Futurewise Challenge Defeats Eyman Initiative
King County Superior Court Judge Mary Roberts declared that Tim Eyman’s 2001 Property Tax Initiative was unconstitutionally deceptive last week. This is the second major blow in a week for Eyman, who last week failed to deliver the required signatures for R-65.
The lawsuit was brought by Whitman County, Futurewise, and several other prominent statewide citizen organizations, including Washington Citizen Action, and the Welfare Rights Organizing Coalition. The law firms of Smith & Lowney PLLC and the Public Interest Law Group, PLLC represented the plaintiffs.
I-747 had been Eyman’s most significant victory. The 2001 Initiative generally limits increases to State and local property tax levies to one percent (1%) per year, which is well below the rate of inflation. The result has been a funding crisis for local and state government and cuts to critical public services.
I-747 was projected to reduce government revenues by about $1.5 billion over its first six years, and its impacts increase dramatically with each passing year. The State Department of Revenue projected that I-747 would reduce state and local government revenue by half a billion dollars in fiscal year 2007.
“The Court’s decision is a critical victory for growth management,” said John Zilavy, Futurewise’s Legal Director. “I-747 was actively harming the parks, schools, libraries, streets, and other public investments required to manage growth successfully.”
Attorney General Rob McKenna has appealed the ruling to the Supreme Court.
The suit challenged I-747’s constitutionality on several grounds. First, the suit alleged that I-747 violates Article II, § 37 of the Washington Constitution, which requires an initiative to accurately set forth any law it seeks to amend. I-747 stated that the previous cap on levy increases was two percent (2%), and that the initiative would reduce this cap by one percent (1%). However, the cap that actually existed at the time of the vote was six percent (6%) and I-747 caused a five percent (5%) reduction. This error misled the voters, the lawsuit alleges.
Second, the suit alleged hat I-747 violates Article II, § 19 of the state constitution, which requires that an initiative’s subject be expressed correctly in its ballot title. I-747's ballot title falsely stated that the 1% limit on growth of the State property tax levy, known as the State School Levy, could be overcome by popular vote, allowing the State School Levy to keep pace with inflation. In fact, I-747 does not allow for a popular statewide vote. Thus, rather than creating a "right to vote on property tax increases" as the ballot title and campaign promised, I-747 permanently caps increases to the State School Levy at below the rate of inflation, guaranteeing long term erosion of the State’s single largest source of education funding. The State projected that I-747 would reduce the value of the State School Levy by 8% over the first six years.
Both of these arguments were used to invalidate Initiative 695, an early Eyman initiative that sought to reduce the Motor Vehicle Excise Tax to $30.
Whitman County Commissioner Jerry Finch said of the lawsuit: "Initiative 747 has taken a dramatic toll on small county governments like those east of the mountains. Under this initiative, our revenue simply cannot keep up with inflation and we are being forced to cut critical services. Our single-service taxing districts, such as our fire districts, are also facing dramatic cuts from this Initiative. These cuts are going to get worse every year I-747 is on the books.”