Washington Court Strikes Down Tax Cap OKed by Voters

Published January 1, 2008

A measure to limit property tax hikes that Washington voters overwhelmingly approved in 2001 has been ruled unconstitutional by the state’s supreme court.

The court handed down the 5-4 ruling against Initiative 747 on November 8. The majority ruled the “text of the initiative misled voters about the substantive impact of the initiative on existing law.”

The four dissenting judges wrote, “There is no confusion, ambiguity, or uncertainty in this initiative. The ballot title and text clearly disclose the effect of the new legislation to reduce taxes and amend current legislation allowing higher yearly tax increases. If a voter were to simply read the text of the initiative, the voter would have understood that I-747 reduced the property tax levy limit to one percent. This is not misleading.”

Prior Legal Action

The divergent opinions were the result of confusion stemming from court action over another initiative passed one year before I-747. (See “Washington Court to Decide if State’s Voters Understood 2001 Tax-Cut Vote,” Budget & Tax News, August 2007.) That initiative–I-722–cut the cap on annual property tax increases from 6 percent to 2 percent and eliminated several tax increases.

Soon after voters approved I-722, the initiative was challenged in court. While I-722 was being held up in court, Tim Eyman, its chief sponsor, ran a new initiative to reduce the cap on annual property tax increases even more, from 2 percent to 1 percent.

Eyman and other tax-cap supporters faced the dilemma of whether to draft the new initiative to amend I-722, which passed but was being challenged in court, or amend the law that existed prior to the passage of I-722. Either choice risked amending a law that was no longer valid.

Both Scenarios Covered

Eyman and his backers anticipated the problem, explaining in the voters’ pamphlet that I-722 was being challenged in court, and presenting both scenarios. If I-722 were upheld, I-747 would reduce the cap from 2 percent to 1 percent; if I-722 were struck down, I-747 would reduce the cap from 6 percent to 1 percent.

In an earlier appellate court ruling against I-747, Judge Mary Roberts found this was confusing and misleading, and on November 8 five state supreme court justices agreed.

Amber Gunn ([email protected]) is a policy analyst for the Evergreen Freedom Foundation’s Economic Policy Center in Olympia, Washington.