WA Supreme Court to consider Let's Go Washington lawsuit challenging 'millionaires tax'

Washington’s Supreme Court has agreed to weigh in on the constitutionality of a portion of the recently passed income tax on high earners, also known as the “millionaires tax.”

The law includes a clause that prevents it from being repealed by voters through a method called a referendum, something that conservative group Let’s Go Washington has alleged is unconstitutional.

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“The framers of our constitution said, ‘We don’t like taxes,’ and then, they were very strict about the rules of what could be taxed and how it could be taxed,” Let’s Go Washington founder Brian Heywood said. “It’s mind-boggling… [to] say we’re going to make an exception to anything that’s tax-related and the people can’t do a referendum on it.”

Heywood and his group attempted to file a referendum petition on the new law last week, but the Secretary of State bounced their petition back, noting that a referendum was not allowed under this law. In response, Let’s Go Washington filed the lawsuit challenging the clause.

A referendum is a particular process that has to be filed within 90 days after the Legislative session has ended to repeal a law that was passed during that session. If 154,455 signatures can be collected by June, voters would have a chance to repeal the targeted law in November. Implementation of the law is frozen until voters have a chance to weigh in.

Senate Majority Leader Jamie Pedersen, who sponsored the tax, said the inclusion of a clause to bar a referendum isn’t unusual for legislation that involves taxes, and wasn’t put in to try to dampen voter participation. Many revenue-related bills often include a clause that prevents a referendum from being brought against them, because in the state constitution, revenue-generating bills are necessary to the functioning of government.

“That's not some special measure to try to block public involvement in the process,” Pedersen said. “That is just a statement of fact under the Constitution, that this is a revenue measure and it's not subject to referendum.”

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State constitution scholars agree.

Hugh Spitzer, a professor at the University of Washington School of Law and expert on Constitutional Law, said while there have been about a dozen instances over the past 100 years where the clause barring a referendum on a law has been challenged, the court has typically held that the clause is constitutional.

“The Legislature has to make tough choices about taxes and about budgets, and so it would interfere with the functionality of government if every time the Legislature adopted a tax or passed a budget bill, it went to referendum,” Spitzer said.

In the past, he said people have tried to bring a referendum against a number of laws, such as a law allocating money for highway construction, excise taxes on margarine, a timber tax — all had a clause barring a referendum petition, and the court did not rule that could be overridden.

“I would say that the petitioners or plaintiffs in this instance have an uphill climb to get the court to rule against the Legislature's use of the existing public institutions clause,” Spitzer said.

The Supreme Court is expected to hold a hearing on the constitutionality of this clause at the end of April. If the justices rule the use of the clause is unconstitutional, Pedersen has said the Legislature may need to call a special session, as the state’s budget for the next four years was balanced partially with revenue collected from the tax.

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If the Supreme Court upholds the clause, there is still another opportunity for voters to weigh in.

Let’s Go Washington has said if their referendum petition is denied, they will be pursuing the initiative process to put a repeal of the law on the ballot, though an initiative requires twice as many signatures to be gathered.

“A referendum is a simple, easy to understand, up or down, yes or no vote,” Heywood said. “If it's an initiative, you have to get people to understand ‘vote yes in order to vote no,’ and that's a much harder sell.”