PHOENIX — Top legislative Republicans are asking the Arizona Supreme Court to finally kill off any chance that the wealthy will have to pay higher taxes to help fund education.
In new legal filings, GOP lawmakers and their business allies are telling the justices that Maricopa County Superior Court Judge John Hannah, who is handling the last elements of the legal challenge to Proposition 208, is dragging his feet in issuing a ruling.
Attorney Dominic Draye said there is no reason for that, saying there is no dispute about the facts and, to his way of thinking, that the tax levy is illegal.
With the deadline to adopt a state budget approaching, Draye told the justices they should immediately take the case back and issue a final ruling that the tax never can take effect.
Hanging in the balance is the 2020 initiative. Approved by voters, it imposes a 3.5% surcharge on the taxable income of individuals greater than $250,000 a year; the figure is $500,000 for married couples filing jointly.
A lawsuit filed after approval by Senate President Karen Fann, House Speaker Rusty Bowers along with the Arizona Free Enterprise Club challenged the legality of the measure.
Ultimately the Supreme Court upheld the right of voters to impose the levy.
The justices, however, said that the measure also needs to conform to a 1980 voter-approved measure that puts an aggregate spending cap on education. That figure is recalculated annually to account for inflation and student growth.
Specifically, the court said, tax cannot legally be imposed if the proceeds cannot be spent.
Only thing is, the justices said they could not immediately determine whether there is a way to collect the money and actually use it. They sent the case to Hannah to determine.
Draye acknowledged that there are differences in the estimates of how much Proposition 208 would bring in this coming budget year.
But he told the justices that, no matter whose figures are used, there is no legal way for schools to be able to legally use the money. And unless there is a final ruling — and soon — Draye said the cash will be taken from affected taxpayers and simply sit in an account where it cannot be spent.
In the meantime, he said, it has been six months since the Supreme Court sent the case to Hannah and two months since there was a stipulation that the funds that Proposition 208 would raise this coming year will exceed the cap.
“Still, the superior court has given no explanation for why it has not entered a permanent injunction,” Draye complained. He said that Invest in Arizona, which crafted the initiative, is now trying to raise issues unrelated to the central question of whether the Proposition 208 funds can or cannot be spent.
“Prompt resolution is needed so the legislative and executive branches will know where they stand and can take such action as they determine necessary relative to budgetary matters,” Draye told the justices. “None of this is news to the superior court.”
There was no immediate response from attorneys for Invest in Ed. It is now up to the justices to decide if they want to consider Draye's request or leave the case with Hannah.
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