(Disclosure: Rose Law Group represents Ann Siner of My Sister’s Closet and Judge John Buttrick in their litigation efforts against 208.)
By Rose Law Group Attorney David McDowell and Madelaine Braggs | Rose Law Group Reporter
The first ruling was issued Thursday, January 24th, in the legal challenge filed after the enactment of Proposition 208, which Rose Law Group attorneys argue is unconstitutional. The motion for temporary restraining order and preliminary relief, which would have prevented Prop 208 from taking effect until its constitutionality could be fully evaluated was denied in part, but much of the motion has yet to be ruled upon.
Maricopa County Superior Court Judge John Hannah only ruled on portions and much of the motion and most importantly the effect of the no-supplant clause, which says “Notwithstanding any other law, the additional monies received by school districts, charter schools and career technical education districts from the student support and safety fund established by section 15-1281 and the career training and workforce fund established by section 15-1282 are in addition to any other appropriation, transfer or allocation of public or private monies from any other source and may not supplant, replace or cause a reduction in other funding sources.” ARS 15-1284(E )
He won’t address this issue because the State is a defendant not a plaintiff – so there is no one in the case on the plaintiff’s side to raise this issue.
Related: Prop 208 Judge rejects 1 of many challenges to new education tax
The focus of Judge Hannah’s ruling was the interpretation of the “no-supplant” clause as a restriction on schools and not the legislature. He rejected the argument by the plaintiffs that the “no supplant” clause limits the legislature’s ability to reduce general fund allocations to school districts.
Judge Hannah said the clause had no effect on the legislature’s ability to allocate the general fund, instead it only constrained the school districts’ use of Prop 208 funds. He states that if the drafters of Prop 208 had intended to limit the legislature’s ability to allocate funds it would have said so. He found no language in the “no supplant” clause which bound the legislature because that clause only mentions schools.
He rejected the plaintiffs’ argument that permitting the state legislature to convene and begin its session without resolution of the constitutionality of Prop 208 constitutes harm to the Legislature. He rejected the argument that plaintiffs (as individual legislators) would be harmed if the legislature convened and incurred the “financial burden” of implementing the infrastructure that Prop 208 mandates.
Finally, Judge Hannah rejected the argument that collection of the tax from taxpayers prior to the determination of the constitutionality of the tax causes harm to the taxpayer. His ruling on this issue is based on two points; the first that a taxpayer can satisfy the prepayment obligation for tax year 2021 based on the taxpayer’s tax year 2020 liability and the taxpayer does not need to prepay what he/she expects to owe in 2021; secondly the Judge decided that he has no authority to issue an injunction to prevent collection of a tax.
This latter basis decision is based on a US Supreme court case deciding a similar issue.
