AZ Supreme Court denies special action for Pima County v. Arizona Legislature

Back in June I posted that Pima County sues our lawless Tea-Publican Arizona Legislature:

lastgreatactofdefiancePima County sued the state Monday, claiming its new budget illegally forces millions of dollars in education spending onto county taxpayers.

The county’s request for special action in Arizona Supreme Court asks justices to undo the shift of more than $45 million in costs back to counties in Gov. Doug Ducey’s budget plan approved by the Legislature in March.

Howard Fischer reports today that the Arizona Supreme Court has denied special action jurisdiction, and this case will have to proceed as routine litigation, which could take months or years before it gets back to the Arizona Supreme Court on appeal. Court decision means higher Pima County taxes:

The Arizona Supreme Court will not block a new state law that will force Pima and Pinal counties to hike taxes on their own residents to make up for a budget-saving maneuver approved by lawmakers and the governor.

Without comment, the justices brushed aside a request by attorneys for Pima County that they immediately take up the question of the legality of the new law. Attorney Joe Kanefield had hoped for a quick — and final — resolution ahead of next month’s deadline for counties to set their property tax rates.

“Obviously, we took a chance,” he said Thursday of going directly to the state’s highest court. “That was the quickest way to resolve it with absolute finality.”

In refusing to take up the case now, the justices did not rule on the merits of Kanefield’s argument that the governor and lawmakers acted illegally. Instead, they said the case should go through the normal process like any other lawsuit, starting in Superior Court.

That process, however, could take months, if not longer. And whichever side loses is expected to appeal, meaning the issue ultimately will be before the justices

“It could take years before a final decision is reached,” Kanefield said.

But what all that means is the two counties affected will have to hike their taxes in the interim to meet the obligations of the law.

What’s worse, said Kanefield, is that the delay alone will cost Pima — and Pinal — taxpayers millions of dollars, even if the high court ultimately voids the law.

“Any relief will be strictly prospective,” he said, saying it will be “impossible” for counties to recover money already paid to school districts to make up for what the state is no longer funding.

“That money will be long gone, never again to be seen by the taxpayers who provided it,” Kanefield said.

There’s another cost being borne by Pima County taxpayers: The Supreme Court ordered the county to pay the legal fees incurred by the Attorney General’s Office in arguing the justices should reject the case.

Kanefield said the result is that Pima County taxpayers will have to find close to $18.4 million; for Pinal County the figure approaches $7.7 million.

Republican Pima County Supervisor Ray Carroll recently published this op-ed in the Arizona Daily Star. State legislators should understand what they’re voting for:

Based on his July 3 guest opinion, “Taxpayers across Arizona shouldn’t have to bail out Pima County,” I believe that first-term freshman state Rep. Vince Leach did not fully understand a series of budget bills passed at 3 a.m. on March 7. Legislators had only been given a few hours to study the bills before being asked to vote on the budget.

I fully understand the enormity of the task Gov. Doug Ducey and state legislators had before them this session. Arizona had a $600 million budget hole, and raising a tax to fill it was politically out of the question. Deep and painful spending cuts were required.

Except the Legislature found an easier route to $600 million than just spending cuts. The claim that legislators balanced the state budget without gimmicks is not quite true. They did use one big gimmick by passing on nearly $50 million in state costs to counties and municipalities with nearly $25 million of that tab sent to Pima County.

Passing the buck is not how I define fiscal conservatism!

Rep. Leach is correct that the state’s voters in 1980 tore a page out of the California property tax revolt of the 1970s and capped combined primary property taxes for residential homeowners at 1 percent.

But what he gets wrong is why the state has been picking up the bill when combined primary property taxes exceed 1 percent. The 1 percent cap had an unintended consequence — it harmed public school districts by shorting their funding.

That was not what the voters, or the Legislature, which had referred the measure to voters, intended. The very next year the Legislature solved the problem by making school districts whole by paying for the amounts over 1 percent. Every Legislature since 1981 has agreed to pay for the mistake.

Until this Legislature.

Rather than fix the problem of 35 years ago, the 2015 Legislature passed the cost for the error onto many counties, cities, community college districts and public schools all over the state.

This change in the law requires Pima County taxpayers to transfer their money to Tucson Unified School District even though more than half of them don’t live in the district. How Pima County comes up with the money — a tax increase or budget cut — is irrelevant. It’s forcing taxpayers in one jurisdiction to hand over money to another jurisdiction yet the taxpayers in the former have no say over how the money will be spent in the latter.

This whole scheme is not only wrong, I believe it’s unconstitutional. It’s taxation without representation. That’s why I supported the vote to sue the state and have this law overturned.

To justify his ducking of the state’s responsibility for paying for what it had previously always paid for, Rep. Leach in his guest column accurately quoted a May newsletter article from my good friends at the Arizona Tax Research Association about the problems associated with the 1 percent cap. But for some reason, he left out the most important part of the article:

“The last major study of Arizona’s tax system, the Citizens Finance Review Commission (CFRC) in 2005, recommended the elimination of the 1 percent cap. The CFRC correctly noted that the 1 percent cap frustrated almost every reform the commission considered. The CFRC states that the cap breaks the necessary link between the spending decisions of local governments and the residents’ willingness to fund that spending.

Nevertheless, regardless of what happens with Pima County’s lawsuit, the error of 1980 will remain. Therefore, I hope Rep. Leach will lead the way next session in referring to voters a constitutional amendment that solves this problem so the Legislature won’t have to resort to similar buck-passing gimmicks in the future.

Yet another ill-conceived anti-tax measure to be referred to the ballot in 2016 for repeal, instead of pissing away your tax dollars on litigation over actions by our lawless Tea-Publican Arizona legislature.

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