Tax-reduction redux

Once again, Washington lawmakers are about to make law from flaw, correcting what Tim Eyman got wrong but embracing what voters clearly want: a crimp on taxation.
Once again, Washington lawmakers are about to make law from flaw, correcting what Tim Eyman got wrong but embracing what voters clearly want: a crimp on taxation.

Win some lose some - that has been the story of Tim Eyman's remarkably successful political life: The electorate giveth, but the judiciary taketh away. And then, if he's lucky, the Legislature restoreth. With a special session of the Legislature poised to do just that, it's worth reviewing how we got to this point – again.

This month, Washington voters approved Eyman's Initiative 960, which will make it harder for state government to raise taxes. That law's on the books until further notice. But two days later, the Washington Supreme Court tossed out another of Eyman's initiatives, I-747, which passed handily six years ago and limited property-tax revenue increases to 1 percent per year. With that older initiative stricken, the state reverts to the pre-existing law, which permitted increases of up to 6 percent. Eyman has predicted governments will go into a feeding frenzy - "pigs at the trough" - tearing into their potential windfall of 5 percent multiplied by six years.

They seemed at first to be doing just that. The very next week, the King County Council passed a budget that included a 25-cent bus fare increase, and hikes in both sales and property taxes to finance care for the mentally ill and addicted, reinforcement of levees along the rivers, and creation of a ferry district that would operate the Vashon passenger service, the Elliott Bay water taxi, and five experimental routes on Lake Washington and Puget Sound.

"The council went on a tax-and-fee-raising binge ... that defies logic and harms middle- and lower-income families trying to make ends meet," The Seattle Times proclaimed. In a news release, the council collectively said, "We want to make clear that the revenue votes taken yesterday by Councilmembers have been in development for months and were in no way related to the unexpected ruling last week from the State Supreme Court on Initiative 747."

Exactly why the King County Council felt a need to genuflect toward I-747 isn't entirely clear. A majority of King County voters rejected it. Were they deceived? Did they not mean what they said? Or have circumstances changed so much since 2001 that they have presumably changed their minds? Asked why King County, of all places, should abide by I-747, Eyman says because "working class families and fixed income senior citizens are really struggling right now and their cumulative tax burden - combined federal, state, and local - is taxing them out of the county. Do we really want to have King County be a place where only rich people can afford to live?" Gov. Chris Gregoire called for the Legislature to enact the fallen 1 percent limit. Then her challenger, Republican Dino Rossi, insisted on a special session to enact it before the end of the year. Gregoire first insisted a special session wasn't necessary, then saw which way the wind was blowing and decided it was. So lawmakers will take up the subject on Thursday, Nov. 29.

All this evokes a sense of deja vu. We saw it happen before with Initiative 695, the $30 car-tab measure that made Eyman a household name, back in 1999. I-695 passed overwhelmingly, but opponents sued, and King County Superior Court Judge Robert Alsdorf ruled that the initiative violated the state constitution that a single piece of legislation can address only a single subject.

"Poor Tim Eyman threw a tantrum on Tuesday, tearing up a campaign sign and flinging the shreds around a King County courtroom," wrote John Webster in the Spokane Spokesman-Review at the time. "The fast-talking souvenir watch salesman had just been forced to sit in silence while a judge shredded his attempt to pose as a maker of laws."

But Eyman and his supporters had the last laugh. Elected officials scurried to legislate the fee reduction that the people had approved unconstitutionally. On the same day Alsdorf ruled against the initiative, "Gov. Gary Locke and many legislative leaders wasted no time ... assuring voters the $30 license tabs they approved in November are here to stay – regardless of what a King County judge says," Joseph Turner reported in the Tacoma News Tribune. "'Vehicle license fees were one of the most hated taxes in Washington,' the Democratic governor said. 'Despite the court's ruling today, we have no intention of returning to the old system of high license tab fees. The $30 fees are here to stay.'" The Legislature quickly enacted a law to accomplish what Eyman had tried to do through I-695.

This time, the legal issues are more arcane. Back in 1997, Referendum 47 capped annual property tax increases at 6 percent or the rate of inflation, whichever was lower. In 2000, Eyman's Initiative 722 lowered the rate of increase to 2 percent. Later that year, a Superior Court judge ruled I-722 unconstitutional because, like I-695, it embodied more than one unrelated subject – and the judge enjoined the state from applying it. At the beginning of 2001, Eyman started collecting signatures for Initiative 747, which would lower the rate to 1 percent. More than four months before the deadline for submitting initiatives, the Superior Court made the injunction permanent. Eyman subsequently turned in enough signatures to qualify I-747 for the ballot.

After the deadline for initiatives but before the election, the state Supreme Court upheld the lower court ruling. I-722 was toast. The voters' pamphlet made it clear that I-747 would lower the rate of tax increase to 1 percent. It didn't make clear what I-747 would lower the rate from. Text in the pamphlet referred to the constitutional uncertainty of I-722. But the language of I-747 itself said that the initiative would amend I-722.

I-747 passed handily, with 58 percent approval. Opponents sued, claiming that the voters' pamphlet language had been unconstitutional and that voters had been deceived. They argued that I-747 violated Section II, Article 37 of the Washington constitution, which says: "No act shall ever be revised or amended by mere reference to its title, but the act revised or the section amended shall be set forth at full length." A King County Superior Court judge agreed with the plaintiffs, suggesting that voters may not have known what they were doing. The state, in its legal role of representing the people who had enacted the law, appealed the decision.

The Supreme Court decided the case 5-4. The majority pointed out [PDF] that the constitutional language is unequivocal. And it applies unequivocally to initiatives, as well as to statutes passed by the Legislature. The initiative language in the voters' pamphlet referred to a law that didn't exist. But that didn't settle the issue. Article II, section 37 doesn't specify timing. Did the language have to be correct when people signed initiative petitions or when they voted on the initiative? The court decided that the language had to be correct when they voted. Could voters' pamphlet language that alerted people to the uncertainty surrounding I-722 overcome the lack of correct language? The court decided it could not.

What is an initiative proponent to do? The Supreme Court majority suggested that Eyman could have just gone out and gotten another 224,880 signatures for another initiative that would have amended the law that was in effect after the court tossed 722. Most initiative sponsors probably wouldn't find this an attractive option. The court thought four months should have been plenty of time to gather signatures all over again. What about three months? Two? One? The court didn't say. Of course, filing a new initiative isn't the only option. If you're drafting an initiative to amend a law that has been ruled unconstitutional by a lower court, you might want to use language that will make the initiative valid whatever the Supreme Court decides. As it was, the majority asserted that voters had indeed been deceived.

The dissent [PDF] by four of the court's more populist members was basically, "Give us a break. Voters can read. They thought they were reducing taxes. They weren't deceived about that."

Evidently, Gregoire and Rossi agree with the court's dissenters. Hence the scramble to enact the tax limit.

Eyman is clearly right about at least one thing: Modern government has an insatiable appetite for tax dollars. But just which services do tax-averse citizens want government to stop providing? Do voters want more potholes on the streets they drive, fewer cops in their own neighborhoods, longer waits when they apply for building permits? People do want services; they just don't want to pay. "When people expect to get 'something for nothing,' they are sure to be cheated," no less an expert than P.T. Barnum once wrote, "and usually deserve to be."


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About the Authors & Contributors

Daniel Jack Chasan

Daniel Jack Chasan

Daniel Jack Chasan is an author, attorney, and writer of many articles about Northwest environmental issues.