Judge overturns Eyman initiative on property tax

A King County Superior Court judge has tossed out an initiative by anti-tax guru Tim Eyman, finding that I-747, passed by voters in 2001, was unconstitutionally deceptive.

The initiative, which voters approved overwhelmingly, limited property-tax growth to 1 percent a year.

But Judge Mary Roberts ruled Tuesday that voters had been told they would be reducing the tax-increase cap to 1 percent from 2 percent, although the initiative actually was reducing the cap from 6 percent to 1 percent.

An earlier Eyman initiative, I-722, had put a 2 percent limit on property-tax increases.

But that was found unconstitutional months before voters approved I-747. Roberts ruled that in 2001, voters were incorrectly told I-722 was being amended when it no longer was law.

"When I-747 went to the voters on Nov. 6, 2001, the voters were incorrectly led to believe they were voting to amend I-722," Roberts' ruling says. "They were incorrectly led to believe they were voting on a change in the tax increase cap from two percent to one percent. Instead, they were voting on a change from six percent to one percent.

The voters were misled as to the nature and content of the law to be amended, and the effect of the amendment upon it. The constitution forbids this."

She said that in February 2001, nearly nine months before I-747 was sent to voters, lower courts struck down I-722 as unconstitutional.

In September, the ruling was affirmed by the state Supreme Court. "Once a law has been found to be invalid, it becomes as inoperative as if it had never been passed," Roberts said.

The initiative forced King County to cut $135 million from its budget in the past five years, said Kurt Triplett, chief of staff for King County Executive Ron Sims. He said the county made "deep tough cuts" in human services, parks, pools and health care.

Eyman said he was disappointed by the ruling and thinks it will be overturned by the state Supreme Court.

"Obviously we got an incorrect ruling," he said. "[Roberts] said voters were misled. That's not true because the ballot title said this would be a 1 percent limit. Voters knew they were voting for a 1 percent limit.

"What we're being penalized for is not predicting how the high court would rule on the law [in I-722]. We drafted the initiative as the law existed at the time."

The state could ask the court to stay the opinion, pending an appeal, which would leave the 1 percent cap in effect.

Eyman had sponsored two previous successful initiatives that reduced vehicle taxes. I-695, approved by voters in 1999, led to repeal of the state's motor-vehicle excise tax and put in its place a flat fee of $30 for most cars.

I-776, passed in 2002, outlawed optional county vehicle-license fees and extended the $30 state fee to light trucks.

I-695 was found unconstitutional, but legislators enacted the cut anyway. I-776 was found unconstitutional in lower courts but was upheld by the state's high court.

I-747, the earlier tax cap, was challenged by Whitman County and several statewide organizations, including Futurewise, Washington Citizen Action and the Welfare Rights Organizing Coalition.

When the lawsuit was filed last year, Whitman County Commissioner Greg Partch said I-747 was going to cause several of the county's taxing districts to go broke. Whitman and King were the only counties where voters rejected the initiative.

Attorney Knoll Lowney, who represented the groups challenging I-747, said the state Department of Revenue projected it would reduce state and local government revenue by $500 million in 2007.

"The court's decision is a critical victory for our public-school system," Lowney said.

"The court confirmed that Eyman made false promises in pushing Initiative 747. He talked about giving taxpayers more rights but really was stealing money from our schools, fire districts and hospitals. This initiative was passed because of Mr. Eyman's deception."

Assistant Attorney General Jim Pharris, who defended the initiative in court, said no decision has been made about whether to appeal the ruling.

Susan Gilmore: 206-464-2054 or sgilmore@seattletimes.com