Bottom-Up Rumblings On Washington Taxes

Cities and counties in Washington have been taking a more active role in establishing new rules of the game on tax policy. Two of those jurisdictions are the cities of Spokane, and Spokane Valley. Seen here: The Spokane River. Photo: spokaneriver.net

Turning heads statewide recently was the unanimous decision by the seven-member City of Spokane Valley to enact a new hurdle for that body to be able to raise local taxes. Now required will be a supermajority, consisting of a simple majority plus one. The City is the fourth local jurisdiction in Washington to enact some sort of supermajority tax hike standard for elected bodies, after Spokane and Yakima, and Pierce County.

At the same time, continued attempts to institute a two-thirds supermajority for tax hikes enacted in the legislature have won statewide approval from voters, but have been consistently overturned by lawmakers or the State Supreme Court. Gradually, frustrations and work-arounds are bubbling up from the local level.

Mixed Results On Election Day

When tax decisions are directly in their hands, Washington local voters are fairly trusting. On the November 8 ballot in Washington, there were 116 local and regional measures whose titles explicitly indicated an attempt to enact a tax or levy, issue bonds or create a new taxing district.

Of the 108 measures which were not school bonds, thus requiring only simple majorities, 85 passed or appear to be passing, and 22 were failing, with one tied. Of the eight school bond measures, requiring a 60 percent voter supermajority, six were passing and two were not.

One especially prominent ballot measure, for an expanded Sound Transit system, required only a simple majority and got it, but fell short of 60 percent. The $54 billion Sound Transit 3 proposal was approved in King, Snohomish and Pierce counties, 55 percent to 45 percent.

Also on Election Day, Olympia Measure 1 to enact a local progressive income tax, was defeated 55 percent to 45 percent. Proponents had hoped it would win approval and be challenged up to the state high court. This might have cleared a blocked legal pathway, so lawmakers could try to enact a progressive income tax targeting higher earners by income level. Such an attempt would have been a long shot, however, given the make-up of the fiscally conservative Senate Majority Coalition.

Resisting The Will of Voters

Since 1993, Washington voters have approved five initiatives requiring a two-thirds majority vote in the state legislature. All of them have been overturned either by the legislature or the State Supreme Court.

The most recent measure approved by voters which encompassed the issue of two-thirds majority for legislative tax hikes was Initiative 1366, last year. It forced the legislature to choose between reducing sales taxes by one percent or allowing a public vote on a two-thirds provision. However, it was challenged legally and in May 2016 the State Supreme Court ruled invalidated I-1366 for violating the state Constitution’s single-subject rule.

Although a December 2015 poll found 65 percent of voters want the legislature to send them a constitutional amendment to vote on establishing the two-thirds rule, it is “probably impossible” that will happen for now, according to Sen. Mike Padden (R-4).

‘The Start Of A Groundswell’

The Supreme Court’s I-1366 ruling was an impetus for the recent action in Spokane Valley, said Mayor Rod Higgins. “Call it the start of a groundswell,” he said. “Folks are saying ‘How do we get around that?’”

Higgins added, “The state mandates a lot of things that they don’t fund, which then throws the onus back on us to find the money to comply. Quite often that is a tax increase, and this is one of the ways that puts a damper on that.”

The view is shared by Padden, who represents Spokane Valley. He told Lens a supermajority requirement is “something that people want” and making their local government adhere to that standard “is one other outlet” to express that demand.

‘Voters…Concerned With Overspending’

“Voters are concerned with overspending at all levels of government, but especially the state government,” Padden added. “They would like to make sure that taxes aren’t imposed…without a lot of hard thought and support of two-thirds of the legislature.”

In 2013, Spokane became the first city in Washington to require a supermajority vote for new taxes, of a majority-plus one. It was followed by Yakima, with its own majority-plus-one rule. The Pierce County Council in 2012 adopted a two-thirds supermajority rule for tax hikes it votes upon.

All measures were first approved by their respective councils and later by voters. The Spokane Valley supermajority rule will not need voter approval.

Lower Taxes Fuel Growth

Spokane Valley City Councilmember Ed Pace said the best way to increase government revenue is by keeping local taxes low to attract more business. This increases the overall tax base with without imposing additional tax burdens, he added.

“Sometimes we have to impose taxes or raise taxes, but we’d rather do that only as a last resort,” he said. “We’re pro-growth but we want to fund (government) growth by (economic) growth.”

Jason Mercier believes growth of supermajority requirements for new local taxes “could be the catalyst for this becoming a statewide issue.” He is the Washington Policy Center’s Eastern Washington director. Mercier told Lens that “if more local government officials operate underneath this policy” and are later elected to the legislature, adopting a similar rule for the state “should be less of a concern for them.”

There are pockets of resistance locally. The Washington State School Administrators Association represents the 1,477 school board members in the state. One of their priorities is legislation to allow school bond measures to pass by a simple majority, rather than the 60 percent supermajority required under Article VIII, Section 6 in the State Constitution. The State Constitution was amended in 2007 allowing school levies to pass by a simple majority; although the amendment itself narrowly passed, by 50.61 percent.

During the 2015 legislative session, 44 Democrats and one Republican introduced HJR 4210 proposing sending voters a constitutional amendment proposal to create the same threshold for bond measures. It received a public hearing in the House Education Committee in 2015 as well as 2016 but never got an up or down vote.

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