747 Supreme Aftermath

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.

4 thoughts on “747 Supreme Aftermath

  1. Steven,

    Thanks for your excellent analysis.

    You wrote, “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.”

    Maybe, so few people are arguing because not many have access to or have done the analysis required to see the majority’s dictum.

  2. Good piece, lots of work.
    I too caught your comment: ” 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.”

    The reality is that Jim Johnson and probably Mary Fairhurst would have sided with the minority opinion thus making it the majority.

    The court obviously isn’t always right and if what is right were blatant, we wouldn’t be having 5-4 splits so often. You might say the court barely knows what it’s doing in those cases.

  3. Steven, I think an old state supreme court opinion provides one answer to what you wonder about when you say: “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 noticed that the opinion issued on Nov. 8, 2007, said that the purpose of Article II, section 37, is “to avoid fraud or deception” (pg. 10), and stated another way, “to protect those who are to vote on amendatory legislation from fraud and deception” (pg. 21).

    I wondered where the “fraud and/or deception” came from, and found it by checking some of the older cases cited in the recent opinion.

    It comes from a state supreme court opinion issued back in 1910.

    Here is the relevant quote from that very old case about the purpose of Article II, section 37: “to protect the members of the legislature and the public against fraud or deception; not to trammel or hamper the legislature in the enactment of laws.” Spokane Grain & Fuel Co., v. Lyttaker, 59 Wash. 76 at 82 (1910).

    The rule about setting forth the law being amended isn’t a demand for perfection, since perfection is a tough thing to achieve.

    It’s a rule that is intended to prevent intentional trickery and deceit in the enactment of changes to our laws.

    Wouldn’t most people who can set aside, for the sake of discussion, their desire for higher or lower property taxes be able to admit that no “fraud or deception” was involved in this particular instance?

    Ironically, if the court in 2001 had behaved the way the court in 2007 did, the opinion tossing out I-722 would have been issued two days after the election in 2001 — and I-747 couldn’t have been thrown out this week by the supreme court.

    In 2001, the supreme court heard oral arguments on June 12 and issued its opinion tossing out I-722 on September 20 — a little more than 6 weeks before the election in which I-747 was approved to take the place of I-722.

    This year, the court heard oral arguments on I-747 on May 8 and issued its opinion tossing out I-747 on Nov. 8 — two days after the election, not six weeks before.

    A few weeks’ difference in timing shouldn’t make any difference, unless there really has been “fraud or deception.”

    Of course, there has been no “fraud or deception.” The best the supreme court could come up with was the opinion that some voters could have been “misled.”

    Horsefeathers. As the majority opinion noted, the people who could have been misled would be the ones who didn’t read the ballot title (which wasn’t misleading), the explanatory statement prepared by Attorney General Gregoire’s office (which wasn’t misleading), the arguments for, and the arguments against.

    To be “misled,” this hypothetical voter would ignore all news reports for an entire year — and forget how he voted in November of the previous year.

    This voter would read one thing and only one thing — the part of the text of I-747 where “two” was struck through with a line and “one” was put in its place.

    That’s some voter.

  4. An outstanding assessment written by Bob Meadows! (I purposely avoided calling Meadows’ response an “opinion” as I would not want to confuse his words of wisdom with those of the State Supreme Court.)

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