Arizona Supreme Court deals a blow to taxpayer rights

Phoenix—In a blow to taxpayer rights, the Arizona Supreme Court today upheld a 2013 law that funded expansion of the state’s Medicaid program without obtaining the two-thirds vote that the state Constitution requires of all revenue-raising measures.

Twenty-five years ago, Arizonans overwhelmingly voted to add the supermajority requirement to the state constitution by passing Proposition 108, which applies to any law that collects money for the state, whether by tax, fee, or assessment. That proposition included a narrow exception that allows administrators who are authorized to collect a fee or assessment to adjust the amount without having ask the legislature for permission again. Defenders of the Medicaid expansion law tried to argue that this exception allowed a bare majority to adopt the tax even though it got only a simple majority vote. Represented by the Goldwater Institute, thirty-six legislators who voted against the tax sued, arguing that their votes—which should have defeated the bill—had been effectively nullified. The state Supreme Court heard the case in late October.

The Institute argued that the “assessment” that the legislature used to fund the expanded Medicaid program was actually a tax, and should therefore have received the two-thirds vote. But the Court declared that it was not, holding instead that it was an “assessment” that is exempt from the two-thirds requirement. Proposition 108, the Justices declared, was intended to restrain the legislature, not to restrain administrative officials who charge assessments. But Christina Sandefur, executive vice president of the Goldwater Institute and the lawyer who argued the case, pointed out that this creates a dangerous loophole. “This decision allows the legislature to call taxes assessments and escape the two-thirds requirement,” Sandefur said. “Assessments are established by unelected, unaccountable bureaucrats. The voters who limited the legislature’s ability to raise taxes certainly didn’t intend to give even greater power to unelected officials to impose ‘assessments.’”

“This is a classic case of taxation without authorization,” said Sandefur.

Read more about Biggs v. Betlach here.

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About the Goldwater Institute

The Goldwater Institute drives results by working daily in courts, legislatures and communities to defend and strengthen the freedom guaranteed to all Americans in the constitutions of the United States and all 50 states. With the blessing of its namesake, the Goldwater Institute opened in 1988. Its early years focused on defending liberty in Barry Goldwater’s home state of Arizona.  Today, the Goldwater Institute is a national leader for constitutionally limited government respected by the left and right for its adherence to principle and real world impact. No less a liberal icon than the New York Times calls the Goldwater Institute a “watchdog for conservative ideals” that plays an “outsize role” in American political life.