Court strikes down 1999
Washington state tax-limit initiative
By Kay Bell • Bankrate.com

SEATTLE -- Washington voters have been trying for a year to get the right to say "yea" or "nay" to state tax increases. A recent court ruling means they'll be waiting a while longer.

Just days before the Washington electorate votes on even more state tax matters, a popular tax ballot initiative that passed last year was killed. The Washington Supreme Court ruled on Oct. 26 that Initiative 695, approved by voters in the 1999 general election, is unconstitutional.

The tax issue itself was not the problem. Rather the court determined that the way the proposal was presented violated the state's rules because it dealt with two topics: elimination of the vehicle excise tax and electorate approval of all tax and fee increases.

Initiative supporters argued that since the questions were both tax matters, the ballot question qualified as one issue. The court, however, said the tax matters were separate issues and, under the constitution, should have been presented as two individual ballot questions.

Immediately following last year's election, transit union workers challenged the proposal in court because of the feared loss of an estimated $750 million in annual tax money used for transportation and transit services and local government public safety and health programs. In an effort to forestall at least part of the legal action, the Washington legislature in March enacted a flat $30 license tag fee.

The leader of the tax-limit initiative points to the legislative car license bill as proof that voter tax action works. Tim Eyman noted that the vehicle tax petitions circulated last year drew the second-highest number of signatures for such an initiative in state history. If not for the grassroots movements, he says, "we wouldn't have $30 tags."

Eyman vows to revisit the initiative to require voter approval for all tax measures in the 2001 election. The "nice part" of the court's decision, he says, is that it provides a road map for drawing up the next tax-limit initiative.

Eyman is also the sponsor of this year's Initiative 722, which would roll back any tax increases enacted between July 2, 1999, and Dec. 31, 1999, as well as limit state and local property tax increases. Measure supporters are hopeful about 722's chances of passage, especially since there is no organized opposition to the initiative.

The Washington Office of Financial Management, however, warns local governments they could lose a total of almost $349 million from 2001 through 2003 if Initiative 722 passes. The state's general fund would be almost $36 million lighter during that period.

By 2005, another $584 million would never make it into local taxing districts and almost $71 million would be denied to Washington's general fund, according to the agency.

-- Posted Nov. 2, 2000