Seattle streetlight tax illegal, court rules

OLYMPIA — A unanimous state Supreme Court today threw out a streetlight tax charged in Seattle and outlying cities by Seattle City Light.

The high court said the tax is illegal and unconstitutional, despite the Legislature's effort last year to remove the legal cloud over the practice.

In late 1999, Seattle passed an ordinance shifting streetlight costs from the city budget to the light bills paid by City Light's customers.

Utility watchdogs objected, eventually enlisting the state auditor and the attorney general to agree that it is an illegal tax. The city got the Legislature to approve a bill that was supposed to clear up the problem. King County Superior Court sided with Seattle as a result.

The legislation sought to affirm that cities may charge ratepayers for operation of fire hydrants and streetlights as part of the water and electric utilities, respectively.

Seattle has been charging ratepayers, rather than the city coffers, as have Burien, Lake Forest Park, SeaTac, Shoreline and Tukwila, all franchise customers of City Light. All were party to the appeals.

In an opinion written by Justice Mary Fairhurst, a revenue expert, the court threw out the tax on several grounds.

City budgets should cover streetlight costs, the court said, not addressing the question of hydrants, which haven't been challenged in state audits before now.

"Providing streetlights is a governmental function because they operate for the benefit of the general public and not for the comfort and use of individual customers," the court said. "City Light customers have no control over the provision and use of streetlights."

Streetlight charges are taxes, not a fee for direct service, and the utility has neither constitutional nor statutory authority to impose a tax, the court said.

Despite the 2002 legislation, Fairhurst wrote: "The charge for maintaining streetlights is still a tax, because shifting the streetlight costs to City Light ratepayers is still designed to raise revenue for the general city budget.

"There is also no relationship between the electricity used by a City Light customer and the energy used by streetlights."

The court didn't address the question of rebates. In the original lawsuit, the watchdogs asked for a refund of more than $12 million, estimating checks of between $15 and $30 per household.

City Light did not immediately return calls for comment.

The case is Rud Okeson et al v the City of Seattle, No. 73227-2.