WPC: WA Property Tax Increase Bill Introduced

From the Washington Policy Center comes Just in time to avoid 2/3 vote requirement, new property tax increase bill introduced

It must be the last two weeks of the session. Yet another bill to overturn a voter-approved law was introduced just today. This one is a massive property tax increase with 20 Senate sponsors. Under the title “Providing state and local property tax reform,” SB 5770 would change the voter-approved property tax growth factor for the state and local governments from 1% to 3% while also changing the definition of inflation to grow faster by using the CPI instead of IPD measure.

And just for fun, the new tax increase bill was introduced just outside of the 10-day window under the constitution that would have required a 2/3 vote to advance the bill. Per Article 2, Section 36 of the state constitution:

“No bill shall be considered in either house unless the time of its introduction shall have been at least ten days before the final adjournment of the legislature, unless the legislature shall otherwise direct by a vote of two thirds of all the members elected to each house, said vote to be taken by yeas and nays and entered upon the journal, or unless the same be at a special session.”

At least SB 5770 was introduced as a complete bill instead of the prior practice of using a blank Title Only bill to get around the 2/3 vote restrictions. The Senate Rules adopted earlier this year banned the use of Title Only bills.

After decades of following policy debates in Washington, I’ve learned that you need a specialty state-specific dictionary to understand legislative phrases. Words mean different things here. For example: An income tax in Washington means “excise tax” and “balancing the tax code” means increasing the property tax for everyone.

WPC: State law requires Governor to issue across the board budget cuts if cash deficit projected

From the Washington Policy Center, State law requires Governor to issue across the board budget cuts if cash deficit projected, addressing tax shortfalls from COVID lockdowns in Washington State.

There are two legal options to respond to a state budget deficit: 1) The Governor orders across the board budget cuts, or 2) A special session of the legislature occurs liquidating the deficit. The first is a blunt instrument allowing no thoughtful response. The second provides the people’s legislative branch of government the opportunity to deliberate a more surgical response. The Governor, however, has made it clear he doesn’t plan to call a special session to allow lawmakers to meet to balance the budget. No special session leaves the obligation for the Governor required under RCW 43.88.110(7):

“If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods.”

According to RCW 43.88.270:

“Penalty for violations. Any officer or employee violating, or wilfully refusing or failing to comply with, any provision of this chapter shall be guilty of a misdemeanor.”

Unless the Governor is now saying a cash deficit isn’t currently projected in the general fund, it is unclear why he believes this budget law doesn’t apply to him. Here is what Governor Gregoire did in 2010 when complying with this same legal requirement:

“ . . . WHEREAS, the anticipated revenues combined with the beginning cash balance of the general fund are insufficient to meet anticipated expenditures from this fund for the remainder of the current fiscal period; and . . .

WHEREAS, state law authorizes and directs the Governor to implement across-the-board reductions of allotments of appropriations to avoid a projected cash deficit . . .

NOW, THEREFORE, I, Christine O. Gregoire, Governor of the state of Washington, pursuant to chapter 43.88 RCW do hereby order: The allotment of each appropriation from the State General Fund will be reduced effective October 1, 2010, by an amount necessary to avoid a cash deficit in the State General Fund.”

The requirements of RCW 43.88.110(7) are based on the cash projection in a single account. This means when evaluating if a cash deficit is projected, you can’t assume balances in other accounts or the state’s emergency reserves. Accessing fund balances in other accounts, including the emergency reserves, requires an appropriation from the legislature.

If the Governor is not going to call a special session to allow the legislature to act, there is one simple question he needs to answer: Is a cash deficit currently projected for the general fund?

WA Policy Center: King County Judge Upholds Most of I-976

From Washington Policy Center on the present fate of I-976 which passed in voting, but which state administration officials are fighting tooth and nail. I-976 put limits on motor vehicle taxes and fees and was supposed to take effect on Dec. 5, 2019, but has been on hold pending legal challenges.

King County Judge Marshall Ferguson dismissed all but two constitutional challenges to Initiative 976 today.

Notably, he declared that the plaintiffs did not satisfy the burden of providing beyond a reasonable doubt that I-976 violates single-subject rule or subject-in-title rule, both in Article II Section 19 of the Washington Constitution.

The court noted the ballot title is “general, not restrictive.” The initiative broadly addresses motor vehicle taxes and fees in the title, and the court agrees that Sections 2-11 and 13 of the initiative directly address motor vehicle excise taxes.

The arguments given by plaintiffs that the initiative violates the subject-in-title rule also failed to establish a violation. The court asserted that per previous case law, an initiative ballot title “need not be an index to the contents, nor must it provide details of the measure.” The initiative’s ballot title provided “sufficient notice that the initiative repealed vehicle-related taxes and fees.”

Other constitutional violation claims that were thrown out include:

The two that remain, and are why the initiative remains on hold, are claims under Article I Section 12 and Article I section 23 of the state Constitution, “regarding [Kelley Blue Book] and Burien bonds.”

The first claim has to do with government using the private company Kelley Blue Book valuations, which are a proprietary product, to determine vehicle-related taxes. Plaintiffs argued that calculating car tabs based on Kelley Blue Book values would require the state to contract with the company and would “grant…special contractual privilege to a corporation,” which would violate Article I Section 12. Whether that is true requires additional discovery.

Interestingly, the state already uses Price Digests, as well as Kelley Blue Book and National Auto Dealers Association values for vehicles and boats to establish if they are worth less than the average fair market value. Surely this doesn’t require a contract between DOL and these various companies?

The second claim regarding the City of Burien pertains to whether I-976 could impair their municipal bond contracts, which may or may not depend on revenue from the city’s Transportation Benefit District vehicle fees. Additional discovery has to be conducted to determine if bond contracts would, in fact, be impaired.

While these two issues remain outstanding, the initiative remains on hold and people will continue to be charged high car tab taxes and fees. We anticipate there will be appeals and will continue to track this issue and its impact on the state transportation budget now being developed at the legislature.

Vote Out WA State Senator Curtis “Tax” King

From Glen Morgan at We the Governed:

In Washington State’s 14th legislative district, a tax rebellion is growing against Republican State Senator Curtis King, acknowledged architect, author, and champion of Washington State’s most recent gas tax increase. In November, local voters will have an opportunity to demonstrate whether this rebellion will have an impact at the ballot box.

Sen. Curtis King (R-14) was very happy about his gas tax bill

Washington’s 14th legislative district is mostly rural containing all of Klickitat and Skamania Counties, as well as a large portion of Yakima County and a small slice of Clark County. The City of Yakima is the largest city in this legislative district. Senator Curtis King was born in Yakima, and 2016 is the first re-election where he has an opponent on the ballot. King was originally elected to the position when the previous state senator retired early and King defeated the appointed incumbent in 2007. He was elected in 2008 and 2012 unchallenged by anyone. This year is different.

King’s unpopular tax hike invites challenge

In 2016, King faces an opponent from his own party. Challenger Amanda Richards is a 14-year resident from Klickitat County running as an “Independant GOP.” King’s well publicized championing of the largest gas tax increase in Washington State history (SB 5987) was a large part of the motivation for Richards to challenge him this election year.

As chairman of the State Senate Transportation Committee, Senator King was able to push through the 11.9 cents per gallon tax increase, which ensures Washington State drivers pay the second highest gas tax in the nation at 49.4 cents per gallon (Pennsylvania’s drivers pay 50.3 cents per gallon). When the Federal gas tax of 18.4 cents per gallon is included, Washington State’s drivers pay 67.8 cents per gallon of fuel every time they fill up at the pump. This might be chump change to politicians and bureaucrats in Olympia, but to average citizens it adds up quickly to take a real bite out of a family’s budget.

Unlike most states, Washington voters have an opportunity to vote on tax increases (thanks to initiative 960). These votes are called “advisory votes” and they serve as an opportunity for voters to register their support or opposition to tax increases passed by the legislature and the governor. Based on the advisory vote totals from 2015 (64% voted to repeal the tax increase state-wide) , voters strongly opposed this gas tax hike and in Senator King’s district, the opposition was even more pronounced at( 77% to repeal in Yakima, 76% to repeal in Skamania, 75% to repeal in Klickitat) .

King knows better than the children who voted for him

Throwing fuel on this fire of tax hike opposition, Senator King went on a King5 interview in February of last year and compared the voters in his district to “children” who need discipline. Not surprisingly this quote has fueled some of the growing opposition to Senator King, and this audio clip was featured in a video created by the Richards campaign…

Read the entire article at We the Governed by clicking here.

Tax Reform Roundtable, Prosser, Oct. 18, 2017

Congressman Dan Newhouse will be holding a tax reform roundtable meeting in Prosser on October 18, 2017 from 10:00 am – 11:00 am at the Walter Clore Wine & Culinary Center, 2140 Wine Country Road, Prosser, WA 99350. With tax reform on the horizon, he believes it is important to hear from community leaders and local elected officials about how the tax code affects families and businesses in the 4th Congressional District. RSVP is needed. Please see the attached PDF file for RSVP information.

Click here for Tax Reform Roundtable pdf file