Rep Andrew Tobin v. Hon Rea

SUPREME COURT OF ARIZONA

REP. ANDREW TOBIN, Chairman of ) Arizona Supreme Court
Legislative Council; SEN. STEVE ) No. CV-12-0273-SA
PIERCE, Co-Chairman of )
Legislative Council; SEN. ANDY ) Maricopa County
BIGGS, Member of Legislative ) Superior Court
Council; SEN. LINDA GRAY, Member ) No. CV2012-010912
of Legislative Council; SEN. )
LORI KLEIN, Member of )
Legislative Council; SEN. STEVE )
YARBROUGH, Member of Legislative ) O P I N I O N
Council; REP. STEVE COURT, )
Member of Legislative Council; )
REP. DEBBIE LESKO, Member of )
Legislative Council; and REP. )
STEVE MONTENEGRO, Member of )
Legislative Council, )
)
Petitioners, )
)
v. )
)
HONORABLE JOHN REA, JUDGE OF THE )
SUPERIOR COURT OF THE STATE OF )
ARIZONA, in and for the County )
of Maricopa, )
)
Respondent, )
)
QUALITY EDUCATION & JOBS )
SUPPORTING I-16-2012, a )
registered Arizona Political )
Committee, )
)
Real Party in Interest. )
__________________________________)

Special Action from the Superior Court in Maricopa County
The Honorable John Christian Rea, Judge

JURISDICTION ACCEPTED; RELIEF DENIED
________________________________________________________________
ARIZONA LEGISLATIVE COUNCIL Phoenix
By Michael E. Braun
Kenneth C. Behringer
Michele J. Hanigsberg
Patricia A. Probst
Anthony Tsontakis
Attorneys for Petitioners Andrew Tobin, Steve Pierce, Andy
Biggs, Linda Gray, Lori Klein, Steve Yarbrough, Steve Court,
Debbie Lesko, and Steve Montenegro

TORRES LAW GROUP, PLLC Phoenix
By James E. Barton II
Attorneys for Real Party in Interest Quality Education & Jobs
Supporting I-16-2012

PERKINS COIE LLP Phoenix
By Paul F. Eckstein
D. Andrew Gaona
Attorneys for Amicus Curiae We Build Arizona
________________________________________________________________

P E L A N D E R, Justice

¶1 Quality Education & Jobs Supporting I-16-2012 (“the

Committee”) challenged the Legislative Council’s analysis of

that initiative (“Proposition 204” or “the Act”), claiming that

the analysis was misleading and not impartial. The superior

court upheld that challenge in part and ordered the Council to

revise or delete the analysis in certain respects. The Council

then filed a petition for special action in this Court. On

August 17, 2012, we issued an order accepting jurisdiction but

denying relief, thereby upholding the superior court’s order.

This opinion explains our reasoning.1

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On November 6, 2012, the voters rejected Proposition
204. Ariz. Sec’y of State, State of Arizona Official

2
 I.

¶2 In a May 2010 special election, the people of Arizona

approved a tax measure designated as Proposition 100. That

proposition amended our state constitution to levy an

additional, temporary one percent sales tax “for the purpose of

raising state revenues for primary and secondary education,

health and human services and public safety.” Ariz. Const. art.

9, § 12.1(A) (2010); see id. Historical and Statutory Notes.

The temporary tax was imposed for three years and will

automatically expire on May 31, 2013. Id. § 12.1(B), (H).

¶3 In 2012, the Committee applied for and processed an

initiative for the stated purpose of “renew[ing] the one-cent

sales tax” to provide “dedicated funding” for various education,

public safety, and transportation-related matters. The

initiative’s sales tax and the resulting revenues would not be

subject to legislative reduction, revision, or fund sweeps. The

Committee collected approximately 290,000 signatures to qualify

the initiative to appear on the November 2012 general election

ballot as Proposition 204.

¶4 The Legislative Council then undertook its statutorily

required task of preparing an impartial analysis of the

initiative. See A.R.S. § 19-124(B) (2012). After receiving a

Canvas 18 (Dec. 3, 2012), available at
www.azsos.gov/election/2012/General/Canvass2012GE.pdf.

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draft from legislative staff, the Council publicly met and

considered the analysis. As amended and approved by the

Council, the two-page analysis contained as its first paragraph

the following:

Beginning June 1, 2013, Proposition [204]
would permanently increase the transaction
privilege tax and the use tax (“sales tax”) by
one cent per one dollar. The proposition
anticipates the tax increase to generate at least
one billion dollars. The monies collected from
the tax increase would be used for educational
programs, public transportation infrastructure
projects and human services programs as
summarized below. Proposition [204] also would
require the Legislature to annually increase
specific components of the school finance
formula. In addition, Proposition [204] would
provide that the specified funding levels for the
state’s kindergarten-through-twelfth-grade and
state university systems cannot be reduced below
the levels for fiscal year 2011-2012 or 2012-
2013, whichever is greater, that limits on school
district bonds and overrides cannot be below
those in effect for 2012, that vehicle license
tax and related highway user revenues cannot be
diverted for any other purpose and that the sales
tax base cannot be adjusted in a way that causes
the amount of sales tax collected to be less than
the amount collected in the prior year, plus six
per cent, unless there is a corresponding change
in the tax base that results in no reduction in
the amount of sales tax collected. The
Legislature would not have the ability to adjust
the new tax increase disbursements under any
circumstances.

¶5 In listing how Proposition 204 would annually

distribute the first billion dollars of “additional sales tax”

revenues, the Council’s analysis stated:

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 Fifty million dollars [would go] into the
“university scholarship, operations and
infrastructure fund”, to be distributed according
to rules adopted by the Board of Regents.
Between fifty and sixty per cent of the fund
monies must be used to provide university
scholarships to resident students based on
financial need or academic achievement, and the
remaining fund monies would be allocated to the
three state universities for operating and
infrastructure expenses based on performance in
meeting goals set by the Board of Regents. The
proposition fails to define who qualifies as a
“resident” for purposes of the scholarships.

¶6 The Committee filed a special action in superior court

to challenge portions of the Council’s analysis. Among other

things, the Committee alleged that the analysis was not

impartial because it (1) misleadingly and repeatedly stated that

the initiative would impose a “tax increase,” when the

initiative’s additional tax rate increment is identical to that

imposed under the existing temporary sales tax approved by

voters in 2010, and would take effect only when the existing tax

expires on May 31, 2013; (2) inaccurately stated that under the

initiative, “the sales tax base cannot be adjusted in a way that

causes the amount of sales tax collected to be less than the

amount collected in the prior year”; and (3) gratuitously

pointed out that the initiative fails to define who qualifies as

a “resident” for purposes of distributing university scholarship

monies.

¶7 After admitting stipulated exhibits into evidence and

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hearing oral argument, the superior court ruled in favor of the

Committee on the three points noted above. The court ordered

that those challenged portions of the analysis must be revised

or deleted. The Council’s special action in this Court

followed.

II.

¶8 Subject matter jurisdiction in this matter is

undisputed. See Ariz. Legislative Council v. Howe, 192 Ariz.

378, 382-83 ¶¶ 11-14, 965 P.2d 770, 774-75 (1998); Fairness &

Accountability in Ins. Reform v. Greene, 180 Ariz. 582, 586-90,

886 P.2d 1338, 1342-46 (1994). As for special action

jurisdiction, the Council’s petition raises purely legal issues

of statewide importance. See Cronin v. Sheldon, 195 Ariz. 531,

533 ¶ 2, 991 P.2d 231, 233 (1999) (citing such factors in

accepting jurisdiction of special action from a trial court

ruling). In addition, given the time constraints for

preparation, printing, and mailing of the Secretary of State’s

publicity pamphlet, see A.R.S. § 19-123 (2012), there is no

“equally plain, speedy, and adequate remedy by appeal,” Ariz. R.

P. Spec. Act. 1(a). Therefore, we accept jurisdiction of the

special action. See Ariz. R. P. Spec. Act. 1(a), 4(a), 7(b);

Howe, 192 Ariz. at 382 ¶ 10, 965 P.2d at 774.

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 III.

¶9 Under A.R.S. § 19-123(A)(4), the Secretary of State’s

publicity pamphlet, which is mailed to the households of all

registered voters before the general election, shall contain “a

legislative council analysis of the ballot proposal as

prescribed by section 19-124.” In pertinent part, § 19-124

provides:

Not later than sixty days preceding the regular
primary election the legislative council, after
providing reasonable opportunity for comments by
all legislators, shall prepare and file with the
secretary of state an impartial analysis of the
provisions of each ballot proposal of a measure
or proposed amendment. The analysis shall
include a description of the measure and shall be
written in clear and concise terms avoiding
technical terms wherever possible. The analysis
may contain background information, including the
effect of the measure on existing law, . . . if
the measure . . . is approved or rejected.

A.R.S. § 19-124(B) (emphasis added).

¶10 “[T]he purpose of the required analysis is to assist

voters in rationally assessing an initiative proposal by

providing a fair, neutral explanation of the proposal’s contents

and the changes it would make if adopted.” Greene, 180 Ariz. at

590, 886 P.2d at 1346. “It is not the Council’s function to

assist either side.” Howe, 192 Ariz. at 383 ¶ 13, 965 P.2d at

775. The Council’s objective, neutral role differs greatly from

that of a measure’s proponents and opponents, who will of course

“advocate with arguments that, needless to say, may be anything

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but neutral expositions.” Id.; see A.R.S. § 19-123(A)(3)

(providing that publicity pamphlet “shall contain . . .

arguments for and against the measure”); A.R.S. § 19-124(A)

(allowing persons to file with Secretary of State “argument[s]

advocating or opposing the measure”).

¶11 The Council correctly notes that substantial

compliance with § 19-124(B) is the standard, Greene, 180 Ariz.

at 589, 886 P.2d at 1345, and that the question is “whether

reasonable minds could conclude that the Council met the

requirements of the law, not whether we believe the judicial

system could itself devise a better analysis,” Howe, 192 Ariz.

at 383 ¶ 17, 965 P.2d at 775. But other principles set forth in

Greene, Howe, and more recent cases also guide our analysis.

¶12 In Greene, for example, this Court held that § 19-

124(B) “requires the legislative council to produce a neutral

explanation of initiative proposals, avoiding argument or

advocacy, and describing the meaning of the measure, the changes

it makes, and its effect if adopted.” 180 Ariz. at 591, 886

P.2d at 1347. “An impartial analysis and description,” we

further held, “requires the legislative council to eschew

advocacy and to adopt, instead, an evenhanded assessment that

neither omits, exaggerates, nor understates material provisions

of an initiative measure.” Id. at 593, 886 P.2d at 1349.

¶13 Likewise, the language used in the Legislative

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Council’s analysis “must be free from any misleading tendency,

whether of amplification, of omission, or of fallacy, and it

must not be tinged with partisan coloring.” Id. at 590, 886

P.2d at 1346 (quoting Plugge v. McCuen, 841 S.W.2d 139, 140

(Ark. 1992)); see also Citizens for Growth Mgmt. v. Groscost

(CGM), 199 Ariz. 71, 72 ¶ 4, 13 P.3d 1188, 1189 (2000) (same);

Howe, 192 Ariz. at 383 ¶ 13, 965 P.2d at 775 (same). Employing

“rhetorical strategy” in the crafting of wording of the

analysis, therefore, is not compatible with the statute’s

impartiality requirement. CGM, 199 Ariz. at 73 ¶ 6, 13 P.3d at

1190.

¶14 To obtain special action relief, the Council must

establish that the superior court’s ruling is arbitrary,

capricious, or an abuse of discretion. Ariz. R. P. Spec. Act.

3(c). Misapplication of law or legal principles constitutes an

abuse of discretion. City of Phoenix v. Geyler, 144 Ariz. 323,

328-29, 697 P.2d 1073, 1078-79 (1985). Because no evidentiary

hearing was held below, “we deal with an issue of law and thus

review the trial judge’s legal conclusions de novo.” Howe, 192

Ariz. at 383 ¶ 15, 965 P.2d at 775.

¶15 The legal question presented is whether the

Legislative Council produced “an impartial analysis of the

[initiative’s] provisions” and an accurate “description of the

measure,” as § 19-124(B) requires. We do not write on a blank

9
slate in this area of the law. In Greene and subsequent cases,

this Court has evaluated Legislative Council analyses of various

initiatives for compliance with § 19-124(B) and established the

guiding principles discussed above. Neither side has urged us

to overrule or deviate from those cases. In concluding that the

Legislative Council’s analysis did not comply with § 19-124(B)’s

requirements in three respects, the superior court, contrary to

the Council’s argument, properly adhered to our case law and

applied the correct legal standards. Based on those

authorities, we cannot say that the superior court erred in its

ruling.

IV.

¶16 Two of the Committee’s challenges, which the superior

court upheld, relate to the first paragraph of the Legislative

Council’s analysis. The first sentence of that paragraph

accurately stated that Proposition 204 “would permanently

increase the transaction privilege tax and the use tax (‘sales

tax’) by one cent per one dollar.” The paragraph then referred

three times to the “tax increase” that the initiative would

impose. The Council rejected a proposed amendment that would

have deleted the word “increase” and would have instead inserted

the following, new second sentence: “Currently, there is a

three-year temporary one-cent-per-dollar sales tax that will

expire on the date this permanent tax goes into effect.” The

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superior court found the phrase “tax increase,” absent some such

explanatory context, not impartial.

¶17 Though “fairly debatable,” as the superior court

remarked, the initiative’s proposed tax may fairly be described

as a “new” or additional “tax increase.” The Council’s use of

those phrases is neither inaccurate nor partial. Under current

law, the state sales tax rate on most business classifications

will be 5.6 percent of the tax base on June 1, 2013. A.R.S.

§ 42-5010(A)(1), (G) (2012). The initiative would impose an

additional one percent tax from that date forward, to raise the

rate to 6.6 percent. Contrary to the superior court’s

statement, Proposition 204 would not “continue a temporary tax

that would otherwise expire.” Rather, the initiative proposes

statutory changes that would impose a new, permanent, and

legislatively unalterable tax, the revenues of which would be

directed to different and broader uses than those under the

current, constitutionally-imposed temporary tax.

¶18 Nonetheless, by omitting that the initiative’s

proposed new tax increase is equivalent in amount to the

current, temporary tax increase and would take effect only when

the latter expires, the Council’s analysis is not completely

“free from any misleading tendency.” Greene, 180 Ariz. at 590,

886 P.2d at 1346. Without providing any such explanatory

context, the Council’s repeated reference to a “tax increase” in

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the first paragraph of the analysis “attempts to persuade the

reader at the very outset” that the initiative is contrary to

his or her financial interests. CGM, 199 Ariz. at 72 ¶ 6, 13

P.3d at 1189.

¶19 Although the Council is not statutorily required to

include “background information” in its analysis, A.R.S. § 19-

124(B), omission of significant contextual information may be

misleading and thus violate the statute, CGM, 199 Ariz. at 73

¶ 10, 13 P.3d at 1190; Healthy Ariz. Initiative PAC v. Groscost,

199 Ariz. 75, 77 ¶ 4, 13 P.3d 1192, 1194 (2000); Sotomayor v.

Burns, 199 Ariz. 81, 82 ¶¶ 4-5, 13 P.3d 1198, 1199 (2000).

Here, absent any such information about the timing and identical

amount of the existing, albeit temporary, sales tax vis-à-vis

the initiative’s proposed sales tax increase, the first

paragraph of the analysis is not “a completely neutral summary,

without advocacy or argument,” but rather “appears to be an

attempt to affect the outcome of the public vote.” CGM, 199

Ariz. at 73–74 ¶¶ 11, 13, 13 P.3d at 1190–91. Therefore, the

superior court did not err in ordering revision or deletion of

that paragraph.

¶20 We likewise find no error in the superior court’s

upholding the Committee’s challenge to a second aspect of that

same paragraph. Section 11 of the initiative proposes to add a

new statute, A.R.S. § 42-5029.02, which would include the

12
following subsection, in relevant part:

G. The tax base under this title shall not be
adjusted in any manner that causes a reduction to
the annual amount collected and distributed under
this section to be less than the amount that was
collected and distributed in the prior fiscal
year increased by six per cent unless the
reduction in the tax base is offset by a
corresponding change in the tax base that
effectively results either in no change in the
annual amount collected or an increase in the
amount collected.

(emphasis added). Subsections (A) through (C) of proposed § 42-

5029.02, in turn, refer to monies collected pursuant to two

other proposed new statutes, A.R.S. §§ 42-5010(H) and 42-

5155(E), both of which provide for the one percent additional

sales tax rate increment that the initiative would impose on

certain business classifications specified in § 42-5010(A)(1).

¶21 The first paragraph of the Council’s analysis,

however, states that

the sales tax base cannot be adjusted in a way
that causes the amount of sales tax collected to
be less than the amount collected in the prior
year, plus six per cent, unless there is a
corresponding change in the tax base that results
in no reduction in the amount of sales tax
collected.

The Council considered and rejected a proposed amendment that

would have added the phrase “applicable to the one-cent sales

tax” after the words “sales tax base.” In addition, and

particularly significant to us, the first sentence of the

Council’s analysis refers to “sales tax” as broadly meaning “the

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transaction privilege tax and the use tax,” without limiting it

to the additional one percent sales tax that the initiative

would impose.

¶22 The superior court ruled that the Council’s analysis

misleadingly suggested the Act would more broadly limit tax base

adjustments and impermissibly amounted to “rhetorical strategy

that tends to favor one side over the other.” Although the

issue is close, we agree.

¶23 Subsection (G) of proposed § 42-5029.02 is not a model

of clarity. But it does not prohibit any and all adjustments to

the sales tax base, as a whole, if the total amount of sales tax

collected is less than the amount collected in the prior year,

as the Council’s analysis suggests. Rather, subsection (G) only

limits changing the tax base in such a way as to cause a net

reduction in the taxes collected under § 42-5029.02, that is,

the initiative’s new one percent sales tax.

¶24 As the Committee points out, the initiative bars the

legislature from defunding the Act by manipulating the sales tax

base related to taxes collected under the Act, but explicitly

applies this restriction to only those taxes. Thus, changes

affecting the tax base of the transient lodging and mining

classifications, see A.R.S. § 42-5010(A)(2)–(3), business

classifications not listed in § 42-5010(A)(1), would not impact

the amount collected under proposed §§ 42-5010(H) or 42-5155(E)

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and therefore could be changed without requiring an offset.

¶25 Subsection (G), contrary to the Council’s analysis,

prescribes the relationship between the tax base under Title 42,

the tax code (“tax base”), and the amount collected and

distributed “under this section [§ 42-5029.02]” (“amount

collected”), meaning the one percent tax enacted by the

initiative. This provision forbids the legislature from

adjusting the tax base to effect a reduction in that amount

collected to be less than the amount collected and distributed

(under this section) plus six percent. The only exception is a

reduction in the tax base (under this Title) offset by a change

in the tax base (under this Title) that would either not change

the amount collected (under this section) or increase it.

¶26 The Council’s analysis instead describes subsection

(G) as meaning “the sales tax base cannot be adjusted in a way

that causes the amount of sales tax collected to be less than

the amount collected in the prior year, plus six per cent,

unless there is a corresponding change in the tax base that

results in no reduction in the amount of sales tax collected.”

The analysis suggests that the overall sales tax can never be

reduced, and total collections will need to be increased by six

percent each year. The provision says neither about the total

sales tax. By not modifying the phrase “the amount of sales tax

collected” to make clear that it applies only to the

15
initiative’s one percent tax, the analysis misleadingly suggests

that the legislature may never adjust the sales tax base or

reduce Arizona’s sales tax. Subsection (G), however, would not

affect the legislature’s power to reduce Arizona’s sales tax, as

long as the portion affected by the change in the sales tax base

is the 5.6 percent portion of the sales tax.

¶27 The Council’s analysis does not accurately explain, in

a neutral, evenhanded manner, the initiative’s qualified

limitation on adjustment of the sales tax base. Rather, the

analysis overstates that limitation and, therefore, tends to

mislead. Accordingly, the superior court did not err in

ordering revision of that portion of the analysis.

¶28 Finally, the superior court did not err in upholding

the Committee’s challenge to a third aspect of the analysis.

Section 4 of the initiative adds a new statute, A.R.S. § 15-

1642.01, which would funnel a portion of the new tax revenues to

scholarships for state university students. That new statute

directs the Arizona Board of Regents to establish a scholarship

fund, adopt rules to govern administration of the fund, and

annually allocate monies from the fund “to provide scholarships

to resident students based on financial need or academic

achievement.”

¶29 In its analysis of that provision, the Legislative

Council added a sentence that says, “The proposition fails to

16
define who qualifies as a ‘resident’ for purposes of the

scholarships.” The superior court upheld the Committee’s

challenge to that statement, finding it not impartial. The

court noted that the Council “singled out one undefined term for

emphasis,” even though many of the initiative’s other terms are

not defined, and “flag[ged]” a “highly controversial” issue by

suggesting that public funds might be used “for scholarships for

illegal immigrants,” when the initiative itself neither requires

nor suggests any such thing.

¶30 The Council correctly indicates that the challenged

statement is accurate and that the analysis does not mention

illegal immigration. But even accurate statements can be

misleading, argumentative, “tinged with partisan coloring,” or

otherwise lack the impartiality § 19-124(B) requires. Greene,

180 Ariz. at 590, 886 P.2d at 1346 (quoting Plugge, 841 S.W.2d

at 140).

¶31 The statement in question was added to the analysis

only when a Council member offered an amendment at the public

meeting. When the need for the amendment was questioned,

concerns were expressed that, absent a definition of “resident,”

confusion might exist on whether “illegal aliens” could receive

scholarships. The Council then adopted the amendment, including

the word “fails,” and rejected the following proposed wording

change: “The Act does not define resident student.”

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¶32 The initiative does not define many of its terms, such

as “school district,” “fiscal year,” “tax base adjustments,” and

“increase in the amount collected.” The Council’s analysis,

however, did not mention any of those definitional omissions.

Rather, the Council selectively emphasized that the initiative

does not define “resident” for student scholarship purposes and

referred to that omission as a “fail[ure],” thereby suggesting

that the initiative is flawed in that respect. The statement in

question also overlooks several Arizona statutes that, at least

implicitly, suggest that illegal immigrants would not qualify as

“resident students” for scholarship purposes. See A.R.S. § 15-

1626(A)(5) (2012) (directing Board of Regents to “differentiate”

between “residents” and other categories of university students

for purposes of setting tuition and fees); id. § 15-1803(B)

(providing that “a person who was not a citizen or legal

resident of the United States or who is without lawful

immigration status is not entitled to classification as an in-

state student pursuant to section 15-1802 or entitled to

classification as a county resident pursuant to section 15-

1802.01”).

¶33 The rather obvious purpose of the amended statement is

to inject the contentious topic of illegal immigration into an

already controversial tax measure and have voters infer from the

statement that new tax revenues could be used for illegitimate

18
scholarship purposes because the initiative “fails” to define

who qualifies as a “resident.” On its face, the statement is

true, but its inclusion and provocative phrasing belie

neutrality and impermissibly advocate against the measure. See

CGM, 199 Ariz. at 72 ¶ 6, 13 P.3d at 1189. The superior court

did not err in upholding the Committee’s challenge on this

point.

V.

¶34 When Legislative Council analyses are challenged under

§ 19-124(B), we must evaluate them for statutory compliance,

though we do so reluctantly and with reservation. As we have

previously said, “[n]o member of this court has any particular

fondness for these challenges.” Id. at 73 ¶ 12, 13 P.3d at

1190. Nor can we “settle each of these disputes; our function

is only to ensure that a challenged analysis is reasonably

impartial and fulfills the statutory requirements.” Howe, 192

Ariz. at 383 ¶ 17, 965 P.2d at 775.

¶35 Determinations of impartiality are not always easy or

clear-cut. Based on our existing case law, however, we cannot

say that the superior court erred in finding the Legislative

Council’s analysis noncompliant with § 19-124(B)’s impartiality

requirement in the three respects discussed above. We therefore

accept jurisdiction of the special action but deny relief.

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 ___________________________________
A. John Pelander, Justice

CONCURRING:

___________________________________
Scott Bales, Vice Chief Justice

___________________________________
Robert M. Brutinel, Justice

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