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Initiative 722 - Eight Cities Complaint
Not an official copy.
[Note: November 21, 2000 letter from the Thurston County Superior Court’s Judicial
Administrative Officer, John Sleeter, states that the three previously filed cases
involving I-722 have been assigned to the Honorable Christine A. Pomeroy, and
that "Judge Pomeroy will also be assigned to any other cases involving I-722
that are filed in or moved to this county."]
SUPERIOR COURT OF WASHINGTON FOR THURSTON COUNTY
CITY OF AUBURN, a municipal corporation and political subdivision of the State
of Washington; CLARK COUNTY, a municipal corporation and political subdivision
of the State of Washington; BEN GASSAWAY, Clark County Assessor, in his official
capacity only; CITY OF COLFAX, a municipal corporation and political subdivision
of the State of Washington; CITY OF ENUMCLAW, a municipal corporation and political
subdivision of the State of Washington; CITY OF KENT, a municipal corporation
and political subdivision of the State of Washington; CITY OF MOUNTLAKE TERRACE,
a municipal corporation and political subdivision of the State of Washington;
CITY OF OAK HARBOR, a municipal corporation and political subdivision of the
State of Washington; SKAMANIA COUNTY, a municipal corporation and political
subdivision of the State of Washington; CITY OF STANWOOD, a municipal corporation
and political subdivision of the State of Washington; TOWN OF STEILACOOM, a
municipal corporation and political subdivision of the State of Washington;
CITY OF STEVENSON, a municipal corporation and political subdivision of the
State of Washington; and CITY OF UNIVERSITY PLACE, a municipal corporation and
political subdivision of the State of Washington; Plaintiffs, v. FREDERICK C.
KIGA, Director, Washington State Department of Revenue, in his official capacity
only; and STATE OF WASHINGTON; Defendants.
No. 00-2-02232-5
COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF
["Auburn Complaint"]
Plaintiffs allege as follows:
INTRODUCTION & SUMMARY OF THIS SUIT
1. Introduction. This suit concerns Initiative Number 722 ("I-722").
That Initiative called for (1) nullifying and refunding increases in taxes,
fees, and monetary charges enacted after July 2, 1999, (2) reinstituting the
personal property tax exemption for motor vehicles, and (3) rolling back property
tax assessments to the level in effect on January 1, 1999 and instituting a
taxation scheme that redistributes property tax burdens from the owners of rapidly
appreciating property to the owners of property that is not rapidly appreciating
in value.
I-722 is scheduled to take effect on December 7, 2000.
Implementing I-722 on December 7, 2000 will cause substantial hardships and
inequity. It will significantly cut plaintiffs’ 2001 general fund revenues –
which will require significant cutbacks in the health, safety, and other services
that the plaintiffs provide to their citizens. It will also shift the plaintiffs’
property tax burdens from corporations and persons whose real estate holdings
have appreciated greatly these past few years to citizens owning property that
has not appreciated as much in that same time period.
These hardships and inequities cannot lawfully be imposed because I-722 is
unconstitutional. Plaintiffs accordingly file this action to secure an injunction
prohibiting the December 7, 2000 implementation and enforcement of I-722, and
a prompt declaratory judgment confirming that I-722 is unconstitutional, null,
and void.
2. Our Constitution Matters. One of the bedrock principles of government
in our nation is that all laws must comply with the Constitution.
That includes laws enacted through the Initiative process. As the Washington
Supreme Court recently confirmed in its decision striking down I-695, citizens
voting on an Initiative "are not superior to the written and fixed Constitution",
and thus they "must conform to the Constitution just as the Legislature
must do when enacting legislation." Over the years, courts have therefore
invalidated many Washington State Initiatives which violated the Constitution
– including:
- The Graduated Income Tax Initiative that passed by over 70%. Culliton
v. Chase (1933).
- The WW II Veterans’ Bonus Initiative that passed by 57%. Gilman v. Tax
Com’n (1949).
- The Death Penalty Initiative that passed by 59%. State v. Green (1979).
- The Anti-Pornography Initiative that passed by 55%. Jones v. Charboneau’s
(1980).
- The Anti-Busing Initiative that passed by 66%. Washington v. Seattle
School District (1982).
- The Campaign Reform Initiative that passed by 73%. Washington Fed’n of
State Employees v. State (1995)(portions struck down).
- The Term Limits Initiative that passed by 52%. Gerberding v. Munro
(1998).
- The Three-Strikes-You’re-Out Initiative that passed by 76%. State v.
Cloud (1999)(portions struck down).
- The $30 License Tab Initiative that passed by 56%. Amalgamated Transit
Union v. State (2000).
3. Safeguarding the Initiative Process. To safeguard the integrity and
fairness of the Initiative process in our State, our Constitution imposes some
basic requirements with which every Initiative must comply. For
example:
- Every Initiative in this State must present a single subject
instead of combining separate proposals in one Initiative. Article II, §19,
1st clause. This requirement protects the voters’ right to vote
"yes" on one proposal and "no" on the others, instead
of being forced to vote "yes" on all or "no" on all.
- Every Initiative in this State must have a ballot title that
discloses to voters what is buried in the fine print of that Initiative’s
text. Article II, §19, 2nd clause. This requirement protects voters’
right to know what they are voting on when they read the ballot title in the
election booth.
- Every Initiative in this State must identify for voters the
existing statutes that a "yes" vote will revise or amend. Article
II, §37. This requirement protects the voters’ right to know how the Initiative
they are voting on will change the laws already on the books.
I-722 violates each of these Constitutional requirements.
4. Promoting Fairness with respect to Taxation. To promote equality
and fairness among the citizens of this State, our Constitution also imposes
some basic requirements with respect to the collection of taxes and use of the
resulting public funds. For example:
- Our Constitution requires uniformity in real property taxes.
Article VII, §1. This ensures that citizens owning similar pieces of property
of equal value are taxed equally.
- Our Constitution bans gifts of public funds. Article VIII,
§§5 & 7. This ensures that once tax revenues are legally collected from
the citizenry as a whole, they are not then given away to be put in the pockets
of some.
I-722 violates each of these Constitutional requirements as well.
5. Upholding the Constitution. In short, I-722 violates many provisions
in our State Constitution. Plaintiffs therefore file this suit to secure a court
ruling that upholds and enforces our Constitution by declaring Initiative 722
unconstitutional and enjoining its December 7, 2000 implementation and enforcement.
PARTIES
6. Plaintiff City of Auburn. The plaintiff City of Auburn ("Auburn")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Auburn
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6a. Plaintiff Clark County. The plaintiff Clark County is a municipal
corporation and political subdivision of the State of Washington validly formed
and existing under the Constitution and laws of the State of Washington, and
has satisfied all conditions precedent to bring this suit. Clark County will
be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6b. Plaintiff City of Colfax. The plaintiff City of Colfax ("Colfax")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Colfax
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6c. Plaintiff City of Enumclaw. The plaintiff City of Enumclaw ("Enumclaw")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Enumclaw
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6d. Plaintiff City of Kent. The plaintiff City of Kent ("Kent")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Kent
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6e. Plaintiff City of Mountlake Terrace. The plaintiff City of Mountlake
Terrace ("Mountlake Terrace") is a municipal corporation and political
subdivision of the State of Washington validly formed and existing under the
Constitution and laws of the State of Washington, and has satisfied all conditions
precedent to bring this suit. Mountlake Terrace will be directly and adversely
affected if Initiative 722 is found to be constitutional or implemented commencing
December 7, 2000.
6f. Plaintiff City of Oak Harbor. The plaintiff City of Oak Harbor ("Oak
Harbor") is a municipal corporation and political subdivision of the State
of Washington validly formed and existing under the Constitution and laws of
the State of Washington, and has satisfied all conditions precedent to bring
this suit. Oak Harbor is a non-charter code city located in Island County. Implementing
I-722 on December 7, 2000, would cause substantial hardship and inequity. It
will significantly cut Oak Harbor’s 2001 general fund revenues—which will require
significant cutbacks in the health, safety and other services that Oak Harbor
provides to its residents. It would also require the refund of increased taxes,
marina fees, and other fees and charges adopted between July 2, 1999 and December
31, 1999.
6g. Plaintiff Skamania County. The plaintiff Skamania County is a municipal
corporation and political subdivision of the State of Washington validly formed
and existing under the Constitution and laws of the State of Washington, and
has satisfied all conditions precedent to bring this suit. Skamania County would
suffer substantial injury from the implementation of I-722. Skamania County,
including its assessor, treasurer, other officers and employees, will be directly
and adversely affected if required to implement I-722 with respect to all property
and taxing districts for which they assess and collect.
6h. Plaintiff City of Stanwood. The plaintiff City of Stanwood ("Stanwood")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Stanwood
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6i. Plaintiff Town of Steilacoom. The plaintiff Town of Steilacoom ("Steilacoom")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Steilacoom
will be directly and adversely affected if Initiative 722 is found to be constitutional
or implemented commencing December 7, 2000.
6j. Plaintiff City of Stevenson. The plaintiff City of Stevenson ("Stevenson")
is a municipal corporation and political subdivision of the State of Washington
validly formed and existing under the Constitution and laws of the State of
Washington, and has satisfied all conditions precedent to bring this suit. Stevenson
is a non-charter code city located in Skamania County. Stevenson would be directly
and adversely affected if the taxes, fees and other charges it adopted between
July 2, 1999 and December 31, 1999 were required to be refunded.
6k. Plaintiff City of University Place. The plaintiff City of University
Place ("University Place") is a municipal corporation and political
subdivision of the State of Washington validly formed and existing under the
Constitution and laws of the State of Washington, and has satisfied all conditions
precedent to bring this suit. University Place will be directly and adversely
affected if Initiative 722 is found to be constitutional or implemented commencing
December 7, 2000.
7. Plaintiff Ben Gassaway. The plaintiff Ben Gassaway ("Gassaway")
is the duly elected Clark County Assessor, and has satisfied all conditions
precedent to bring this suit. Gassaway will be directly and adversely affected
if Initiative 722 is found to be constitutional or implemented commencing December
7, 2000.
8. Defendants. The State of Washington is charged with defending the constitutionality
of I-722, implementing I-722, and enforcing the provisions of I-722. For example,
through its Department of Revenue and its Director, defendant Frederick C. Kiga,
the State is charged with valuing certain taxable property located within plaintiffs’
jurisdictional boundaries, exercising general supervision and control over the
administration of the assessment of property and the tax laws of this State,
over county assessors, county treasurers, and all other county officers in the
performance of their duties relating to taxation, including giving order and
direction to county assessors and any other county officers as to matters relating
to the administration of the assessment and taxation laws of this State, and
ensuring compliance with property tax levy limits under Chapter 84.55 RCW. The
State is also a proper party pursuant to RCW 7.24.110.
JURISDICTION & VENUE
9. Jurisdiction. This Court has subject matter jurisdiction over this
action pursuant to RCW 7.24.010 and .030 because this action presents a judiciable
controversy between the plaintiffs and the defendants regarding the parties’
rights and obligations under Initiative 722. This is an actual and existing
dispute within the meaning of chapter 7.24 RCW, between the parties with genuine
and opposing interests which are direct and substantial, a judicial determination
of which will be final and conclusive. This Court also has jurisdiction by virtue
of RCW 2.08.010, RCW 4.12.010 & .020(2), RCW 36.01.050, and RCW 7.40.010.
10. Venue. Venue for this action properly lies in this Court with respect
to the defendant State under RCW 4.92.010 with respect to the defendant Kiga
under RCW 4.12.020(2).
BACKGROUND
Initiative 695
11. Initiative 695. Initiative 695, commonly referred to as the "$30
License Tab Initiative", was enacted by approximately 56% of the voters
in the November 1999 general election. Initiative 695 proposed (1) limiting
license tabs to $30 and (2) requiring voter approval of increases in taxes,
fees, and monetary charges. In October 2000, the Washington Supreme Court issued
a decision declaring Initiative 695 unconstitutional.
Initiative 722
12. Submission of Initiative 722. The proponents of I-695 submitted
Initiative 722 to the Washington Secretary of State for inclusion on the November
2000 ballot before the Supreme Court issued its decision concerning the constitutionality
of I-695.
13. "Son of 695". Throughout the election campaign, the proponents of
Initiative 722 referred to Initiative 722 as "Son of 695".
14. Statewide November 2000 Vote. A majority of the Washington State
voters who voted in the November 7, 2000 general election voted in favor of
Initiative 722 ("I-722").
15. Ballot Title. The ballot title for I-722 was: "Shall certain
1999 tax and fee increases be nullified, vehicles exempted from property taxes,
and property tax increases (except new construction) limited to 2% annually?"
A true and correct copy of that Ballot title is attached as Exhibit A.
16.Initiative Text. The full text of I-722 is attached as Exhibit B,
and is incorporated into this paragraph as if fully set forth verbatim.
17. No Similar Measures. No measures with provisions similar to those
in I-722 were included on the November 7, 2000 ballot.
18. Effective Date. Unless enjoined, I-722 will take effect on December
7, 2000. Unless an injunction is issued, upon that effective date the defendants
are obligated to comply with, implement, and enforce that new law.
Impacts of December 7 Implementation of I-722
19. 1999 Tax Fee And Monetary Charge Increases. Certain plaintiffs have
collected increased taxes, fees and other charges adopted during the period
July 2, 1999 through December 31, 1999. In some cases, plaintiffs have provides
services (as opposed to goods) in exchange for the increased charges.
20. 2000 Property Tax Increases. Between July 2, 1999 and December 31,
1999, certain plaintiffs levied their regular property tax for collection in
2000. The levy exceeded by more than 2% the total regular property tax certain
plaintiffs levied for collection in 1999 and was certain plaintiffs’ highest
lawful levy during the preceding three year period.
21. 2001 Property Taxes. Certain plaintiffs levy in November or December
2000 regular property taxes for collection in 2001, and will be certifying their
property tax levy for 2001 to the Assessor in their respective jurisdictions
and directing the Assessor and Treasurer in their jurisdictions to fully collect
that 2001 property tax levy. The amount of the levy exceeds both the amount
of regular property taxes certain plaintiffs levied for collection in 1999 and
the amount of regular property tax certain plaintiffs levied for collection
in 2000.
22. Property Tax Reductions. Pursuant to the Director’s advice and direction,
unless enjoined, the Assessors in certain plaintiffs’ jurisdictions may be required
to certify an amount less than the lawful levy certain plaintiffs would otherwise
be allowed to levy for collection in 2001, and limit certain plaintiffs’ regular
property tax levy to an amount no greater than 2% higher than the levy for collection
in 1999 plus new construction.
23. 2001 Levy Timing. Pursuant to the Director’s advice and direction,
unless enjoined, the Assessors in certain plaintiffs’ jurisdictions may be required
to disregard the fact that certain plaintiffs levied their taxes for collection
in 2001 before I-722’s effective date.
24. Refunds. Unless enjoined, certain plaintiffs and the Assessors and
Treasurers in certain plaintiffs’ jurisdictions may be required by the Director’s
advice and direction to, upon request, refund pursuant to I-722 that portion
of property taxes found to be a "tax increase" adopted between July
2, 1999 and December 31, 1999 by any taxing district within certain plaintiffs’
jurisdictions.
25. 2001 Levy Cuts. Based on the Director’s advice and direction, unless
enjoined, the Assessors in certain plaintiffs’ jurisdictions may be required
to limit levies for 2001 collection to 102% of the amount of the regular property
tax levied for collection in 1999, rather than allow up to 106% of the amount
of regular property taxes levied for collection in 2000, or even 102% of the
amount of regular property taxes levied for collection in 2000.
26. Bonds. Certain plaintiffs have issued and sold Bonds, to which some
of the increases taxes, fees, and monetary charges adopted between July 2 and
December 31, 1999 are pledged.
27. 2001 Levy Impact. If fully implemented as written on December 7,
2000, I-722 will prevent the Assessor and Treasurer in certain plaintiffs’ jurisdictions
from collecting the 2001 property tax levy already approved by certain plaintiffs
and certified to the Assessor in their jurisdictions, and will require the recalculation
of the levy lids and levy amounts to be significantly lower.
28. Significantly Cutting Plaintiffs’ General Fund. If fully implemented
as written on December 7, 2000, I-722 will significantly reduce certain plaintiffs’
General Fund.
29. Contract Impairment. If fully implemented as written on December
7, 2000, I-722 will, as a practical matter, impair certain of plaintiffs’ contracts
with bondholders and with ratepayers.
30. Substantial Cutbacks. If fully implemented as written on December
7, 2000, I-722 will also force certain plaintiffs to execute significant cutbacks
in health, safety, or other services provided to their citizens.
31. Tax Inequities. If fully implemented as written on December 7, 2000,
I-722 will force the real estate tax burdens within certain plaintiffs’ jurisdictions
to be redistributed from the owners of rapidly appreciating real property to
citizens owning property that has depreciated, remained stable, or appreciating
less rapidly. That inequitable tax-reallocation scheme will redistribute the
real property tax burdens in certain plaintiffs’ jurisdictions to citizens whose
property has appreciated less than the jurisdiction-wide average since 1999
in each of certain plaintiffs’ jurisdictions.
32. Inefficient Tax Collection. If fully implemented as written on December
7, 2000, I-722 will cause confusion, unfairness, and delays in the redistribution
of tax burdens and collections of the same. It will also cause certain plaintiffs
to incur needless administrative costs in attempting to comply with the Initiative’s
provisions – e.g., its provisions requiring the recalculation of levies and
levy lids, requiring artificial "1999" reappraisals for new construction
and improvements, and requiring "refunds" to the "taxpayer"
for increased taxes, fees, and other monetary charges collected since July 1999.
Those costs and payments cannot as a practical matter be recovered after the
courts invalidate I-722. Moreover, unless enjoined, the Assessors in certain
plaintiffs’ jurisdictions may be required by the Director’s advice and direction
to immediately, upon I-722’s December 7, 2000 effective date, incur the expense
and effort of revising assessments upon which property tax collectible in 2000
and 2001 are based to reflect retroactive 1999 values, 1999 construction costs,
the portions of value of each property attributable to repair or maintenance,
construction costs exceeding 1999 rates, and to recompute all values, taxes
and refunds for 2000 and 2001, and to provide many of those values and limits
to other taxing districts with no time for implementation, budgeting, and with
no reimbursement of the cost of this unfunded mandate.
33. Need for Equitable Remedy. As a direct and immediate result of the
defendants’ actions in implementing and enforcing I-722, plaintiffs will suffer
immediate, actual, and substantial harm for which there is no plain, complete,
speedy or adequate remedy at law.
34. Public Import. The real merits of this controversy are unsettled
and, without a judgment in this suit, questions of great public importance in
plaintiffs’ jurisdictions concerning the constitutionality of implementing and
enforcing I-722 will continue to exist.
DECLARATORY JUDGMENT CLAIM
35. Incorporation. Plaintiffs incorporate in this paragraph the allegations
in the other portions of this Complaint to the extent they are not inconsistent
with this Declaratory Judgment Claim, and in addition allege:
Constitution’s "Single-Subject" Requirement
36. Constitution. An Initiative that submits two different proposals
in one ballot measure is not fair to voters – for it robs them of a fair choice,
and forces them to vote either for both proposals or against
both proposals. The single-subject rule in Article II, § 19 of our Constitution
protects voters from being forced into that predicament, and thereby safeguards
voters’ right to vote for one proposal and against the
other if they so choose.
37. Violation. I-722 violated our Constitution’s single-subject requirement.
For example, the I-722 ballot presented at least three different proposals to
the voters, and required each voter to vote "yes" on all three as
a group or "no" on all three as a group:
(1) Do you want 1999 tax and fee increases nullified?, and
(2) Do you want vehicles exempted from property taxes?, and
(3) Do you want property tax increases limited to 2% annually?
Constitution’s "Subject-In-Title" Requirement
38. Constitution. An Initiative can mislead voters if the fine print
buried in its text goes beyond what the average voter would think he
or she is voting on by reading the Initiative’s ballot title. Article
II, § 19 of our Constitution accordingly establishes a "subject-in-title"
requirement that bars an Initiative’s text from going beyond the subject disclosed
to voters in the ballot title.
39. Violation. I-722 violated our Constitution’s "subject-in-title"
requirement. For example, the I-722 ballot title violated this constitutional
requirement by:
(1) asking voters if they wanted 1999 tax and fee increases "nullified"
– without disclosing to them that the text also required public funds legally
collected in 1999 and 2000 to be "refunded";
(2) asking voters if they wanted 1999 "tax and fee"
increases nullified – without disclosing to them that the text dramatically
expanded that nullification with a sweeping definition of "tax" that
encompassed not simply "taxes" and "fees", but also "any
... monetary charge" collected by a government entity – including,
e.g., "water, sewer, and other utility charges".
(3) asking voters if they wanted property tax increases "limited
to 2% annually" – without disclosing to them that the text also
rolled back property taxes to be based on assessments in effect
on January 1, 1999 – i.e., a roll-back to assessments determined on February
15, 1998 at the very latest.
(4) asking voters if they wanted property tax increases "limited"
to 2% annually – without disclosing to them that the text also completely
eliminated tax liability attributable to certain types of construction.
Constitution’s "Full Disclosure" Requirement
40. Constitution. Fairness dictates that an Initiative disclose to voters
how a "yes" vote will amend or revise the laws that already exist
in this State. Accordingly, Article II, § 37 of our Constitution requires an
Initiative to tell voters which statutes it would amend or revise.
41. Violation. I-722 violates that full disclosure requirement, and
alters existing statutes without identifying those statutes for the voters.
For example, this Initiative’s provision mandating the refund of "water,
sewer, and other utility charges" already collected in 1999 and 2000 to
cover the costs of operating municipal water and sewer systems amends statutes
such as chapters 36.94, 35.67 and 35.92 RCW, which mandate that municipal utilities
cannot operate at a loss and must therefore set (and collect) sufficient water,
sewer, and other utility rates to fully fund the utility’s costs of operation.
Other examples include, e.g., the provisions of chapter 84.12 RCW relating to
inter-county operating properties, RCW 84.55.010, RCW 84.48.080, RCW 84.80.080,
and the refunding rules in chapters 84.68 & 84.69 RCW.
Constitution’s Tax Equality Requirement
42. Constitution. Article VII, §1 of our Constitution requires uniformity
in the taxation of real property. This assures that similar citizens owning
similar pieces of property with equal fair market values are taxed equally.
Indeed, such uniformity and equality in taxation is one of the cornerstones
of a fair and equitable taxation system.
43. Violation. I-722 violates our Constitution’s requirement of tax
equality by taxing property at the old assessment values in effect January 1,
1999, plus inflation or 2% (whichever is less), instead of taxing property at
its current fair market value. That results in owners of depreciating (or slowly
appreciating) property paying taxes based on their property’s fair market
value, but owners of more rapidly appreciating property paying taxes based on
less than fair market value. That in turn results in the property tax
burden being shifted from the owners of rapidly appreciating property
to the owners of slower appreciating property. (Depending upon how the
defendants intend to equalize the State Levy pursuant to RCW 84.48.080, a similar
lack of equality and uniformity claim exists with respect to any redistribution
of tax burdens from more rapidly appreciating property to slower appreciating
property. Plaintiffs reserve the right to add such a claim if the defendants’
determination with respect to such equalization so warrants – e.g., if defendants
decide to use the artificial 1999 assessment plus 2% approach of I-722 rather
than true and fair market value.)
Constitution’s Ban Against Gifts of Public Funds
44. Constitution. Article VIII, §§ 5 & 7 of our Constitution ban
municipalities from making gifts of public funds to private parties. This helps
ensure that taxes validly collected from the citizenry as whole cannot be simply
given away to select citizens.
45. Violation. I-722 violates that ban by mandating that the plaintiffs
make payments out of then current public funds to certain citizens who previously
paid valid taxes, fees, and monetary charges (e.g., charges for the City or
County services they received). Indeed, the Washington Supreme Court has confirmed
that "refunding" taxes after they have been lawfully collected violates
our Constitution’s ban against gifts of public funds. Moreover, I-722’s nullification
by a statewide electorate of local "tax increase" ordinances
also violates Article XI, § 12, while its global nullification of state
"tax increase" legislation violates Article I, § 1(b).
Constitution’s Ban Against Contract Impairment
46. Constitution. Article I, §23 of our Constitution also promotes fairness
by prohibiting laws that impair contracts.
47. Violation. The provisions of I-722, and their implementation, violate
that ban by, e.g., impairing the plaintiffs’ contracts with their Bondholders,
and impairing their contracts with their utility ratepayers. Such impairment,
moreover, is not necessary to achieve any legitimate public purpose.
Constitution’s Ban Against Impermissibly Vague Mandates
48. Constitution. Article I, §3 of our Constitution (the due process
clause) promotes fairness by prohibiting laws that are too vague.
49. Violation. The provisions of I-722 violate that prohibition by,
e.g., imposing vague – indeed, incomprehensible – requirements such as those
contained in Initiative section 4(1) (requiring that "increases in property
tax ... shall be exempt from property tax").
Constitution’s Guaranty of Equal Protection
50. Constitution. Article I, §12 of our Constitution (the equal protection/privileges
and immunities clause) also promotes fairness by prohibiting laws that treat
similar citizens unequally.
51. Violation. The provisions of I-722, and their implementation, violate
that ban by, e.g., treating similar owners of real property differently without
a sufficient reasonable basis. For example, the inequitable shift of tax burdens
from the owners of property that is rapidly appreciating in value to owners
of property that is appreciating more slowly such as the plaintiff taxpayers
in this suit.
Unlawful Calculation Of Levy Limit
52. Statute. RCW 84.55.010 authorizes levies of regular property taxes
in an amount equal to the limit factor (106%) multiplied by the highest amount
of regular property taxes lawfully levied in the three most recent years. As
noted before, the property taxes levied by plaintiffs in 1999 for collection
in 2000 are the highest amount of regular property taxes legally levied by plaintiffs
in the three most recent years, and the inflation rate as determined by the
State (through its Department of Revenue) for use in determining the limit factor
under Chapter 84.55 RCW for taxes to be collected in 2001 is 2.61%.
53. Violation. The plaintiffs maintain that even without the future
levy capacity protections of RCW 84.55.092, its regular property taxes levied
in for collection in 2001 may legally equal an amount not to exceed 106% of
the regular property taxes levied in 1999 for collection in 2000, and that due
to the levy capacity protections the plaintiffs’ regular property taxes levied
in 2000 for collection in 2001 may legally equal an amount in excess of 106%
of the regular property taxes levied in 1999 for collection in 2000. Unless
enjoined, defendants will be required to apply the provisions of I-722 in a
manner that refuses to allow the plaintiffs’ maximum property tax levy for 2001
to be 106% (or any higher figure) of the levy collected in 2000, and instead
limit that maximum property tax levy for 2001 as 102% of the highest levy collected
between 1996 and 1999. The defendants’ calculation method, however, constitutes
an unlawful calculation of the plaintiffs’ levy limit. If defendants "comply"
with I-722 by ceasing to keep and update records on the value of taxable property
at its true and fair market value for debt purposes and the calculation of debt
– or direct or advise Assessors to do so – defendants will also violate (or
at least prevent compliance with) the debt capacity provisions of Article VIII,
§6 of our State Constitution and its implementing statutes.
Declaratory Judgment Conclusion
54. Unconstitutionality and Illegality Of I-722. Washington law entitles
plaintiffs to a declaratory judgment that I-722 is invalid, null, and void under
the Washington State Constitution. For example, I-722 violates:
(a) Article II, §19, 1st clause (single-subject requirement for
Initiatives);
(b) Article II, §19, 2nd clause (subject-in-title requirement for
Initiatives)
(c) Article II, §37 (full disclosure rule for Initiatives);
(d) Art. VII, §1 (requirement of equal real estate taxation)
(e) Art. VIII, §§ 5 & 7 (ban on gift of public funds) and Art. XI, § 12
& Art. I, § 1(b) (both re limitations on ordinance or legislation nullification);
(f) Art. I, §23 (ban on impairment of contracts);
(g) Art. I, §3 (due process clause/void for vagueness); and
(h) Art. I, §12 (prohibition against unequal treatment of citizens).
I-722, as being threatened to be implemented by the defendants, also results
in an unlawful calculation of the levy lid, and will violate (or at least prevent
compliance with) the debt capacity provisions of Article VIII, §6 of our State
Constitution and its implementing statutes.
INJUNCTIVE RELIEF CLAIM
55. Incorporation. Plaintiffs incorporate in this paragraph the allegations
in the other portions of this Complaint to the extent they are not inconsistent
with this Injunctive Relief Claim, and in addition allege:
56. Clear Legal Right. I-722 is unconstitutional in many respects. As
a matter of constitutional law, I-722 is null, void, and unenforceable. Plaintiffs
have a clear legal or equitable right to not be subjected to the implementation
or enforcement of a law, such as I-722, that violates our Constitution. Plaintiffs
also have a clear legal or equitable right to not be subjected to the implementation
of a law that results in the unlawful calculation of the plaintiffs’ levy lid.
57. Well Grounded Fear Of Invasion. Plaintiffs have a well grounded
fear of an immediate invasion of their above rights (e.g., upon the defendants’
December 7 implementation or enforcement of I-722).
58. Substantial Injury. The December 7, 2000 implementation of I-722
will result in actual and substantial injury to plaintiffs.
59. Injunction. Plaintiffs are entitled to a preliminary and permanent
injunction barring implementation and enforcement of I-722.
60.Balance Of Interests. The balance of interests between the parties,
as well as the interests of the public in having the Courts of this State uphold
and defend our Constitution, also support the issuance of a preliminary and
permanent injunction barring implementation or enforcement of I-722 on December
7. The interest of the public in the efficient and fair collection of taxes
further supports the issuance of the injunctive relief requested in this suit.
RELIEF REQUESTED
Plaintiffs request the following relief from this Court:
1. A preliminary and permanent injunction enjoining the implementation and
enforcement of I-722;
2. A declaratory judgment declaring I-722 unconstitutional, and thus entirely
null and void;
3. Plaintiffs’ attorney fees, expenses, and costs to the full extent allowed
by law;
4. Permission to amend the pleadings to add additional claims or parties to
conform to the proof offered at the time of hearing or trial; and
5. Such other relief as appears to the Court to be just and equitable.
RESPECTFULLY SUBMITTED this 6th day of December, 2000.
FOSTER PEPPER & SHEFELMAN PLLC
____________________________________
Thomas F. Ahearne, WSBA No. 14844
Marc R. Greenough, WSBA No. 24427
Attorneys for Plaintiffs
DAVIS WRIGHT TREMAINE LLP
_______________________________________
Michele G. Radosevich, WSBA No. 24282
Attorneys for Plaintiffs
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