Update: Flat tax referendum qualifies for 2022 ballot & the latest on Prop. 208 - AZEdNews
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Update: Flat tax referendum qualifies for 2022 ballot & the latest on Prop. 208

Raquel Mamani With Save Our Schools AZ Speaks At The Invest In Arizona Now Coalition Press Conference Where Volunteers Turned In 600 Boxes Of Petitions With Voters Signatures On Them In An Effort To Put The Flat Tax, Which Will Severely Impact Public Education Funding, On The Ballot For The 2022 Elections. Photo By Fatma Abid/ AZEdNews

Update Nov. 19, 2021: The Arizona Secretary of State’s Office said Friday that a coalition of education advocates‘ efforts to get the flat tax referendum on the ballot was successful.

Invest in Arizona gathered more than the 118,823 signatures necessary to block the flat tax from going into effect until Arizona voters decide the issue, now called Proposition 307, on the ballot in the 2022 general election.

Original story Nov. 16, 2021: What started as Prop. 208 before voters to increase education funding on the November 2020 ballot has turned into a complex legal battle between parents, teachers, and state legislators with no clear outcome yet.

If Prop. 208 did go into effect, it would bring about $800 million into public schools, according to Rebecca Gau, executive director of Stand for Children Arizona.

That revenue would benefit public education and help support teachers and classrooms in Arizona, which is ranked 49th in the nation for state education funding, according to a study done by WalletHub.

“I can tell you that my kids have never been in a fully funded school system since they were kindergarteners,” said Raquel Mamani, a board member for Save Our Schools Arizona, as well as a teacher and parent in Arizona public schools. “The Arizona State Constitution says that the state will provide a fully funded and quality education system for all.”

Here is a breakdown of everything that’s happened with Prop. 208 and the flat tax and what’s to come.

November 2020: During the election, Proposition 208 was put before voters on the ballot. Voters had to either vote yes in support of enacting a 3.5% surcharge on the existing 4.5% income tax on taxable annual income above $250,000 per individual and $500,000 per couple and distribute the revenue to support public K-12 education, or vote no to keep the income tax the same. Voters approved Prop. 208.

Following voter approval of the proposition, a lawsuit was filed challenging the constitutionality of the tax increase alleging it occurred outside the procedures prescribed in the state constitution and violated the state legislature’s power to appropriate tax revenue.

February 2021: Judge John Hannah Jr. rejected Arizona Senate President Karen Fann and other plaintiffs’ request for a preliminary injunction prohibiting the State of Arizona and its revenue collection and distribution agencies from enforcing Prop. 208, levying any surcharge or appropriating state general fund public monies to pay for the costs associated with Prop. 208.

June 2021: The Arizona Legislature approved a budget imposing a flat tax of 2.5% on nearly all incomes. Not only does this undo voter-approved Prop. 208, but also implements a tax cut since Arizona’s current tax brackets range from 2.59% to 4.5%. Senate Bill 1828 implements the flat tax crafted by Republican Legislative leadership in collaboration with Gov. Doug Ducey that would reduce state revenues by 25% and severely impact funding for public schools. Senate Bill 1783 would gut the 3.5% surcharge for public education in voter-approved Prop. 208.

July 2021: Advocates for Prop. 208 begin to collect signatures to halt the implementation of Senate Bill 1828 and Senate Bill 1783. If the Invest in Arizona Now coalition volunteers turn in enough signatures, the flat tax and its impact on Prop. 208 funding for schools and teachers could be paused until voters could decide the issues in measures on the 2022 ballot. To put each on the ballot, 118,823 valid voter signatures are required.

August 2021: The Arizona Supreme Court determined that since the money raised by Prop. 208 was derived from a tax increase, about $600 million of the estimated $827 million a year it was expected to raise for K-12 education funding is subject to constitutional spending limits, and could “far outpace (the) permissible spending” then it remanded the case back to a lower court to determine if Prop. 208 would exceed constitutional spending restrictions. Advocates continued to collect signatures.

September 2021: Advocates for Prop 208 and education funding turned in 215,000 signatures to get the measures on the ballot. The signatures will be counted and verified.

November 2021: Arizona Secretary of State Katie Hobbs told a Superior Court of Maricopa County judge that education advocates did not collect enough valid signatures to put Senate Bill 1783, which would have created a new tax bracket that let high-income earners avoid Prop. 208’s 3.5% surcharge, before voters on the 2022 ballot. However, the Arizona Supreme Court has indicated that Prop. 208 could be struck down if a lower court determines that the spending violates constitutional limits.

On Nov. 19, the Arizona Secretary of State’s Office said education advocates turned in enough signatures to put a flat tax referendum on the 2022 general election ballot so Arizonans can vote on whether to keep or repeal the flat tax in SB 1828. The ballot issue will be known as Proposition 307.

This also blocks the flat tax from going into effect until Arizona voters decide on Prop. 307 in the 2022 general election.

How it affects schools, parents, and students

This year especially, Arizona students experienced the strain of underfunding as schools transitioned from hybrid/virtual learning back to in-person instruction and the teacher shortage worsened.

“Students are coming to us not only with additional academic needs, but with serious mental health needs. Due to chronic underfunding, many Arizona schools share counselors and psychologists and other support across the district, and every school needs dedicated resources on their campus,” said Beth Lewis, director of  Save Our Schools Arizona.

“I see how hard the teachers are working. And I see teachers that don’t have construction paper, they don’t have glue sticks, they don’t have tissue,” Mamani said. “It feels like we’re crumbling a little bit, because the profession of teacher has not been respected, it’s actually been punished in this state to be a teacher.”

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Questions about Prop. 208, school bond, override elections? Find answers here
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What happens now?

The appeal for Prop 208 and the referendum was a tandem referral, meaning that two Senate Bills were being challenged.

The first one, that did not meet the requirement for signatures, was Senate Bill 1783, which let small businesses to limit state tax liability to 4.5% and gutted Prop. 208’s 3.5% surcharge on high earners.

County officials had a Nov. 15 deadline to validate signatures to get a referendum on Senate Bill 1828, which would reduce the four tax brackets in Arizona to two and reduce taxes to a flat rate, on the 2022 ballot.

If the required number of signatures are verified on the petitions education advocates submitted, the implementation of the flat tax could be put on hold until voters decide on the 2022 ballot measure.

During the Nov. 5 hearing in Maricopa County Superior Court, Plaintiffs’ and defendants’ attorneys met and identified four claims that present legal issues in a signature challenge case and agree that the signature case becomes moot depending on the court’s ruling in the referral on Senate Bill 1828.