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Tuesday, February 11, 2003 - Page updated at 12:00 AM

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Judge tosses out $30 tabs

Seattle Times staff reporter

Initiative 776, the $30 car-tab measure approved by voters last November, is "unconstitutional in its entirety," King County Superior Court Judge Mary Yu ruled yesterday.

The decision marks the third time in four years that an initiative sponsored by anti-tax advocate Tim Eyman has been tossed out on the same grounds — that he tried to pack too much into one measure.

"We fundamentally disagree. We are extremely careful with our drafting," a disappointed Eyman said after the ruling. He promised an appeal to the State Supreme Court.

Yu's ruling means the state Department of Licensing will continue to collect motor-vehicle excise taxes and fees above $30 in King and Pierce counties and for the Sound Transit district.

In ruling the measure unconstitutional, Yu found it improperly linked two subjects: $30 license tabs and a call for a revote on Sound Transit's light-rail system.

Though another vote on the rail project was not required under the initiative, Yu said, the fact that voters might have been confused into thinking it did meant I-776 violated the state constitution's "single-subject" rule, which limits laws to a single subject.

"It's irrelevant whether the second subject was precatory (not mandatory) since the voter had no choice but to vote for both of these proposals regardless of whether a court would impose a mandatory obligation," Yu said.

"By tying them together, this initiative was able to combine the votes of voters who favored $30 tab fees with the votes of those who oppose Sound Transit's light rail project."

Eyman called that conclusion absurd. "Voters are smart enough to understand what our initiatives do," he said.

But Thomas Ahearne, attorney for King and Pierce counties, who challenged the law in court, suggested yesterday that Eyman only included the Sound Transit reference in the initiative to win votes in King County — something Eyman flatly denied.

"She enforced the constitution," Ahearne said of Yu. "This is a perfect example of why we have the single-subject rule."

Initiative 776 would have limited car tabs to $30 a year statewide. One of its targets was Sound Transit, whose projects are financed in part by a 0.3 percent motor-vehicle excise tax.

The initiative also aimed to repeal $15 annual vehicle-licensing fees charged by King, Pierce, Snohomish and Douglas counties to support road projects.

In what Eyman acknowledged was a reference to Sound Transit, the first section of I-776 read, "Dramatic changes to transportation plans and programs previously presented to voters must be resubmitted."

During the campaign, Eyman wrote that passing I-776 would "ensure" a revote on light rail.

The measure passed narrowly statewide, but failed in King County. Tacoma and Sound Transit joined King and Pierce counties in challenging the initiative in court.

In addition to their "single-subject" argument, I-776 opponents asserted the initiative was unconstitutional because it violated the "impairment of contract" clause of the state constitution, which says no law can interfere with a legal contract.

Sound Transit has sold bonds that are being repaid partly with proceeds of the agency's motor-vehicle excise tax. Sound Transit said stopping that money would cause an unlawful impairment of contracts with bond holders.

That's the subject of another lawsuit before a Snohomish County judge, and wasn't really an issue in the case before Yu. But other bonds sold by King County were very much in dispute.

The county sold road bonds a month before the November vote and backed them with the $15 annual vehicle-licensing fee wiped out by I-776. King County has said the timing of the bond sale just before the vote was coincidental, but Eyman said he was suspicious that it was designed to circumvent I-776.

Because the county told those who purchased the bonds that it had other means to repay them if the $15 fee was erased, I-776 didn't interfere with contractual obligations, Eyman's attorney asserted.

But Yu found the county bonds did constitute a constitutionally-protected contract. "The $15 fee pledged by King County is pledged as collateral," said Yu. "As such, it is part of their contract with the bond holder."

While the lawsuit was pending, Yu had authorized the state Department of Licensing to continue to collect the $15 vehicle-registration surcharge in King and Pierce counties. The money is being held in a special fund and will now be released to the counties.

In December and January, the state Department of Licensing collected about $3.5 million for the two counties. Snohomish and Douglas counties didn't challenge the initiative and have stopped collecting the fee. Snohomish County repealed it Nov. 20, soon after the election was certified.

Officials there weren't certain the court's decision would change anything anytime soon.

"I believe that we would have to deliberate on that," said Snohomish County Council Chairman Gary Nelson, R-Edmonds. "Even though the court defined something as unconstitutional, the expression of intent by the electorate has a certain importance to this council."

Roger Neumaier, budget analyst in Snohomish County Executive Bob Drewel's office, said reinstating the $15 fee would be premature because there might be appeals.

The initiative "leaves us in a real position of need," he said. "That being said, the voters have spoken, and it leaves us in a difficult position."

Councilman Jeff Sax, R-Snohomish, said he wouldn't support any effort to reinstate the fee.

"As far as I'm concerned, it's a done deal," he said.

Courts have struck down two of Eyman's previous initiatives, 695 and 722, on grounds they violated the "single-subject" rule. Attorneys for the counties challenging I-776 were banking that Yu, a former King County prosecutor, would agree that I-776 had the same flaw.

Initiative 695, which called for $30 car tabs, was ruled unconstitutional because it also tried to impose a public vote on every fee and tax increase statewide. But the Legislature, saying it wanted to heed the will of voters, quickly replaced the motor-vehicle excise tax with a flat, $30 car-tab fee.

Many people hated the annual excise tax, which had been in place since 1937, because it was based on the age and value of a vehicle, so new, expensive cars were taxed the most.

However, lawmakers did not repeal the law that allowed Sound Transit voters to approve their own car-tab tax, or the statute that allows counties to charge a $15 fee. That was what Eyman was targeting with I-766.

Initiative 722 would have limited the growth of property-tax levies and eliminated a variety of local fees and taxes. The courts slapped the dual measure down, but Eyman came back with I-747, a property-tax limitation more carefully written to avoid legal challenge. Voters approved it in 2001.

Assistant Attorney General Jim Pharris, who defended I-776 in court, said he would study the ruling before deciding on an appeal. "It probably deserves an appeal," he said.

Mark Kimball, attorney for Eyman's Permanent Offense, said he was troubled by the ruling, particularly the suggestion that voters were confused.

Joni Earl, executive director of Sound Transit, said she was relieved by the ruling. "We need to continue to build the project," she said of Sound Transit's proposed 14-mile light-rail line from downtown Seattle to Tukwila.

"This is a big win for the economy and quality of life for this region," said King County Executive Ron Sims, who also chairs the Sound Transit board. "We had an obligation to stand up for the people in this region who desperately need transportation solutions."

Snohomish County bureau reporter Emily Heffter contributed to this report.

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