Prop 208 is under serious threat from SB1783, a bill that would drastically revamp the
Arizona tax code.  Make no mistake, these are tax loopholes for the very wealthy.
The bill will immediately reduce the funds raised by Prop 208 by about 1/3.
SB1783 has passed the Senate, and must be stopped in the House. It was passed by
the House Ways &; Means Committee on Wed. morning.

The bill is part of a concerted effort this legislative session to create massive new tax
cuts, taking advantage of an unexpected surplus, rather than directing funds to the
needs of Arizonans during this pandemic.

WHAT DOES SB1783 DO?:

SB1783 is intended to undo the will of the voters. It allows the very wealthiest taxpayers
to remove income from traditional income categories, and it creates new categories to
evade Proposition 208. (For details see the JLBC Fiscal note and the Bill Summary.) New categories
created by SB1783 include:

“Arizona Small Business Income” category is created with a single tax bracket of
of 4.5% (a flat tax ). Married couples earning business profits in excess of
$568,417 will benefit from this flat tax which shields their taxable income from
the Prop 208 surcharge.

Estates and Trusts will no longer be subject to the individual tax rate. Instead
new tax brackets are created for income from estates and trusts. The tax
brackets are the same as taxes on individuals, but earnings in the highest tax
bracket will be exempt from the Prop 208 surcharge.

ACTION:

1. Call or Email your House members and tell them to stop creating
tax loopholes that undermine public schools and Arizona school
children. Find your Representatives at www.azleg.gov/findmylegislator/.

2. Also call Rep. Michelle Udall (LD25, 602-926-4856) and Rep. Joel John
(LD4, 602-926-3276) who are important possible no votes.

Thank you for responding to this urgent call. The House will be the the last chance to
stop this unravelling of the work of so many public school supporters.

--The PCI Strategy Team