Statewide interest in Olympia’s income tax initiative: Setting the stage for the state Supreme Court to repeal ban?

Associated Press reporter Rachel La Corte takes a close look at the income tax initiative on the ballot in Olympia. 

Washington voters have rejected personal income-tax-related measures at the statewide ballot several times over the past eight decades. Now voters in the state capital will decide whether to approve an income tax on the city’s highest earners, even as the legality of the measure remains in question.

Initiative 1 seeks a 1.5 percent tax on household income in excess of $200,000 for residents of Olympia, a city of about 50,000 people. The measure seeks to raise an estimated $3 million a year for a public college tuition fund that would give all Olympia public high-school graduates and GED recipients tuition for at least the first year of community or technical college, or the equivalent amount — about $4,000 — for in-state public university tuition.

Oddly, some voters may not be aware that they’re being asked to approve an income tax.

The phrase “income tax” does not appear on the ballot title, after a superior-court judge ruled in favor of initiative proponents that it would be prejudicial to the proponents, who say the proposed tax is technically an excise tax because it taxes gross income. Instead, the ballot title simply says that the measure “concerns establishing and funding a college grant program.”

In the fuller description below the title, it notes that the grants would be funded by a tax on household income above $200,000.

She reports that backing for the initiative comes from groups hoping to get the issue before the state Supreme Court.

Hugh Spitzer, a University of Washington law professor specializing in state constitutional law, who is affiliated with the law firm representing the city of Olympia in the case, said that if the state Legislature passed an income tax or asked the voters to pass a statewide income tax, there’s a reasonably good chance the court would uphold such a law this time around.

But the effort in Olympia is “beyond a code city’s statutory authority,” Spitzer said.

Olympia mayor Cheryl Selby and former state Supreme Court  chief justice Gerry Alexander pointed out many of the flaws in the initiative in a recent Olympia op-ed. And in a study session with the Olympia City Council last April, Spitzer predicted the court would rule that code cities like Olympia can’t adopt an income tax. He added that supporters of the proposal would “wind up being quite disappointed.”

Andy Hobbs, a reporter for the Olympian, has fact-checked claims made by backers and opponents of Initiative 1.