Judge says cities can’t impose income taxes, strikes Olympia initiative from the November ballot; proponents will appeal

In an altogether-expected move, a Superior Court Judge found the Olympia initiative to impose a municipal income tax doesn’t pass muster. The Associated Press reports

Pierce County Superior Court Judge Jack Nevin, presiding in a Thurston County courtroom, ruled Wednesday that the measure — which sought a 1.5 percent tax on household income in excess of $200,000 — went beyond the scope of local initiative power.

He didn’t waste much time on it.

Nevin ruled from the bench immediately after a hearing in which initiative proponents argued the initiative properly qualified for the ballot and that to not to let it appear would disenfranchise voters who signed petitions.

Although he did editorialize,

“This is a good cause. This is a noble cause,” Nevin said before he read his ruling. But he said the case wasn’t about the court weighing in on any perceived shortcomings of how the state handles education, specifically community-college education.

The decision was foreshadowed months ago, as we wrote in April,

In a study session with the Olympia City Council yesterday, Hugh Spitzer, a legal scholar who served as vice chair of the Tax Structure Study Committee in 2002, said the effort would not likely pass constitutional muster with the state Supreme Court.

The Olympian at the time reported Spitzer’s comment, “People will wind up being quite disappointed.”

Proponents’ reaction to Nevin’s ruling was swift. They were disappointed.

Claire Tonry, an attorney for Opportunity for Olympia, said the group would immediately appeal.

“We are of course disappointed that the court did not uphold the citizens’ rights to direct democracy today but we are optimistic that the Court of Appeals will,” she said.

The Olympian reports on how the measure reached the court.

A group called Opportunity for Olympia had collected thousands of signatures in support of a 1.5 percent tax on all household income above $200,000 within Olympia’s city limits. The revenues would be designated to create a college tuition fund for high school graduates in Olympia.

Instead of putting the initiative on the November ballot, however, the city filed an injunction that forced Wednesday’s court hearing. City officials said they wanted a judge to determine whether Olympia has the legal authority to impose or collect an income tax before moving forward with what has been called a flawed initiative.

Income tax supporters have been looking for a vehicle to get the issue before the state Supreme Court. The Olympia initiative seemed to some to be one way to get the court to reconsider the 1933 decision overturning a voter-approved graduated income tax. Spitzer has written,

…there is a reasonable likelihood that if the Washington State Legislature or voters enacted an income tax today, Washington’s courts would approach the issue with a fresh view and might very well decide the matter in a manner consistent with the dominant view in other states with similar constitutional provisions.

As yesterday’s ruling demonstrates, however, local initiatives are unlikely to present the court an opportunity to reverse itself.