IN THE SUPREME COURT

STATE OF ARIZONA

JAIME MOLERA, et al.,

Plaintiffs/Appellees,

v.

KATIE HOBBS, et al.,

Defendants/Appellants,

and

INVEST IN EDUCATION,

Real Party in Interest,

Supreme Court

No. CV-20-0213-AP/EL

Maricopa County Superior Court

No. CV2020-007964

(Expedited Election Matter)

BRIEF OF AMICI CURIAE GOLDWATER INSTITUTE,

ARIZONA TAX RESEARCH ASSOCIATION, AND ARIZONA FREE

ENTERPRISE CLUB IN SUPPORT OF PLAINTIFFS/APPELLEES

Scharf-Norton Center for Constitutional Litigation

at the GOLDWATER INSTITUTE

Timothy Sandefur (033670)

Christina Sandefur (027983)

500 E. Coronado Rd.

Phoenix, AZ 85004

(602) 462-5000

Litigation@goldwaterinstitute.org

Attorneys for Amici Curiae Goldwater Institute,

Arizona Tax Research Association, and

Arizona Free Enterprise Club

i

Table of Contents

Table of Contents ..................................................................................................... i

Table of Authorities ................................................................................................. ii

IDENTITY AND INTEREST OF AMICI CURIAE ................................................ 1

INTRODUCTION AND SUMMARY OF ARGUMENT ...................................... 2

ARGUMENT ........................................................................................................... 4

I. Because the VPA makes the initiative process a one-way street, courts must ensure

that voters know exactly what they are voting on. ………....................................... 4

II. The dangers of “ballot box budgeting” warrant scrupulous enforcement of the

requirement for a truthful description of the Initiative’s principal provisions. …… 8

A. Ballot box budgeting is dangerous public policy. .................................... 8

B. The “Invest in Ed” initiative fatally fails to explain to voters that it ties their

legislators’ hands .................................................................................... 12

CONCLUSION ……………………..………...……..……………….……..…... 14

ii

Table of Authorities

Cases

Arizona Early Childhood Development & Health Board v. Brewer, 221 Ariz. 467

(2009) ...................................................................................................................... 6

Cave Creek Unified Sch. Dist. v. Ducey, 233 Ariz. 1 (2013) ............. 2, 7, 10, 11, 12

Cottonwood Dev. v. Foothills Area Coal. of Tucson, Inc., 134 Ariz. 46 (1982) ....... 8

Leach v. Reagan, 245 Ariz. 430 (2018) ..................................................................... 1

Meyer v. State, 246 Ariz. 188 (App. 2019) ..........................................................7, 12

Molera v. Reagan, 245 Ariz. 291 (2018) .............................................. 1, 2, 5, 12, 14

Newton v. Mahoning Cnty. Comm’rs, 100 U.S. 548 (1879) ...................................... 7

Reinhold v. Bd. of Supervisors, 139 Ariz. 227 (App. 1984) ....................................14

State ex rel. Ariz. Dep’t of Revenue v. Capitol Castings, Inc., 207 Ariz. 445 (2004)

................................................................................................................................. 1

United States v. Carolene Prod. Co., 304 U.S. 144 (1938) ....................................... 7

Vangilder v. Ariz. Dep’t. of Revenue, No. CV-20-0040-PR (pending) ..................... 1

Statutes

Proposed A.R.S. § 15-1284(E) ..................................................................... 3, 12, 13

Other Authorities

Arizona Free Enterprise Club, Current AZ Budget Surplus Built on Tax Increases,

Jan. 7, 2020 ...........................................................................................................13

iii

California School Boards Association, Governor Signs 2020–21 Budget Package,

June 30, 2020 ........................................................................................................10

Conover, Budget Picture Not Clear Ahead in Arizona, NPR, Aug. 3, 2020 ...........13

Gartner, Arizona State Legislature v. Arizona Independent Redistricting

Commission and the Future of Redistricting Reform, 51 Ariz. St. L.J. 551 (2019)

................................................................................................................................. 5

Gordon, et al., Fiscal Democracy in the States 39 (Urban Institute, July 2019) ....... 9

Joffe & Ring, California’s State and Local Liabilities Total $1.5 Trillion,

California Policy Center, Jan. 3, 2019 .................................................................... 9

Klapper, The Falcon Cannot Hear the Falconer: How California’s Initiative

Process Is Creating an Untenable Constitution, 48 Loy. L.A. L. Rev. 755 (2015)

.................................................................................................................... 3, 6, 8, 9

Levinson & Stern, Ballot Box Budgeting in California: The Bane of the Golden

State or an Overstated Problem?, 37 Hastings Const. L.Q. 689 (2010) ....... 2, 8, 9

McClory, Understanding the Arizona Constitution (2001) .....................................11

Neuborne, The Supreme Court and Free Speech: Love and A Question, 42 St.

Louis U. L.J. 789 (1998) ......................................................................................... 2

Randazzo, Clean-Energy Ballot Measure Prop. 127 Now the Most Expensive in

Arizona History, Arizona Republic, Oct. 16, 2018 ..............................................11

Schrag, Paradise Lost: California’s Experience, America’s Future (1999) .. 8, 9, 10

U.S. Census Bureau, 2018 Annual Survey of State Government Finances ............... 9

Constitutional Provisions

Ariz. Const. art. IV, pt. 1 § 1(6)(B), (C) & (D) ......................................................... 2

iv

Ariz. Const. art. IV, pt. 1 § 1(6)(C)......................................................................6, 12

Cal. Const. art. II § 10(c) ........................................................................................... 2

1

IDENTITY AND INTEREST OF AMICI CURIAE

The Goldwater Institute was established in 1988 as a nonpartisan public

policy and research foundation dedicated to advancing the principles of limited

government and economic freedom through research, advocacy, and litigation.

Through its Scharf-Norton Center for Constitutional Litigation, the Institute

litigates and files amicus briefs when its or its clients’ objectives are implicated.

The Institute seeks to enforce provisions of Arizona’s Constitution that protect the

rights of taxpayers and voters. See, e.g., Molera v. Reagan, 245 Ariz. 291 (2018);

Leach v. Reagan, 245 Ariz. 430 (2018).

The Arizona Tax Research Association (“ATRA”) is a taxpayer organization

representing a cross-section of Arizona individuals and businesses. ATRA’s

mission is to ensure the efficient use of tax dollars through sound fiscal policies by

critically examining governmental activities and expenditures related to taxation

policy. It has appeared as amicus in this Court in important cases involving state

and local taxing powers. See, e.g., Vangilder v. Ariz. Dep’t. of Revenue, No. CV-

20-0040-PR (pending); State ex rel. Ariz. Dep’t of Revenue v. Capitol Castings,

Inc., 207 Ariz. 445 (2004).

The Arizona Free Enterprise Club (“AFEC”) is an Arizona organization

dedicated to advancing pro-growth, limited government policies that promote

economic freedom and a prosperous Arizona economy. For over a decade, the

2

AFEC has advocated for taxpayers by opposing the abuse of tax laws by special

interest groups, and supporting the need for a reduced tax burden on Arizona

citizens. AFEC has appeared as amicus in this Court in important cases involving

the rights of taxpayers. See, e.g., Molera, supra; Cave Creek Unified Sch. Dist. v.

Ducey, 233 Ariz. 1 (2013).

INTRODUCTION AND SUMMARY OF ARGUMENT

Arizona law is unique in an important respect relevant to this case: the so-

called Voter Protection Act (VPA), which stringently limits the ability of the

people, through their elected representatives, to repeal, amend, or even fix an error

in an initiative after it has been adopted. Ariz. Const. art. IV, pt. 1 § 1(6)(B), (C),

& (D). The only other state that makes initiatives essentially a one-way street is

California. See Cal. Const. art. II § 10(c). This fundamentally undemocratic

feature of initiatives—which might be called “[o]ne-person, one-vote, one-time,”

Neuborne, The Supreme Court and Free Speech: Love and A Question, 42 St.

Louis U. L.J. 789, 793 n.22 (1998)—is strong reason for courts to painstakingly

enforce the requirement that an initiative’s 100-word summary accurately covers

all principal provisions before that matter may be put before the voters. Molera v.

Reagan, 245 Ariz. 291, 298 ¶ 28 (Ariz. 2018).

The need for such vigilance is even more pressing where, as in this case, the

initiative is an exercise in “ballot box budgeting.” Levinson & Stern, Ballot Box

3

Budgeting in California: The Bane of the Golden State or an Overstated Problem?,

37 Hastings Const. L.Q. 689 (2010). Ballot box budgeting short-circuits the

legislative process through which consensus, deliberation, agreement, and

compromise are normally reached. Klapper, The Falcon Cannot Hear the

Falconer: How California’s Initiative Process Is Creating an Untenable

Constitution, 48 Loy. L.A. L. Rev. 755, 800–03 (2015). And ballot box budgeting

can wreak havoc on a representative system by tying up revenue streams,

compelling expenditures, and imposing the will of today’s majority on state

financial policies in ways that deprive future majorities of their capacity to respond

to changed circumstances. This has already happened in California, and it is

imperative that it not happen here.

In this case, the provision of the Initiative called the “Supplant Clause,”1 is

not only a principal provision, but—particularly when combined with the VPA—

would take the extreme step of depriving legislators of authority to change

budgetary priorities even in light of emergencies such as the ongoing pandemic.

This Clause would not only bar the legislature from reducing disbursements or

shifting resources in light of new needs, but would, thanks to the VPA, make this

1 Proposed A.R.S. § 15-1284(E).

4

prohibition virtually permanent—which means the Clause is a “principal”

provision that must be addressed in the 100-word summary.

On a gut level, it might seem unfair to require that initiative proponents

account for every principal provision in only 100 words. But there is a readily

available alternative: the ordinary legislative process whereby stakeholders can

deliberate, compromise, and weigh the costs and benefits of proposed legislation.

If voters choose to avoid that process, and detour around the checks and balances

and democratic deliberation that would normally apply, it is only reasonable to

demand that they candidly disclose the extreme consequences of their proposals.

ARGUMENT

I. Because the VPA makes the initiative process a one-way street, courts

must ensure that voters know exactly what they are voting on.

Procedural requirements for ballot initiatives exist to ensure that voters are

fully informed about the consequences of their decisions. This is important in any

event, but in Arizona it is especially crucial, thanks to the VPA. Where other laws

can be fixed, changed, or repealed, the VPA requires an extreme supermajority

(3/4) of the legislature to make even technical fixes to an initiative, and it entirely

prohibits any amendment that does not “further [the] purpose” of the initiative, or

5

any repeal except by a subsequent initiative.2 In effect, this gives all initiatives—

including statutory ones—a kind of super-statutory or para-constitutional status.

Even inadvertent errors in an initiative cannot be fixed as they can be in ordinary

statutes.

As this Court observed in the last case involving these parties, the VPA’s

entrenchment feature “greatly circumscribe[s]” the legislature’s ability to fix or

change an initiative, which makes it imperative that ballot measures “comply with

applicable requirements,” even where those requirements might seem nit-picky.

Molera, 245 Ariz. at 298 ¶ 28, 294 ¶ 11.

A legislatively-created statute is subject to a complicated process before it

can be adopted. It must go through multiple layers of Legislative Council analysis,

committee hearings, public deliberation, stakeholder meetings, and gubernatorial

review. All of this can be frustrating sometimes, to those whose desired measures

fail for one reason or another. An initiative, by contrast, “does not go through the

same mechanisms of hearings, committee studies, amendments, and compromises

2 As a result, disputes over initiatives are more likely to end up in court instead of

being resolved by the legislative process. See, e.g., Gartner, Arizona State

Legislature v. Arizona Independent Redistricting Commission and the Future of

Redistricting Reform, 51 Ariz. St. L.J. 551, 558 (2019) (“The [VPA] largely

explains why the Arizona State Legislature v. Arizona Independent Redistricting

Commission case was brought to the United States Supreme Court rather than

resolved through ordinary state legislative processes.”).

6

that constitute the safeguards of a diverse, deliberative legislature.” Klapper, supra

at 803. That may seem attractive, since it appears to avoid so-called gridlock. But

the downside is that it can fail to obtain the consensus or technical vetting that the

legislative process ensures, and can wreak havoc on a future legislature’s ability to

set taxing and spending priorities in a rational and equitable way.

These factors alone make it fair to require that initiative proponents, in

exchange for detouring around the legislative process, be absolutely candid with

voters about the contents of proposed legislation.

But even more significant is Arizona’s VPA, which “altered the balance of

power between the electorate and the legislature,” Arizona Early Childhood

Development & Health Board v. Brewer, 221 Ariz. 467, 469 ¶ 7 (2009), in ways

that make the initiative process an even riskier prospect for the rights of citizens.

The VPA not only bars the legislature from repealing initiatives (even mere

statutes), but also forbids elected representatives from amending an initiative

“unless the amending legislation furthers the purposes of such measure.” Ariz.

Const. Pt. 1, art. IV § 1(6)(C). This essentially forbids the people from changing

their minds through their elected representatives, no matter how old and obsolete

an initiative might be, and regardless of the urgency of the state’s need to change

course.

7

More, in fact: the VPA prohibits legislation that impliedly repeals or amends

an adopted initiative “through ‘repugnancy’ or ‘inconsistency.’” Meyer v. State,

246 Ariz. 188, 192 ¶11 (App. 2019) (citations omitted). Even where the legislature

enacts a law that does not actually alter or change an initiative, that law can still be

deemed a violation of the VPA if it “‘in substance alters, modifies, or adds to’” the

initiative. Id. (quoting Cave Creek Unified Sch. Dist. v. Ducey, 233 Ariz. 1, 7 ¶24

(2013)).

Courts have long regarded “legislation which restricts those political

processes which can ordinarily be expected to bring about repeal of undesirable

legislation” as dangerously undemocratic, and therefore as warranting heightened

judicial vigilance. United States v. Carolene Prod. Co., 304 U.S. 144, 152 n.4

(1938). See also Newton v. Mahoning Cnty. Comm’rs, 100 U.S. 548, 559 (1879)

(“It is vital to the public welfare that each [legislature] should be able at all times

to do whatever the varying circumstances and present exigencies touching the

subject involved may require. A different result would be fraught with evil.”)

Given the risk of the VPA rendering a measure virtually unrepealable and

unamendable, courts should ensure that voters are fairly apprised of an initiative’s

principal provisions. This may sometimes be difficult, but those advocating a

measure have an alternative: the ordinary legislative process. In any event, such

difficulty cannot excuse the need for vigilant enforcement of procedural safeguards

8

on the initiative process. The initiative power, combined with the VPA, is “so

great” that “the safeguards provided by law against its irregular or fraudulent

exercise should be carefully maintained.” Cottonwood Dev. v. Foothills Area

Coal. of Tucson, Inc., 134 Ariz. 46, 48–49 (1982) (citation omitted).

II. The dangers of “ballot box budgeting” warrant scrupulous enforcement

of the requirement for a truthful description of the Initiative’s principal

provisions.

A. Ballot box budgeting is dangerous public policy.

States whose voters commonly use initiatives to mandate taxing and

spending have suffered terrible consequences from such “ballot box budgeting.”

In California, for example—which suffers from an arguably worse form of VPA-

style entrenchment—reliance on initiatives has become so routine that “the real

policy decisions are now being made in the plebiscitary process and not in the halls

of the legislature or the office of the governor, much less at the school board or the

city council.” Schrag, Paradise Lost: California’s Experience, America’s Future

195 (1999). As a result, voters use initiatives to impose or repeal taxes, mandate

expenditures, and override the budgeting process in ways that have “effectively

cripple[d] the legislature’s ability to adjust for future changes.” Klapper, supra at

801.

In fact, almost a third of all California’s revenues are permanently

earmarked by initiatives that cannot be changed by the legislature. Levinson &

9

Stern, supra at 697.3 The result, Schrag writes, is that much of that state’s budget

operates “on autopilot, beyond the control of any elected official.” Supra at 12.

Little wonder California has the largest debt of any state, of over $150 billion.4

Because “ballot box budgeting” often seems like an attractive alternative to

the messy legislative process, Californians have increasingly used it—with the

result that “[w]hat was once solely ‘the work of elected officials who have the

benefit of hearings, staff analysis and institutional memory has been given to

voters to make what is tantamount to a snap decision.’” Klapper, supra at 801

(citation omitted). As Levinson and Stern write, the main problem with ballot box

budgeting is that it is piecemeal. “Voters are presented with one issue at a time,

and it may be difficult for voters to appropriately consider the pros and cons of any

single measure in the larger context of the state’s budget.” Supra at 713. This is

3 A more recent analysis found that California’s mandatory spending accounted for

the entire growth of its spending between 2000 and 2015. Gordon, et al., Fiscal

Democracy in the States 39 (Urban Institute, July 2019),

https://www.taxpolicycenter.org/sites/default/files/publication/157519/fiscal_demo

cracy_in_the_states_how_much_spending_is_on_autopilot_1.pdf#page=37 4 U.S. Census Bureau, 2018 Annual Survey of State Government Finances,

https://www.census.gov/data/tables/2018/econ/state/historical-tables.html. This

number excludes local government indebtedness, which, added to state debt,

totaled $1.5 trillion…before the pandemic. Joffe & Ring, California’s State and

Local Liabilities Total $1.5 Trillion, California Policy Center, Jan. 3, 2019,

https://californiapolicycenter.org/californias-state-and-local-liabilities-total-1-5-

trillion-2/

10

less likely to happen in the legislative process, because stakeholders who stand to

lose from a proposed expenditure can object and have input.

In 1988, Californians amended their constitution to require a certain

percentage of the budget be spent on public schools regardless of other priorities or

resources. This means money is unavailable for other, sometimes more crucially

important, budget items. See Schrag, supra at 166-67. Now that California is

facing an unexpected revenue shortfall of some $54 billion due to the pandemic—

yet is still required to spend—lawmakers cannot shift money to where it is more

urgently needed, and have resorted to such budget tricks as “deferrals”—i.e.,

postponing payment—of as much as $1.85 billion. See California School Boards

Association, Governor Signs 2020–21 Budget Package, June 30, 2020.5

Arizona has already experimented with ballot box budgeting, notably with

Proposition 301 in 2000, which in combination with the VPA deprived the

legislature of its “plenary powers” to make “‘discretionary, policymaking

decision[s]’” about certain education funding. Ducey, 233 Ariz. at 6 ¶19 (citation

omitted). As a result, the legislature was compelled to increase spending as

specified in that initiative, regardless of whether circumstances might have

warranted a different course. Admitting that the anti-entrenchment principle would

5 http://blog.csba.org/2020-budget-signed/

11

have prohibited the legislature itself from imposing such a mandate, this Court

ruled that the VPA’s anti-repeal rule ties the hands of future legislatures. Id.

Even if legally correct, that outcome was troubling because establishing a

system whereby government operates automatically, beyond the control of elected

officials, is dangerous. It is, in fact, precisely the opposite of what the initiative

system’s inventors had in mind. They expected the initiative process to “allow

ordinary citizens to better control government.” McClory, Understanding the

Arizona Constitution 72 (2001). But the VPA “fundamentally ‘altered the balance

of power’” in a way not anticipated by the initiative process’s creators. Ducey, 233

Ariz. at 6 ¶17. Together, the VPA and the initiative process elevate ordinary

legislation to a semi-constitutional plane that elected officials cannot reach, and

which voters themselves also cannot reach without undertaking the expensive and

difficult process of a second initiative campaign. (Arizona initiative campaigns

typically cost between $3 and $5 million.6) The VPA therefore decreases

government accountability.

Whatever the desirability of that outcome, one thing is clear: voters should at

least be fully informed of the fact that a proposed initiative for increasing taxes or

6 Randazzo, Clean-Energy Ballot Measure Prop. 127 Now the Most Expensive in

Arizona History, Arizona Republic, Oct. 16, 2018,

https://www.azcentral.com/story/news/politics/elections/2018/10/16/arizona-clean-

energy-ballot-measure-proposition-127-most-expensive-state-history/1660198002/

12

mandating expenditures will deprive their elected legislators of power to alter—or

even to fix errors in—those mandates. If voters are being asked not only to tie the

hands of their elected representatives, but also to “irrevocably bind[] successor

legislatures,” Ducey, 233 Ariz. at 6 ¶16, they should at least know that such will be

the consequence.

B. The “Invest in Ed” initiative fatally fails to explain to voters that it

ties their legislators’ hands.

The 100-word summary here does not even try to inform voters of one of the

Initiative’s most extreme ramifications: the “Supplant Clause” which would bar the

legislature from “supplant[ing], replac[ing] or caus[ing] a reduction in other

funding sources.”7 By itself, this is an “‘important, consequential, or influential’’”

element of the Initiative, Molera, 245 Ariz. at 297 ¶ 24 (citations omitted), and

therefore belongs in the summary. But when combined with the VPA, it has even

more extreme implications.

That’s because the VPA prohibits not only laws that amend an initiative in a

way that fails to “further[] its purpose,” Ariz. Const. Pt. 1, art. IV § 1(6)(C), but

also bars any legislation that “impliedly amends or repeals provisions” of an

initiative, or even that is “inconsisten[t]” with an initiative. Meyer, 246 Ariz. at

192 ¶¶10, 11 (emphasis added).

7 Proposed A.R.S. § 15-1284(E).

13

If the Supplant Clause were combined with the VPA, future legislatures

would be prohibited from taking steps “inconsistent with” the Initiative’s

prohibition on “caus[ing] a reduction in other funding sources.”8 Presumably this

would mean that they could not restructure finances so as to transfer funds to other

types of education spending, or even to emergency uses inconsistent with the

Initiative’s spending mandates. If the state were to run a revenue surplus of $1

billion (which was expected as recently as January9), or a 27 percent shortfall, as is

now projected10—and even if a once-in-a-century catastrophe were to drastically

alter the state’s educational needs, as is happening now—the legislature could not

pass legislation that might be deemed “inconsistent” with the prohibition on

“caus[ing] a reduction in other funding sources.”11

This is a truly extreme result. It would establish a permanent and

unchangeable fund, based on an essentially unrepealable, unamendable income tax,

and would forbid the legislature from providing for the state’s other needs in ways

that reduce other funding sources, or from reducing other taxes even in

8 Proposed A.R.S. § 15-1284(E). 9 Arizona Free Enterprise Club, Current AZ Budget Surplus Built on Tax Increases,

Jan. 7, 2020, https://www.azfree.org/current-az-budget-surplus-built-on-tax-

increases/ 10 Conover, Budget Picture Not Clear Ahead in Arizona, NPR, Aug. 3, 2020,

https://www.npr.org/2020/08/03/895376971/budget-picture-not-clear-ahead-in-

arizona 11 Proposed A.R.S. § 15-1284(E).

14

emergencies. That unquestionably qualifies as a “‘thing of primary importance,’”

Molera, 245 Ariz. at 297 ¶24 (citation omitted), and must be included in the

summary. Yet the summary makes no mention of it.

Taxing and spending are the quintessential legislative powers. Reinhold v.

Bd. of Supervisors, 139 Ariz. 227, 232 (App. 1984). While the people may

certainly use initiatives to alter or limit that power, it is imperative that voters be

fully aware of what they are doing. The summary’s failure even to mention, let

alone explain, this principal provision of the Initiative, is fatal.

CONCLUSION

The judgment should be affirmed.

Respectfully submitted August 10, 2020 by:

/s/ Timothy Sandefur

Timothy Sandefur (033670)

Christina Sandefur (027983)

Scharf-Norton Center for Constitutional

Litigation at the

GOLDWATER INSTITUTE