Goldwater Institute, My Sister’s Closet file lawsuits challenging Prop 208

PHOENIX – The Goldwater Institute and My Sister’s Closet filed separate lawsuits on Monday aiming to challenge the constitutionality of Proposition 208, an approved statewide ballot initiative that will implement a new tax to help fund education in the state.

Phoenix-based think tank Goldwater Institute’s lawsuit, which was filed on behalf of taxpayers, legislators and small businesses, alleges Prop 208 is an unconstitutional tax increase that would devastate Arizona’s economy.

The Goldwater Institute previously estimated the economic loss could be upwards of 124,000 jobs and $2.4 billion in state and local tax revenues over the course of 10 years.

“Prop 208 slams the state’s middle-wage earners and small-business owners at a time when they can least afford it,” President and CEO of the Goldwater Institute Victor Riches said in a press release.

“Prop 208 violates the state Constitution, and it deprives the people’s elected representatives of their constitutional authority.”

According to court documents, the filing argues the proposition attempts to exempt itself from spending limits for school districts and the new source of funding does not cover all mandated appropriations.

The lawsuit also alleges the proposition violates the state’s constitutional requirement that any new tax can only be imposed by the legislature or by a two-thirds majority, which it did not achieve.

Arizona Senate President Karen Fann, Arizona House Speaker Russell “Rusty” Bowers and other high profile Arizona GOP leaders were among the plaintiffs named in the case.

Earlier this month, My Sister’s Closet CEO Ann Siner and retired Maricopa County Superior Court judge John Buttrick said they would file their own lawsuit against Prop 208 after the election was certified.

“Business owners are already suffering greatly because of COVID,” Siner said in a press release Monday. “Many are closing. Prop 208 will simply cause more businesses and their owners to leave Arizona.”

Prop 208, also known as the Invest in Ed initiative, will impose a 3.5% income tax surcharge on personal income for those who earn more than $250,000 and couples whose income exceeds $500,000 to fund education in Arizona.

According to the Arizona Secretary of State’s website, Prop 208 passed 51.75% to 48.25%, or by 113,171 votes.

The money collected from the tax will be distributed to school districts and charter schools hire and increase the salaries of teachers, nurses, counselors, classroom aides and bus drivers. Smaller portions of the funding will go toward expanding career and technical education programs for students as well as mentoring and retention programs for new teachers.

Arizona state officials certified the results of the 2020 election Monday morning, meaning the proposition will be enacted at the first of the year.

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