December 31, 2014

Arizona Supreme Court rules that legislators can challenge Gov. Brewer’s illegal Medicaid tax

By Anastasia P. Boden Attorney

The Arizona Supreme Court said goodbye to outgoing governor Jan Brewer by upholding the right of legislators to challenge her illegal Medicaid expansion efforts. Last year, Brewer and her supporters engineered an expansion of the state’s Medicaid program pursuant to Obamacare—bizarrely, the very same Medicaid expansion she successfully challenged in the U.S. Supreme Court in the 2012 Obamacare case. To pay for this expensive change of mind, Brewer’s bill included a tax on hospitals.  But there’s a problem: Arizona’s constitution requires that all taxes be passed by a supermajority vote, or 2/3 of the legislature.  In violation of that rule, a simple majority passed the expansion by declaring the tax a “fee” and saying the supermajority requirement didn’t apply.

Represented by our friends at the Goldwater Institute, a group of legislators who voted against the bill sued, arguing that the law violated the supermajority requirement.  The governor responded first that the court could not hear the case because the Legislature had the sole authority to decide whether the supermajority requirement applied, and, second, that the legislators could not sue because they had not suffered any injury.  The trial court agreed, and threw out the case.  But the Court of Appeals reversed that, declaring that the legislators could enforce the constitutional supermajority requirement.

On appeal to the Arizona Supreme Court, PLF filed an amicus brief arguing that legislators cannot be the sole judges of whether a supermajority requirement applies—otherwise, that important limit would be rendered meaningless.  The majority will always have an incentive to ignore a supermajority requirement; after all, a supermajority requirement exists for the sole purpose of curbing the majority’s power.

Today the Arizona Supreme Court agreed, and held that where a group of legislators had the votes to defeat a law, and the law was enacted nonetheless, that group can ask a court for relief.  Notably, the Court held that the individual legislators did not have standing to sue; only the bloc that, together as a whole, could have defeated the law.

As we argued in our brief, supermajority requirements bolster democratic values.  By slowing down the legislative process and forcing a wider consensus, these requirements improve the quality of legislation, impede hasty political decisions made for short-term gain, and help ensure that laws are enacted for the broader good instead of special interest groups.  They also protect the politically powerless, who encounter greater difficulty organizing to protect their interests.  Fortunately, today the Arizona Supreme Court preserved this important safeguard.

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Biggs v. Betlatch

A bare majority of the Arizona state legislature passed a law requiring the director of the state Health Care Cost Containment System – which governs the state Medicaid program – to levy an “assessment” on hospitals to pay for Medicaid expansion. Legislators who opposed the law sued to invalidate it on the grounds that the bill created a tax that required a supermajority vote in the Legislature. Lower courts upheld the law. PLF filed an amicus brief urging the Arizona Supreme Court to grant review and protect the interests of taxpayers and the integrity of government by enforcing constitutional, statutory, and regulatory restraints on taxing and spending.

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