Repeal of state's estate tax to be on November ballot

OLYMPIA — An initiative to repeal Washington's estate tax has qualified for the November ballot, Secretary of State Sam Reed announced Wednesday.

Supporters of Initiative 920 turned in 395,219 voter signatures — far surpassing the 224,880 signatures needed to qualify the measure for the ballot.

I-920 would repeal a tax that the state now imposes on some people's estates after they die. The initiative is backed by some of the state's most powerful business groups and prominent business leaders.

But they face stiff opposition, especially from the state's largest teachers union. The estate tax, which is expected to bring in more than $480 million during the next five years, is dedicated entirely to education.

The state Supreme Court last year ruled the state no longer could collect the estate tax because of changes in federal law. But the Democrat-controlled state Legislature quickly passed a new estate tax that did not conflict with federal law and tied the tax to school funding.

The debate over I-920 will be heated.

"It's morally wrong to use death as a triggering device for a tax," said Dennis Falk, who sponsored I-920. "It's a direct attack upon the free-enterprise system."

But estate-tax proponents argue it's fair to require the wealthy to give back a portion of their fortune.

Democratic Gov. Christine Gregoire has vowed to fight I-920.

"I think it's appropriate that those who have prospered in this state contribute to the work-force needs of tomorrow, and that's to ensure they leave a legacy by making sure our children have the kind of quality education we need to compete," Gregoire said earlier this week.

The state projects that about 213 estates will have to pay taxes this year. The tax on an estate in the $2 million to $3 million range will average $40,000. But a handful of estates worth $20 million or more will pay an average of nearly $8 million in taxes.

Falk's group — the Committee to Abolish the Estate Tax — has raised more than $845,000 in campaign donations. More than three-fourths of that came from a single donor, Seattle developer Martin Selig.

But the bulk of that money already has been spent, mostly to pay signature gatherers.

The group leading the campaign against I-920 — the Committee to Protect Our Children's Legacy — has raised about $104,000, with nearly $70,000 coming from the Washington Education Association.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com