747 Supreme AftermathNovember 9th, 2007 by Steven Gardner
In covering Thursday’s State Supreme Court decision, which overturned Initiative 747′s 1 percent property tax cap, the most important question we wanted to answer was whether your taxes were likely to go up beyond the former standard. In the short term it would appear they won’t. There are 43 different taxing districts in the county and we haven’t found one that would definitively say it would go for more than the 1 percent. Even County Commissioner Josh Brown’s complaints amounted to little more than calling for a discussion of “systemic solutions.” His unwillingness to respond to how the county would respond could mean something and gives us all reason to watch Port Orchard closely, but there’s been no change so far.
Kitsap County Assessor Jim Avery provided some more numbers of interest on this issue. Before 747, taxing districts serving fewer than 10,000 people had the straight 6 percent standard. Districts above the 10K mark, however, were limited to inflation or 6 percent, whichever was less. They could get the 6 percent, however, by officially declaring “substantial need” and passing it with a majority-plus-one vote. In Bremerton it would have meant a 6-3 vote. In Poulsbo it would have to be 5-2.
I’m treading into Bob Meadows territory for the next two paragraphs. I welcome his correction.
If a taxing district didn’t levy the full amount one year, it could bank it and draw it in the future. Since 747′s limits set the rate at 1 percent, smaller districts built up a bank of 5 percent a year. The 30 percent number gets thrown around, but it would be more because it compounds from one year to the next. According to my math, it’s about 35 percent. In the worst-case scenario, it means a taxing district that charged you $100 in 2001 and planned to charge you $106.51 in 2008 could instead levy $141.85, or thereabouts. It’s more complicated than that, but that’s the idea.
For the bigger districts the “very rough” number is 7.24 percent, according to Avery. That’s the sum of the annual inflation numbers, minus the 1 percent each year.
However, using the same formula I used before, it means a district that charged you $100 in 2001 and planned to charge you $106.51 in 2008 could instead levy $117.21. If the district declared a “substantial need” need this year, that number goes up about $4.
These are all vagaries, of course, because they don’t add 1 percent directly to your property and no one has announced anything other than 1 percent yet.
Chris Dunagan reported:
“But the 2008 budget could still be out of balance by $2 million without staff cuts.”
Avery said the county’s estimated banked capacity is about $1.8 million.
The long-term impact, however, will depend largely on the Legislature. In our calls to local legislators the support for the 1 percent cap was pretty strong. It wasn’t unanimous, but it was strong. Tim Eyman kind of chuckled when I told him about my conversations with local legislators. He said the only legislator who mattered was House Speaker Frank Chopp. “Frank Chopp decides everything,” he said. The speaker has not commented.
The governor called for “a cap,” which doesn’t mean 1 percent. As I wrote in my story, Eyman said he’d consider crafting another, more restrictive, initiative if the Legislature does anything other than put 747′s limits back in place.
The 5-4 court decision is based on the fact that the ballot measure told voters they were dropping the cap from 2 percent to 1 percent. In coming to that conclusion, the majority cited a previous case, Washington Association of Neighborhood Stores v. State of Washington, which included:
“Citizens or legislators must not be required to search out amended statutes to know the law on the subject treated in a new statute. Under article II, section 37, a new statute must explicitly show how it relates to statutes it amends.”
The majority took that statement and determined:
“Thus, a significant purpose of article II, section 37 is to ensure that those enacting an amendatory law are fully aware of the proposed law’s impact on existing law.”
There was included an argument in another case where the court upheld a 1994 law that amended a 1993 law that was later ruled unconstitutional. The majority reasoned that the earlier law had not yet been ruled unconstitutional, so the amendment could stand. In the case of 747, when voters went to the polls, the law they were amending in the ballot, I-722, had already been struck down.
So in parts of the ballot 747 told you that you were reducing the cap from 2 percent to 1 percent, when in fact you were reducing the cap from 6 percent to 1 percent.
“Here, if a voter simply read the text of the initiative, he or she would have understood that I-747 reduced the property tax levy limit from two percent to one percent. Simply put, a voter reading the text of the initiative would have perceived a much smaller impact on government coffers than would actually occur under I-747, a fact the dissent ignores. The text of the initiative misled voters about the substantive impact of the initiative on existing law.”
The majority argued that it’s the information on the ballot measure that matters and dismissed the argument that the voters’ pamphlet had the correct explanation. But the majority addressed the pamphlet and said it contained some of the same incorrect information than was on the ballot, so the pamphlet was ambiguous.
The court acknowledged that this kind of problem means those who would launch initiatives would have to wait until the courts had ruled before filing, but that waiting was better than having an eventually unconstitutional law on the ballot.
“Although we presume the validity of initiative measures and respect the right of Washington’s citizens to exercise this important privilege, article II, section 37 was designed to protect voters and legislators from confusing or misleading information and to maintain the integrity of the law-making process. Thus, where we must weigh delay for initiative proponents against constitutionally prescribed clarity for the voters, the constitution must prevail.”
The four dissenters responded:
“No reasonable argument can be sustained that voters were in any way misled or confused by the effect of I-747, which expressly and was specifically aimed at lowering the tax growth to one percent. The majority seems to suggest that the voters are unable to think or read for themselves, when in fact our democratic process is based on the assumption that voters do in fact read and understand the impact of their votes.”
Others have answered another question I’ve been asked a lot. Who were the judges?
The dissenters were Charles Johnson, Gerry Alexander, Richard Sanders and Tom Chambers.
The majority were Bobbe Bridge, Barbara Madsen and Susan Owens, joined by two pro tems, Stephen Brown and Teresa Kulik.
The pro tems were there because Justice Mary Fairhurst was in the AG’s office when it defended 722 and James Johnson helped with 747. They recused themselves from this issue.
The response I’ve seen in the papers and heard on the radio have almost all come from the outraged, people who argue, “The court thinks we’re stupid.” I agree that voters probably knew what they were doing. I would speculate that if the ballot measure had been worded correctly it would have changed so few votes as to not matter.
But I also wonder why there are so few people arguing that perhaps the court is right that the one place we should demand absolute accuracy is on a ballot or in a law.
I think the answer starts with what Bob Meadows wrote in a story comment: “The majority opinion shows why cynics say that supreme court opinions often start with a desired result and work backward to try to rationalize that result in the words of the opinion.”
It isn’t just the cynics who say it. “You must remember one thing. At the Constitutional level where we work, ninety percent of any decision is emotional. The rational part of us supplies the reason for supporting our predilections.” — Charles Evans Hughes, Chief Justice, US Supreme Court (1930-1941)
Frankly, you could argue that sentiment applies not only to the justices, but to many who have offered an opinion on their decision.