Supreme Court says: You can't vote on that
The only redeeming feature of the court's explanation of why it booted the flat tax referendum from the ballot is Montgomery's originalist tour de force in dissent.
At the time the Arizona Supreme Court announced that it was tossing the referendum on the flat tax enacted by the Legislature from the ballot, I wrote that I pitied the justice who drew the short straw and had to write the full opinion explaining how a tax cut was an enactment “for the support and maintenance of the departments of the state government and state institutions.”
As it turns out, Justice John Lopez IV was the winner/loser. And the reasoning is as strained and unpersuasive as expected. The only saving grace of the enterprise is an originalist tour de force written in dissent by Bill Montgomery and joined by James Beene.
The Legislature enacted the flat tax. Opponents successfully gathered petitions to refer it to the ballot, preventing it from going into effect until voters had a chance to decide its fate directly.
The constitutional provision regarding the right of referendum has two relevant passages. The first identifies enactments not subject to referendum and includes the language cited above.
The second says that, to permit the exercise of the referendum right, enactments don’t go into effect until 90 days after the legislative session ends. The relevant exemption includes measures “to provide appropriations for the support and maintenance of the departments of the state and of state institutions.”
The majority opinion hangs its hat on the term “appropriations” not being included in the first passage regarding measures not subject to referendum.
It notes that in the first draft of the provision before the constitutional convention, the term “appropriations” was included in both passages. The majority opinion states that the reason for dropping it in the first passage wasn’t clear. Nevertheless, that was enough for the majority to proclaim that, since support and maintenance requires revenue, revenue measures are also exempt from referendum as a result of the first passage, irrespective of whether they are expected to increase or decrease tax collections.
Except, curiously enough, tax measures that are earmarked to fund new state agencies or programs. They, according to the majority opinion, are still subject to referendum. Good luck finding that distinction in the actual language in the state constitution.
Montgomery’s dissent reminds me of Clarence Thomas at his painstaking best.
The first Legislature after the constitution’s approval had to raise revenue to fund the new state government. And the tax collections needed to commence immediately. So, it adopted a series of revenue measures but did so by enacting them by a two-thirds vote as emergency measures, making use of another referendum exemption in the constitution.
According to Montgomery, this indicates that, at the time this constitutional provision was adopted, the right of referendum was regarded as including revenue measures. If they were per se exempt, there would have been no reason for the first Legislature to adopt them on an emergency basis.
According to the majority, the ambiguity about why “appropriations” was dropped in the first passage carries greater weight than the practice of those who took action under it contemporaneously, some of whom participated in its drafting.
Then there is this question: If revenue measures are exempt from being referred, why are they delayed from becoming effective for 90 days like measures that are subject to referendum?
Montgomery’s answer is straightforward and uncomplicated: revenue measures are delayed because they were intended to be subject to referendum.
Lopez’s speculation on this point is particularly strained and unpersuasive. Perhaps the framers were leaving time to litigate the question of whether a particular revenue measure was indeed for the support and maintenance of state departments and institutions. Perhaps it was to give time for those subject to the tax changes to adjust and accommodate.
You don’t need a law degree to ascertain whether Montgomery’s or Lopez’s rationale for the 90 day delay for revenue measures is the more plausible or produces a more coherent whole.
Now, to declare myself on policy, I like the flat tax and believe that taxation and spending require holistic considerations that can only be done by the Legislature, not through single-issue initiative and referendum ballot measures.
However, we were given a progressive state constitution, particularly with respect to the right of referendum. The best reading of the provision and its history is that the right of referendum includes revenue measures.
That right shouldn’t be so severely constricted based upon an admitted historical ambiguity.
Reach Robb at robtrobb.com.