Arizonans are one step closer to being able to vote whether to repeal $1.9 billion of tax cuts that mainly benefit the wealthiest in the state.
Secretary of State Katie Hobbs said that a review of the nearly 220,000 signatures submitted by Invest in Arizona found that more than 118,823 were valid. That is the bare number needed to put the plan approved by the Republican-controlled legislature on hold until the November 2022 election.
At that point, it would appear on the ballot as Proposition 307 and voters would get to decide whether to ratify the plan or reject it.
All that, however, assumes that it gets that far.
Maricopa County Superior Court Judge Katherine Cooper is weighing arguments by the anti-tax Free Enterprise Club that the right of voters to get the last word on legislation does not extend to anything that affects state revenues. And attorney Kory Langhofer said it’s irrelevant that killing what the legislature approved would leave the state with more money than it needs.
But if it ever gets to the ballot, it will give Arizonans a chance to weigh in on whether to scrap the current system where tax rates — and, by extension — tax bills are based on net taxable income.
Under current law, for individuals earning up to $26,500 a year and couples earning $53,000, that rate is 2.59%. There are several interim steps before the tax tables top off at 4.5% for individual earnings of more than $159,000, double that for married couples.
SB1828 collapsed that into a flat 2.5% rate.
Gov. Doug Ducey has repeatedly sought to portray the measure as providing a tax cut of about $300 a year for the “average Arizonan.” But the details paint a different picture.
An analysis of the plan by legislative budget staffers put the savings for someone making between $35,000 and $50,000 at $11 a year. That increases to $96 for those in the $50,000 to $75,000 income range.
Bigger benefits kick in at higher income levels.
Taxpayers with incomes of between $250,000 and $5,000 would see an average $3,071 reduction in what they owe each year according to the staff analysis. That increases to more than $7,300 annually for those earning from $500,000 to $1 million.
Whatever Cooper rules on whether the tax cut measure can go to voters is likely to be appealed to the Supreme Court.
Ultimately, if the courts do not buy Langhofer’s argument that the tax cut plan is beyond the reach of voters, he has a grab-bag of what he said are other legal flaws with the petitions that could further reduce the number of valid signatures.
Among the allegations is that some paid circulators had not registered with the secretary of state, as required by law, or that they collected signatures before registering.
There also are claims that some of the registration forms are missing required information like providing a full address. And Langhofer also cited what he said are handwriting irregularities and missing dates or addresses of those who have signed the petitions.