Education groups short on signatures in push for tax cut referendum

Education advocates did not collect enough valid signatures to give voters a chance to repeal a new state law exempting some business owners from a tax increase on the wealthy to boost school funding, a lawyer for Secretary of State Katie Hobbs said Friday.

The measure is one of two tax cut bills signed this year by Gov. Doug Ducey that school-funding advocates are trying to refer to the 2022 ballot. County election officials reviewing a sample of the 123,500 submitted signatures found too many were invalid. Petitioners needed 118,823 valid signatures.

The failure to collect enough signatures is not likely to matter much, however, because the Arizona Supreme Court has signaled that the entire tax increase, approved by voters last year as Proposition 208, is likely to be struck down.

In addition to the tax exemption for business owners, education groups want voters to have a say on a new flat income tax rate of 2.5%, which would cut taxes by about $2 billion a year, primarily benefiting the wealthy. They turned in significantly more signatures to refer that measure.

Lawyers for the Free Enterprise Club, a conservative advocacy group, argued in court Friday that the constitution does not allow referrals for measures that provide for "support and maintenance" of state government and that tax cut bills fall into that category.

Lawyers for the coalition of education groups, Invest in Arizona, said the constitution blocks a referendum only for tax-raising bills, not those that cut taxes.

Maricopa County Superior Court judge Katherine Cooper did not issue a ruling.

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