Maricopa County Superior Court Judge John Hannah rejected a request for preliminary injunctive relief in a lawsuit filed against Proposition 208. Proposition 208, approved by Arizona voters in 2020, provides for the largest tax increase in the state’s history to fund public education.
The Goldwater Institute filed the lawsuit on behalf of a coalition of Arizona taxpayers, legislators, and small business groups, challenging the legality of Prop 208, which they believe is “an unconstitutional billion-dollar tax increase that would be devastating to Arizona’s economy.”
The judge, who is married to a public school educator, dismissed the request calling plaintiffs’ argument for an injunction “too weak even to raise “serious questions” that might justify preliminary relief if the other factors weighed strongly in favor of it.”
Judge Hannah ruled that the plaintiff’s argument that they will “suffer irreparable harm if the courts do not immediately enjoin Proposition 208,” was “unpersuasive.” Hannah called their assertion that constitutional violations per se cause irreparable harm that weighs in favor of a preliminary injunction is too broad even as a summary of the federal cases cited in their papers.” Hannah called the potential injury “purely financial.”
“That the income tax surcharge will not cause “irreparable harm” in the near future is especially clear as to the taxpayer plaintiffs. Because Proposition 208 takes effect on January 1, 2021, the Department of Revenue will not begin to collect the income tax surcharge until April 15, 2022. That leaves plenty of time, before the tax takes effect, to litigate this case to final judgment,” wrote Hannah.
According to the Goldwater Institute, “a group of out-of-state unions and special interest groups placed Prop. 208 on the Arizona ballot to raise taxes by nearly $1 billion.”
At the time the organization filed the lawsuit, it claimed that Prop 2028 would “likely drive businesses out of the state and slow business growth.” Already, in towns and cities across the state, residents are reportedly leaving for low-tax states like Texas.
The plaintiffs intend to take the case all the way up to the Arizona Supreme Court if necessary.