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Court rules calling 1-cent tax initiative an ‘increase’ illegal

A Republican-controlled legislative committee illegally crafted a biased description of a proposed sales tax initiative in hopes of convincing voters to reject it, a judge ruled Thursday.

Maricopa County Superior Court Judge John Rea said there was nothing wrong with members of the Legislative Council describing Proposition 204 as a tax “increase.” He said that, in fact, it could easily be seen as a new 1-cent tax if passed.

But Rea said lawmakers failed to point out that there already is a 1-cent surcharge on the state’s 5.6 percent sales tax. That tax, approved by voters in 2010, is set to expire on May 31, 2013.

The judge said if lawmakers want to call it an increase, then they have to also explain to voters that Proposition 204 is crafted so as not to take effect until June 1, 2013. And what that means, he said, is there would be absolutely no change in the current tax rate if the measure is approved.

“By using the term `tax increase,’ the council has adopted one point of view that tends to discourage favorable votes,” Rea said. And that, he said, violates the legal requirement for the panel to craft an “impartial analysis” of each ballot measure.

The ruling is a significant victory for proponents of the measure because that analysis becomes part of a brochure mailed to the homes of every registered voter prior to the election. And it becomes a starting point for people to decide whether they like the measure or not.

In ordering the council to recraft the language, Rea did not spell out exactly what the description must say. But the judge did provide some direction on language he thinks would comply with the law.

“Describe the temporary tax that exists, that it would expire if the proposition is not passed, and the proposition will continue a temporary tax that would otherwise expire,” Rea said.

Thursday’s ruling is not the end of the legal battles.

Rey Torres, spokesman for House Republicans, said lawmakers intend to appeal to the Arizona Supreme Court. He said the GOP lawmakers disagree with Rea’s conclusion that the wording is misleading or biased.

Second, the state’s high court still has to decide whether Proposition 204 will be on the ballot at all.

Secretary of State Ken Bennett is arguing that initiative backers failed to comply with a requirement to prefile an exact copy of what they intended to circulate. While a different trial judge rejected Bennett’s contention, he has filed an appeal.

The initiative, if approved, would earmark most of the money received for K-12 education. It also has funds for road construction, university operations and scholarships, children’s health care and other social programs. The one-cent levy is expected to bring in about $1 billion initially.

In his decision Thursday, Rea also said the GOP-dominated council was wrong to point out in its analysis that the initiative does not have a definition of “residency.”

That is an issue because some of the proceeds from the levy are available for university scholarships for Arizona residents. That led Sen. Linda Gray, R-Glendale, a council member, to ask whether that would include students not in this country legally.

But attorney Jim Barton, who represents the initiative organizers, pointed out that a 2004 ballot measure specifically says that illegal immigrants cannot be considered “residents” for purposes of tuition in universities and community colleges. While they are not barred from those schools, they are required to pay the same higher tuition charged to out-of-state residents.

Rea said the issue of public funds being used to educate illegal immigrants is “highly controversial.”

He also said Proposition 204 “does not require the use of public funds for scholarships for illegal immigrants.” Rea said the legislative council purposely singled out the lack of definition of the word “resident” to attract “largely negative attention” to the ballot measure.

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