Lawsuit questions changes to tax initiative

OLYMPIA — A lawsuit that supporters say could unravel tax increases recently passed by the state Legislature was filed with the state Supreme Court yesterday.

The suit was filed by the Washington Farm Bureau and other groups after Secretary of State Sam Reed rejected a referendum that would let voters accept or reject recent changes made by the state Legislature to Initiative 601 tax and spending limits. Reed did so because lawmakers invoked an emergency clause when approving the I-601 bill, making it immune to ballot challenges.

Proponents, who need 112,507 valid signatures by July 23 to reach the November ballot, want the court to let the referendum move ahead. But they say there are also broader implications.

"There's certainly a possibility that a Supreme Court ruling in our favor could invalidate any taxes adopted by the Legislature in the last days," said Dean Boyer, a spokesman for the Farm Bureau. "We'd like to see that happen."

However, Hugh Spitzer, a Seattle attorney who teaches state constitutional law at the University of Washington School of Law, said the Farm Bureau case has "a very uphill battle." The courts have given lawmakers a lot of leeway in the past, he said.

Democrats, who control the House and Senate, made several changes to I-601, including suspending for two years a provision requiring a two-thirds vote to approve tax increases. The emergency clause let the law take effect immediately and allowed Democrats to pass about $400 million in tax increases with simple majority votes — without help from Republicans.

Other changes made by Democrats include a provision that allows state spending to grow at a faster rate than the initiative envisioned, starting two years from now. Republicans have argued the changes essentially gut I-601, which voters approved in 1993.

The state constitution lets the Legislature use an emergency clause when the law is necessary "for the immediate preservation of the public peace, health or safety, [or] support of the state government and its existing public institutions."

The Farm Bureau contends there was no true emergency when lawmakers revamped I-601 — Democrats used it to ease the passage of tax increases, and avoid a referendum.

"It's not an emergency just because you can't get the right number of votes," said Richard Stephens, a Bellevue attorney representing the Farm Bureau and others in the case.

"Here's something the people put into place by initiative and the Legislature undoes it and says the people don't get to vote on it."

The Washington State Grange, the National Federation of Independent Business, the Building Industry Association of Washington and the Evergreen Freedom Foundation joined the Farm Bureau in the case.

If the Supreme Court sides with the Farm Bureau, that would "cast a cloud over the legality of those tax increases," Stephens said. "They were passed with less than a two-thirds vote and this emergency clause really wasn't valid."

Spitzer said such a decision by the court "would create a large mess." But he doesn't think that will happen.

The court has given lawmakers broad discretion in determining what constitutes an emergency since a similar case went before the court in the mid-1990s after lawmakers approved a financing package to build a new ballpark for the Seattle Mariners, Spitzer said. There was concern the team would be put up for sale unless the team got a new stadium.

Opponents tried to mount a referendum challenge but were blocked by the use of an emergency clause. The court ruled the Legislature had the right to declare it an emergency.

"Generally, since the stadium case, legislative bodies have had significant flexibility in declaring emergencies," Spitzer said. "It's relatively difficult to challenge an emergency clause today based on that case and some other cases."

Democratic lawmakers yesterday said they used an emergency clause because they had a budget to pass and there was no way the Republicans would help pass tax increases.

"We had to get the budget done and we needed to raise revenue to get the budget that we wanted to pass out. We couldn't wait," House Majority Leader Lynn Kessler, D-Hoquiam, said.

Andrew Garber: 360-236-8268 or agarber@seattletimes.com