PHOENIX — In a major victory for the legislative minority, the state Court of Appeals ruled today that lawmakers on the losing end of last year's Medicaid expansion have a constitutional right to challenge the law and the levy it imposes.
In a unanimous decision, the judges rejected arguments by Gov. Jan Brewer that only the hospitals subject to the levy have the ability to argue that it is a tax and therefore can be enacted with only a two-thirds vote. The assessment got only a bare majority.
More significant, the court rejected Brewer's contention that a simple majority of lawmakers have the constitutional power to decide when a measure needs a two-thirds vote. Appellate Judge John Gemmill said that ignores the actual language of the Arizona Constitution.
He pointed out that the voter-approved mandate for a two-thirds vote spells out that it applies to a host of changes in revenues, including the imposition of any new tax as well as the imposition of any new fee or assessment. It also applies to authorizing any state agency to set fees.
Gemmill said the plan language dictates that if a measure does anything spelled out in that provision, it can be enacted only by a two-thirds majority. He said, in essence, that allowing a simple majority to decide when to impose that two-thirds requirement would undermine the constitutional language.
"We reach this conclusion because the plain language of (the provision) reveals it is a limitation on the legislature's power to pass certain revenue raising measures," Gemmill wrote. Any other interpretation, he said, eviscerates the ability of the constitutional's "ability to act as a limiting provision on the legislature's power."
Today's ruling does not end the matter — and not only because Brewer is likely to seek Supreme Court review.
Even if the high court leaves the ruling undisturbed, all it does is give the go-ahead to the lawmakers opposed to the Medicaid expansion a chance to make their case that the levy — Brewer calls it an assessment — is in fact a tax and therefore subject to the two-thirds vote.
Hanging in the balance is the question of whether the tax on hospitals — an estimated $256 million this coming budget year — can be collected and, by extension, whether there is money for Brewer's Medicaid expansion.
Without that assessment, Arizona lacks the funds to expand Medicaid eligibility and take advantage of federal funds available through the Affordable Care Act.