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Last step: AZ Supreme Court rules that legislators have standing to challenge illegal Medicaid tax
What happened to bring about this challenge?
Earlier this year, the state passed a Medicaid expansion program that levies an unconstitutional provider tax on Arizona taxpayers, to fund the program. Under Prop. 108 of the state constitution, bills that enact new taxes or increase taxes must receive two-thirds majority vote in both houses of the legislature. The state’s Medicaid expansion bill fell well short of this threshold. The Goldwater Institute is representing legislators whose votes against Medicaid expansion should have defeated the bill but were effectively nullified when the expansion bill became law without the constitutionally required two-thirds majority approval guaranteed by Prop 108, their constituents who were denied representation when their senators’ and representatives’ votes were not counted, and Arizona taxpayers who have been deprived of the protection of constitutional separation of powers.
Who are the clients?
- 9 state senators and 27 state representatives who voted against Medicaid expansion and would have defeated the provider tax under Prop. 108.
What are the key issues?
In 1992, Arizonans enacted a constitutional provision that shielded the state's taxpayers from one of the most widely abused government powers: the power tax. That provision, known as Prop 108, requires a two-thirds majority vote of both houses of the legislature to approve any new tax or increase an existing tax. Medicaid expansion and the provider tax that funds it, clearly increases the tax burden on Arizonans. However, Medicaid expansion passed both houses of the legislature with little more than a simple majority, falling well short of the constitutionally required two-thirds majority necessary to approve a new tax.
The current expansion bill also violates the separation-of-powers provisions by relinquishing the taxing power to the Arizona Health Care Cost Containment System Director, empowering him to set the amount and decide who will be exempt.
Proponents of Medicaid expansion have forsaken Arizona’s Constitution to foist upon Arizonans an expensive and unworkable federal program. Because Arizona courts have never squarely addressed these Prop 108 and delegation issues, the expansion bill could set a dangerous precedent that extends far beyond Medicaid expansion. The Goldwater Institute is representing Arizonans and their representatives who are asking the courts to preserve the democratic protections enshrined in Arizona’s Constitution.
Litigation Backgrounder (9/12/2013)
Response to Motion to Dismiss (10/16/2013)
Trial court ruling (2/5/2014)
Petition for Special Action (3/4/2014)
Reply in Support of Petition for Special Action (3/18/2014)
Court of Appeals special action ruling (4/22/2014)
Response/Cross Petition for Review (6/3/2014)
Response to Amicus Briefs (7/16/2014)
Supplemental Supreme Court Brief (9/16/2014)
Supreme Court ruling on Plaintiff's legal standing (12/31/2014)
New York Times: Arizona Supreme Court Allows Challenge to State's Medicaid Expansion
AP: Arizona Supreme Court Allows Medicaid Plan Lawsuit
Phoenix Business Journal: Arizona's Medicaid Expansion Tax Will be Challenged in Court
Capitol Media Services: Arizona Supreme Court Rules Against Brewer in Medicaid Case
Arizona Republic: Arizona High Court Allows Medicaid Challenge to Advance
Arizona Capitol Times: Supreme Court Hears Arguments on Medicaid Expansion
Courthouse News Service: Medicaid Plan Goes to Arizona Supreme Court
Arizona Republic: Arizona High Court Hearing Medicaid Suit
New York Times: Arizona Court Hears Arguments Over Medicaid
Arizona Capitol Times: Appeals Court Breathes New Life into Medicaid Challenge
Arizona Daily Star: Ruling: Arizona's Medicaid Expansion Law Can be Challenged
Arizona Republic op ed: Medicaid ruling: The Ends Don't Justify the Means
Arizona Republic op ed: The Real "Sore Losers" In Medicaid Tax Case
Clint Bolick is the Goldwater Institute’s litigation vice president. He has extensive success before trial judges and appellate courts. He has won two cases before the U.S. Supreme Court. He was named as a Lawyer of the Year in 2003 by American Lawyer magazine.
Kurt Altman is a senior attorney for the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation. Before joining the Institute, Altman operated a private litigation and appellate practice, focusing on criminal law in both state and federal courts. Previously, Altman spent a number of years as an Assistant U.S. Attorney for the District of Arizona, leading investigations and conducting trial in Federal District Court. As a member of the Department of Justice, Altman earned the Director’s Award, the highest honor bestowed upon Department of Justice lawyers, for his efforts in the first capital prosecution in Federal District Court for the District of Arizona. Additionally, he has twice received the Federal Bureau of Investigation Director’s Award for his tireless efforts on behalf of FBI-conducted investigations.
Christina Sandefur is a senior attorney at the Goldwater Institute, where she litigates cases advancing economic liberty, private property, free speech, and taxpayer rights. She is the lead attorney in the Institute's challenges to Obamacare and in Arizona's recent Medicaid tax. Sandefur is regularly cited as an expert in national media and has provided expert legal testimony to various legislative committees.