Prop. 132 proponents and opponents may want to switch sides

The measure may do more to deter tax cuts than tax increases.

Unintended consequences are common in politics and public policymaking. Sometimes they are difficult to discern in advance. Sometimes they are blindingly obvious.

In the case of Proposition 132, at least one of them is blindingly obvious.

Prop. 132 purports to be a constitutional amendment requiring that any future tax increases passed through initiative or referendum be approved by 60% of those voting, rather than the customary simple majority. In reality, it will do no such thing. Instead, if passed, it would ensure that any future proposal to increase taxes through the ballot box will take the form of a constitutional amendment, rather than a statutory initiative.

For a constitutional amendment, evading the 60% requirement is a simple drafting maneuver. Just state that the proposed amendment increasing taxes is to go into effect notwithstanding the provisions Prop. 132 would add to the state constitution. 

A later amendment supersedes a previous one. The courts aren’t going to find that Prop. 132 precludes voters approving exceptions to it. Or that the provisions of Prop. 132, unlike any other in the state constitution, are inviolate and not subject to change through the constitutional amendment process.

This will make increasing taxes through initiative slightly more difficult. More signatures are required to qualify a constitutional amendment than a statutory law. But any group looking to increase taxes at the ballot box will have enough financial firepower to meet the higher requirement. It will be more of an inconvenience and a diversion of resources than a real hurdle. 

It will also further junk up the Arizona Constitution. Our constitution is very different than the U.S. Constitution, a spare document largely limited to providing guiding principles and divisions of powers and responsibilities. The state constitution is already a junkyard of specific provisions more suited for the statute books. Making it a compendium of tax rates is a step in the wrong direction. 

There are some other things the drafters of Prop. 132 seem not to have thought through. 

The 60% requirement is “to approve a tax”. Presumably, given the folks supporting it, this is not intended to apply only to the establishment of a new tax but also to an increase in the rate of existing taxes.

But the language doesn’t limit itself to increases in taxes. If “tax” encompasses an increase in an existing rate, it would equally apply to a decrease in a rate. 

The 60% requirement “to approve a tax” applies to both initiatives and referendums. 

Now, let’s return to the legislative enactment of a 2.5% flat individual income tax rate. Opponents gathered sufficient signatures to refer it to the ballot.

The state Supreme Court, in a split decision, held that the tax rate reduction was exempt from being referred due to a constitutional exception for measures “for the support and maintenance of the departments of the state government and state institutions.” 

It was a dubious ruling. But here is a subsequent constitutional amendment, Prop. 132, dealing specifically with the vote necessary to pass a referendum “to approve a tax”. If enacted, hard for the court to continue to hold that taxes, increases or cuts, are still not subject to a referendum.

When a law is referred, enacting it requires voters to approve it. In a referendum, a yes vote upholds the law the legislature passed. A no vote rejects it.

If Prop. 132 is found to make explicit that tax measures are subject to referendum, and no other interpretation seems possible, then consider what that would have meant for the ballot box fight over the 2.5% flat tax. A yes vote would have been required to uphold the tax cut. But, under the provisions of Prop. 132, that would require 60% of voters to approve, not a simple majority. 

In other words, Prop. 132 may end up making it more difficult to cut taxes than the measure makes it more difficult to increase them. To increase taxes will just involve a simple drafting maneuver and collecting some more signatures. To cut taxes in the face of organized opposition may require getting the approval of 60% of voters rather than a simple majority.

If they think it through, the proponents and opponents of Prop. 132 may want to switch sides. 

Reach Robb at robtrobb@gmail.com.