If a ballot measure that seeks to increase taxes on certain taxpayers and small businesses is adopted by voters in November, it would vault Arizona onto a top-10 list of states with the highest tax rates in the country.

But it鈥檚 a big if. A superior court judge has the initiative, known as Invest in Ed, not to appear on the fall ballot due to organizers鈥� failure to properly describe the principal provisions of the measure on the petition that voters signed to send the question to the ballot.

The initiative organizers have appealed the decision to the state Supreme Court.

A 77.7% jump

If the high court overturns the lower court decision, voters will be asked whether to increase the state鈥檚 top tax rate, currently 4.5%, to 8.0%, a 77.7% jump.

The 8.0% rate would slot Arizona between Wisconsin and New York according to done by Intuit TurboTax. Of Arizona鈥檚 neighbors, only California would have a higher top income tax rate.

A published by the Tax Foundation, a nonpartisan organization focused on analyzing economic policy and its impacts on real outcomes, shows that higher taxes on income have been historically linked to lower economic growth, decreased investment, and less job growth.

Arizona鈥檚 economic competitiveness and robust jobs market has grown stronger with time. The state has vaulted ahead in the past decade to the top of lists ranging from 鈥溾�� to 鈥溾��.&苍产蝉辫;

The Invest in Ed initiative could put this momentum at risk, opposition groups argue.

Garrick Taylor, spokesman for the Arizona 番茄社区 of Commerce and Industry, that, 鈥淭his will put downward pressure on economic growth and make investing in schools and teacher salaries more difficult going forward.鈥�

鈥淐rushes Arizona鈥檚 reputation鈥�

In a statement submitted for the election year publicity published by the Secretary of State鈥檚 Office, Arizona Tax Research Association President Kevin McCarthy says Arizona鈥檚 tax rates stack up well regionally and nationally.

鈥淥ur rates are low enough to be both regionally and nationally competitive, encouraging economic growth in Arizona as well as attracting new residents and businesses,鈥� McCarthy said. 鈥淯pturning this effective system with an 80% increase to the top marginal rate permanently changes Arizona鈥檚 framework from 鈥榣ow cost, high growth鈥� to 鈥榟igh tax, steer clear.鈥� In one shot, it crushes Arizona鈥檚 reputation as friendly to small business. It signals to businesses everywhere that Arizona has an unreliable tax climate and is not suitable for investment.鈥�

Economic growth vs. out-migration

National publications have taken notice of Arizona鈥檚 increased competitiveness nationally.

The American Legislative Exchange Council in the of its 鈥淩ich States, Poor States鈥� report said tax reforms included as part of the state鈥檚 conformity to the federal Tax Cuts and Jobs Act 鈥渓ightened the income tax burden for nearly every filer.鈥� 

鈥淎rizona made the right decision to make federal tax conformity a net tax cut for income earners,鈥� the report says.

The ALEC report finds that states that adopt smart tax and regulatory policies are more likely to achieve economic growth, while comparatively high-tax states are more likely to experience out-migration of capital and residents. 

鈥淭hose with lower taxes, reasonable regulatory burdens and sensible budgeting demonstrate a record of opportunity growth that continues to attract new residents.鈥� 

Education funding

Since the turn of the century, there has been bipartisan support for increasing education quality and per-pupil spending.

Proposition 301, an initiative approved by voters in 2000, increased the state sales tax by six-tenth of one percent, with revenues directed to education. The governor and Legislature in 2018 extended Proposition 301 for an additional 20 years.

Proposition 123, which voters passed in 2016, increased by $3.5 billion allocations from the State Land Trust to be spent on education.

Following the passage of Proposition 123, Gov. Doug Ducey and the state Legislature expanded teacher salaries and per-pupil spending in 2018, 2019, and 2020. The 鈥溾�� plain raised teacher salaries across the state by an average 20%, also investing in resources such as:

• School Infrastructure 
• Textbooks 
• Modernizing Curriculum 
• Updating Technology 
• School Buses

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