Arizona Taxpayers Score A Win As New Law Reforming Income Tax Rate Is Upheld

Arizona Taxpayers Score A Win As New Law Reforming Income Tax Rate Is Upheld

By Terri Jo Neff |

In a major victory for millions of Arizonans, the Arizona Free Enterprise Club has prevailed at the Arizona Supreme Court in its attempt to protect a forecasted $1.9 billion tax cut through changes signed into law last year to change Arizona from a four rate income tax structure to a single rate.  

On Thursday, the justices ruled in favor of a lawsuit filed the AFEC and several of its members who sought to ensure two provisions of Senate Bill 1828 related to the new 2.5 percent flat rate income structure goes into effect in January 2025. SB1828 was the omnibus appropriations bill signed into law by Gov. Doug Ducey in June 2021. 

The AFEC lawsuit was in response to an effort by the Arizona Education Association sponsored Invest In Arizona to have voters overturn those two provisions in November.

But key to the AFEC’s legal arguments is the Arizona Constitution, which prohibits voter referendums of legislative actions undertaken for “the support and maintenance of the departments of state government and state institutions.” Oral arguments were held at the Arizona Supreme Court on Tuesday, during which attorneys Kory Langhofer and Thomas Basile presented AFEC’s position.

On Thursday morning, Mussi took part in an interview with KFYI’s James T. Harris about the efforts to protect the forthcoming tax cuts due to changing to a 2.5 percent flat rate. Mussi told Harris that Tuesday’s arguments at the Arizona Supreme Court  “went well” and that he was optimistic “the justices generally understood what our argument was.”

Mussi did not realize how prescient his observation was, as just a few hours later the justices released their decision siding with AFEC and rejecting the referendum attempt.

The decision under the signature of Chief Justice Robert Brutinel enjoined the Invest In Arizona referendum effort from appearing on the 2022 General Election Ballot. In addition, the decision denied Invest In Arizona’s request for attorneys’ fees.

After the Court’s decision was announced, Mussi called it “a big win for taxpayers” across the state.

“The legislature passed historic tax cuts last year that benefit all Arizona taxpayers,” he added. “It’s time for Invest in Arizona and out-of-state special interest groups to accept this reality and stop making a farce of the referendum process.”

A detailed opinion explaining the legal conclusions made by the justices to form Thursday’s decision will be released in the next few weeks.

Hear Scot Mussi, President of the Arizona Free Enterprise Club, discuss the flat tax argument at the Arizona Supreme Court

Flagstaff Waives Land Use Law For Certain Property Owners

Flagstaff Waives Land Use Law For Certain Property Owners

By Corinne Murdock |

Flagstaff City Council voted last Tuesday to waive its land use restriction for property owners who submitted around $50 million in legal claims under the Arizona Private Property Rights Protection Act.

The Goldwater Institute submitted a demand letter on behalf of property owners in July. At the time, claims amounted to over $23 million for over 50 property owners.

Under the city’s High Occupancy Housing (HOH) Plan, residential and mixed-use properties faced restrictions such as a limit on the density and number of bedrooms and units, and additional requirements for automobile and bicycle parking standards. The HOH Plan would affect buildings with more than 75 bedrooms or 30 units per acre in dormitory or apartment-style units.

In part, the Private Property Rights Protection Act, or Prop 207, requires government to compensate property owners for any land use laws that restrict the right to “use, divide, sell, or possess” a property and thereby reduce its fair market value.

“If the existing rights to use, divide, sell or possess private real property are reduced by the enactment or applicability of any land use law enacted after the date the property is transferred to the owner and such action reduces the fair market value of the property the owner is entitled to just compensation from this state or the political subdivision of this state that enacted the land use law.

Under Prop 207, individuals that believe a land use law impacts their property’s fair market value must submit a demand letter to the government who enacted the law. The government must then choose to either compensate the property owner, waive the law for that property, or amend the law entirely.

Prop 207 also doubles down on private property protections within the state and federal constitutions, adding further measures to define and restrict eminent domain.

The Goldwater Institute confirmed with AZ Free News that even more property owners have contacted them about claims.

This Tuesday, the Flagstaff City Council discussed the HOH Plan again during a work session. A presentation on the subject noted that there were 87 Prop 207 claims in all, totaling over $50 million. In reviewing the plan, the presentation asked the council if it would like to maintain the plan, modify certain aspects of it, or scrap it entirely.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to