Washington Court to Decide if State’s Voters Understood 2001 Tax-Cut Vote

Published August 1, 2007

The Washington State Supreme Court heard oral arguments in May in the legal battle over voter-approved Initiative 747, which set a 1 percent limit on annual increases in regular property tax collections.

In June 2006 King County Superior Court Judge Mary E. Roberts struck down the I-747 property tax limits, paving the way for state and local officials to increase the tax burden by as much as 6 percent a year.

Fifty-eight percent of Washington voters approved I-747 in 2001. Roberts’ opinion claimed “voters were misled as to the nature and content of the law to be amended, and the effect of the amendment upon it.”

Multiple Initiatives

One year before the I-747 referendum, voters approved Initiative 722, which cut the cap on annual property tax increases from 6 percent to 2 percent and eliminated several tax increases. Both initiatives were the work of anti-tax activist and initiative guru Tim Eyman.

Eyman says I-747 passed with good reason.

“Voters overwhelmingly supported Initiative 747 because it addressed a very real problem–our state’s crushing property tax burden,” Eyman said. “I-747 is working. It’s been working for six years. Voters don’t want this initiative’s reasonable protections diluted or taken away.”

Eyman estimates the I-747 property tax cap has saved taxpayers about $1.6 billion.

Earlier Initiative in Court

Taxpayers thought they had won when I-722 passed in November 2000, but within a month the initiative was being challenged in court. Plaintiffs–including Washington Citizen Action, the Washington Welfare Rights Organization Coalition, 1000 Friends of Washington (all nonprofit corporations) and Whitman County–claimed the tax cuts and property tax cap were separate subjects shoehorned together in violation of the state constitution.

While I-722 was being held up in court, Eyman and his supporters decided to run a new initiative, which would reduce the cap on annual property tax increases even further, from 2 percent to 1 percent. They faced the dilemma of whether they should draft the new initiative to amend I-722, which passed but was being challenged in court, or to amend the law that existed prior to the passage of I-722. Either choice risked amending a law that was no longer valid.

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 upheld, I-747 would reduce the cap from 2 percent to 1 percent; if struck down, the cap would be reduced from 6 percent to 1 percent.

‘Pamphlet Pretty Clear’

“The voters’ pamphlet was pretty clear about it all. So was the debate on the issue. So was the news coverage,” Peter Callaghan, a reporter for the Tacoma News Tribune, said of the initiative.

Roberts disagreed and struck down I-722 after the election. Roberts argued voters were misled by initiative language that reduced the property tax cap from 2 percent to 1 percent, whereas if they had known the reduction was from 6 percent to 1 percent they might have decided differently.

“If Judge Roberts’ decision is allowed to stand,” said Jonathan Bechtle, director of the Evergreen Freedom Foundation’s Citizenship and Governance Center, “it will put a dangerous tool into the hands of those who wish to undermine the peoples’ right of initiative, since any court or the legislature will be able to nullify an initiative simply by making a technical change to whatever law it amends.”

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