeted “Shame on Rep. David Cook” after he voted with Democrats to protect the Prop 208 tax hike on small business owners.

“If David Cook continues to carry the water for Red4Ed and the Unions, Arizona will remain one of the HIGHEST small business income tax states in the country!” the tweet read.

One longtime lobbyist quipped, “yep, not a good look to seem left of the Lefties.”

Even the Republican Liberty Caucus turned on Cook, stating he helped Democrats “block the tax cuts in the current budget proposal” even though Cook has been open for several weeks about his displeasure with the budget that came to the House and Senate with Gov. Doug Ducey’s blessing.

For AFEC’s president Scot Mussi, the original budget package included some concerning special interest tax incentives, which he described as giveaways benefiting a few select businesses and industries that were unnecessary and unpopular within the Republican majority in the House.

Yet Mussi believed those provisions would be removed via amendments on Monday so that all 31 Republicans would be on board. Instead, every amendment put forth for the three bills considered Monday were defeated, as were the bills themselves.

As Republicans attack Cook’s votes, others like Mussi are hopeful a compromise can be worked out, so that tax cuts and tax relief can get approved. That includes the plan to transition Arizona over three years to a flat rate income tax. And Mussi says don’t believe the arguments that the budget bills are simply designed for the rich, particularly with a flat rate tax plan.

It is important to note, Mussi explained, that the recent passage of Proposition 208 now has Arizona with the ninth highest small business tax rate in the country. And Arizona’s rate is higher than nearby Nevada, Utah, Colorado, New Mexico and Texas.

“The reality is that even after the tax cuts are implemented, high income earners will still be paying nearly twice as much (4.5%) as low and middle income households (2.5%),” he explained to AZ Free News. “Additionally, opponents of the tax plan leave out the fact that much of the tax relief will go to small business owners. This tax cut package makes Arizona competitive again for small business, something opponents to the plan would not like to see happen.”

Senator Skips Entire Day At Work Sending Budget Negotiators Scrambling

Senator Skips Entire Day At Work Sending Budget Negotiators Scrambling

By Terri Jo Neff |

Senate President Karen Fann will try one more time this week to pull together the 16 votes needed to pass the budget bills, something she could not do Wednesday when one of the 30 senators did not come to work.

The Republican-majority Senate stands in recess until 11 a.m. Thursday at which time several bills are scheduled to be considered, most of which are budget-related. There was hope Wednesday that the 16 Republicans would pass the bills, but Sen. Michelle Ugenti-Rita’s daylong absence quashed that option.

Fann and Majority Leader Sen. Rick Gray need the entire Senate Republican caucus on board, so if it appears the 16 votes are not a sure thing Thursday then Fann can simply recess her chamber until June 10, a plan put into place Wednesday night after House Speaker Rusty Bowyers chose to recess his chamber for several days.

In the meantime, the fate of the months-long negotiated spending budget, tax cuts, and plan to transition Arizona to a flat rate income tax remains uncertain, according to budget-watchers. And that may not bode well for the flat tax plan which Republicans have sought for years.

“Right now, the flat tax proposal is still being negotiated among members to address a couple of concerns,” according to Scot Mussi, head of the Arizona Free Enterprise Club. “The first concern is the alleged impact on cities and towns due to revenue sharing. Cities are arguing that the tax cut will result in a massive cut in shared revenue from the state.”

But Mussi pointed out that flat tax supporters, including AFEC, believe cities are enjoying budget surpluses -in some cities quite sizable surpluses- and continue to receive a large infusion of new revenue from the taxation of online remote sales.

“The second concern was that the proposed tax package included a tranche of special interest tax breaks, which groups like ours oppose,” Mussi said. “It is our understanding that most of these tax breaks, including one for low income housing and another for wealthy investors, will be removed from the plan.”

But Mussi says groups like AFEC continue to support this year’s budget plan -minus the special interest tax breaks.

“Currently, Arizona has one of the highest income tax rates in the nation and we are uncompetitive compared to our low tax neighbors. The proposed tax plan goes a long way toward addressing this problem,” he explained.

With uncertainty over whether Fann has the 16 votes in the Senate and House Speaker Rusty Bowyers has his 31 votes, Mussi says the budget negotiations are likely not over.

“There is still a lot of horse trading occurring, much of which will continue,” he said. “Some of the demands still being made related to the budget is to rein in some of the pork barrel spending, make tweaks to the tax plan to address concerns with the cities, and to address other policy issues such as election integrity and school choice.”

And what about Fann and Bowyers trying to poach support from a few Democrats if not all Republicans are on board soon?  Mussi believes the only budget bills Democrats may vote for would be the Education Budget which includes K-12 spending increases. But the legislative leaders are likely to have a hard time getting any further support across the aisle for the rest of the budget, Mussi said.