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Idaho Gov. Assails Altering Signature Rules For Tax Hike Drive

By Paul Williams · June 19, 2020, 7:54 PM EDT

Idaho's governor has urged a federal court to deny granting an income tax increase's campaign more time to submit petitions, saying his stay-at-home order amid the novel coronavirus pandemic wasn't to blame for the ballot question not gathering enough signatures.

Republican Gov. Brad Little, along with Idaho Secretary of State Lawerence Denney, argued Thursday that the Reclaim Idaho campaign squandered the bulk of its time to gather signatures to place an income tax increase question on the Nov. 3 ballot before the stay-at-home order was issued March 25.

The officials said the campaign admitted it didn't start gathering signatures until about six months before the April 30 signature deadline, even though it had 18 months to do so. Therefore, the officials said Reclaim Idaho lacked standing to seek a preliminary injunction against Idaho's election laws because no state action hindered its ability to gather signatures and the campaign wouldn't suffer irreparable harm if the law is left in place.

The campaign's "own voluntary choices and dilatory conduct caused Reclaim Idaho to miss the deadline to gather the required signatures for its initiative petition," the officials said in a brief.

Reclaim Idaho alleged on June 8 that Little and Denney violated its First Amendment rights by not providing the campaign with a safe method to gather signatures amid the spread of COVID-19, the respiratory illness caused by the virus. The campaign asked the court to grant it an additional 48 days to gather signatures and to allow petitioners to obtain electronic signatures, which Denney told the campaign isn't allowed under Idaho law.

The ballot question, known as the Invest in Idaho initiative, would ask voters to raise the top income tax rate to 9.925% from 6.925% on taxpayers, trusts and estates with taxable income of $250,000 or more, or $500,000 for married couples. If approved, it would also increase the corporate income tax rate to 8% from 6.925%. The new tax rates would take effect Jan. 1, and it is estimated that they would raise $170 million, which would be earmarked for education.

The officials alleged that the campaign lacked standing to bring the challenge because Reclaim Idaho voluntarily suspended its signature-gathering efforts on March 13, the day that Idaho declared a state of emergency from the pandemic, despite there being no stay-at-home mandate in place.

According to court documents, the campaign has gathered about 30,000 of the 55,057 signatures required to place the question on the Nov. 3 ballot. Even though the stay-at-home order truncated the campaign's signature-gathering time line, the officials said it was the campaign's fault that it chose to try to collect nearly half of the signatures in the final six weeks of the 18-month window to obtain them.

"Given that [campaign's] failure to meet the deadline to collect the necessary signatures was the product of the pandemic and their own voluntary choices, [the campaign's] failure to meet the deadline cannot be attributed to state action," the brief said.

Additionally, the brief said the campaign wouldn't suffer irreparable harm if the court denies the request because they could start the petition again for another ballot.

Reclaim Idaho had told the court that it was on target to fulfill the signature requirement when the pandemic hit, saying it was ahead of the pace of its 2018 Medicaid expansion ballot drive.

Counsel for the campaign, Deborah Ferguson of Ferguson Durham PLLC, told Law360 on Friday that Reclaim Idaho believes that the stay-at-home order, where violations were subject to criminal misdemeanor penalties, "imposed a severe burden" on the signature drive.

"What we're asking the court for is some reasonable and temporary accommodations in the pandemic, so that Reclaim [Idaho] could have its fundamental constitutional rights protected," Ferguson said.

In asking the court to allow it the extra time to submit petitions, the campaign is seeking the ability to gather electronic signatures through DocuSign, a leading company that allows electronic signing of legal documents, saying that would be a safe method to obtain signatures during the pandemic.

But the officials told the court that verifying the electronic signatures would create burdens on the county clerks because those signatures would not match the signatures on signers' registration cards. The officials also claimed the state could have difficulty administering the initiative for the ballot in the compressed time line that would be created if the signature deadline was pushed back to early August.

Ferguson, however, told Law360 that the state would have sufficient time to handle its obligations to place the question on the ballot if the court rules in Reclaim Idaho's favor. Even with the shortened time line, the election would still be several months away from the signature deadline, she said.

Scott Graf, a spokesman for the state attorney general's office, which is representing Little and Denney in the case, told Law360 on Friday the office had no comment on the dispute because the litigation is pending.

A hearing for the case is scheduled for Tuesday.

Reclaim Idaho is represented by Deborah Ferguson and Craig Durham of Ferguson Durham PLLC.

Little and Denney are represented by Robert A. Berry and Megan A. Larrondo of the Idaho Office of the Attorney General.

The case is Reclaim Idaho et al. v. Bradley Little et al., case number 1:20-cv-00268, in the U.S. District Court for the District of Idaho.

--Editing by Joyce Laskowski.

For a reprint of this article, please contact reprints@law360.com.

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