Washington State Tax Initiative Overturned

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PHOENIX - A King County, Wash. Superior Court judge has struck down a voter-approved ballot measure that would have lowered taxes unless the legislature adopted a new constitutional amendment giving more control of tax increases to voters.

Judge William Downing issued a ruling Jan. 21 that invalidated Initiative 1366, which voters narrowly approved last November. The initiative would have sliced the state sales tax from 6.5% to 5.5% unless the legislature allows a statewide vote on a constitutional amendment that would require a two-thirds supermajority of state lawmakers to approve tax increases. Similar measures are in already in place in some other state constitutions. Downing found that the initiative violated the Washington Constitution by imposing a constitutional amendment on the legislature.

Gov. Jay Inslee said in a statement that he was glad the court ruled quickly so that the legislature could focus on mandatory K-12 spending it needs to come up with under a previous state supreme court case, McCleary v. Washington.

"Today's ruling is not unexpected and ensures the legislature can continue focusing on the necessary priorities of this year's short session relating to McCleary, the state's teacher shortage and funding for mental health and wildfires," the governor said. "I appreciate the court's expeditious review of the case so legislators aren't distracted by the uncertainty of the initiative's impact."

Hugh Spitzer, a bond lawyer in the Seattle office of law firm Foster Pepper and a visiting professor at the University of Washington School of Law, said that the decision was expected and that the Washington Supreme Court is likely to review it later this year.

"No surprises at that Superior Court decision," Spitzer said. "The State Supreme Court had earlier hinted that it was leaning in that direction. I expect that the case will be appealed, so the Supreme Court will get an opportunity to look at the issue in depth and rule on it.

"However, it would be surprising if the Supreme Court heard oral arguments very quickly, or issued an opinion earlier than this fall," Spitzer said. "It would also be surprising if the Supreme Court came out differently than the Superior Court. From a practical standpoint, this recent ruling somewhat lessens the pressure on the state legislature this session. The legislature has to deal with school funding, and this initiative didn't help any."

An impact study conducted by the state determined that the tax decrease specified in the initiative would have sliced sales tax revenue for the state General Fund would by about $8 billion over the next six fiscal years.

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