Almost from the moment voters approved Prop 416/417 in 2017, Pinal County has been in court trying to put it into action. A ruling handed down today from the Arizona Court of Appeals is a step toward that goal.
Prop 417 created a sales tax as the funding mechanism for countywide road improvements, including the widening of State Route 347. It is part of the county’s Regional Transportation Authority.
The Goldwater Institute, a conservative think-tank, sued the county, saying the proposition violated taxpayer rights, in the case Vangilder, et al. v. Pinal County, et al. The tax court agreed. However, today’s ruling from the appeals court overturned the tax court judge’s ruling.
“We find the Prop 417 tax to be valid,” Judge Kenton D. Jones wrote in the court opinion. “The RTA’s authorizing resolution does not change the substance of the question posed to and approved by the voters; the tax, by its terms, applies across all transaction privilege tax (TPT) classifications; and the tax includes a valid, constitutional modified rate as applied to the retail sales classification. Accordingly, we reverse the order invalidating the tax.”
Mayor Christian Price said while the tax court is legitimate and important, that ruling involved only one judge. He said the Court of Appeals had three judges and a much larger staff to tackle the complexities of the case.
“It is a very big validation,” Price said.
During the court filings, Pinal County was allowed to continue collecting the sales tax. That now amounts to over $27 million and may be closer to $29 million, according to Andy Smith, the RTA general manager.
Smith said he’s anxious to get started after talking about the road projects for so long. The Goldwater Institute has 30 days to indicate whether it will appeal to the Arizona Supreme Court.
“It’s good news, but we want it to be 100%,” Smith said.
The RTA was not allowed to implement the monies for the improvement projects specified in Prop 416, which include State Route 347 improvements and the creation of an east-west corridor from Maricopa through Casa Grande to Interstate 10.
Price said the City can celebrate the win for what it is and see if the Goldwater Institute opts to continue the case.
County Supervisor Anthony Smith called the ruling, “Super-duper.”
“We felt, and I felt in particular, that we had the winning argument,” he said, adding the lawsuit has wasted taxpayer money.
Goldwater attorney Timothy Sandefur had argued the tax applies only to retail sales, in violation of the constitution. The appeals court judges disagreed and dismissed several cases cited by Sandefur as inapplicable to Prop 417.
“The people of Maricopa spoke years ago by approving 416/417, and this is great for Maricopa,” said Maricopa City Councilmember Vincent Manfredi. “The fight may not be over as Goldwater can and will likely appeal to Arizona Supreme Court.”
Anthony Smith said that requires more patience from everybody involved, but the county “is in it for the long game.” He said he hoped the challengers would come to understand continuing the case is “all in vain” and may be endangering people on county roadways that need improvement. “It’s shameful,” he said.
The Goldwater Institute had claimed an authorizing resolution by the RTA ran counter to what the voters approved in Prop 417. The appellate judges disagreed.
“The RTA is not authorized to enact a tax and the June Resolution did not purport to do so,” Jones wrote in the opinion. “Nor did the June Resolution ask the voters to enact the tax. It simply asked the Board to put a transportation excise tax on the County ballot.”
If ultimately Pinal County wins the case, Price said it would be huge for Maricopa, especially regarding SR 347 expansion.
“Having that collateral would let Gila River know and let ADOT know that we’re serious,” he said.
Prop 417 intends to collect $640 million. Of that about $110 million is for projects in and around Maricopa and impacting its residents, Price said.
In the two years since the proposition was meant to be implemented, costs of construction from materials and labor, including the minimum wage, have increased. Finding construction workers has been a concern as many projects across the state are underway, but Andy Smith said there are signs that is leveling off.
Vincent Manfredi is a minority owner of InMaricopa.