Arizona Supreme Court Rules Voter Referendums Cannot Repeal Tax Cuts Passed by Legislature

The Supreme Court of Arizona found 5–2 on Aug. 19 that a referendum backed by organized labor aimed at blocking a planned $2 billion per year state-level income tax cut violated the state constitution.

On April 21, the court overturned a lower court ruling allowing the referendum to move forward but had not explained the reasoning behind its decision until now.

A 2020 referendum to hike taxes on high earners and boost education spending was previously struck down by state courts.

The Arizona Constitution allows voters to prevent legislature-approved laws from taking effect by challenging them in a referendum. They have to collect the signatures of at least 5 percent of qualified voters to place the matter on the ballot.

But the state constitution provides that laws “for the support and maintenance of the departments of the state government and state institutions” cannot be put to a referendum. The Supreme Court of Arizona determined that the lower court was wrong when it ruled the tax cut could proceed to referendum because it did not appropriate money.

“We conclude the exemption from the referendum power for laws ‘for the support and maintenance of the departments of the state government and state institutions,’ Ariz. Const. art. 4, pt. 1, § 1(3), applies to tax revenue measures,” Justice John Lopez IV wrote in the state supreme court’s opinion (pdf).

“A revenue measure is exempt from referendum, regardless of the increase or decrease in revenue, provided it is for the support and maintenance of existing departments of the state government and state institutions,” Lopez wrote.

Invest in Arizona, a political action committee backed by a teachers’ union, had wanted to place a referendum question on the ballot in the upcoming Nov. 8 election in hopes of repealing an income tax reduction approved in 2021 by

*As an Amazon Associate I earn from qualifying purchases