After Supreme Court ruling, will Olympia increase taxes?
The Legislature has been tossed a hot potato now that the state Supreme Court has ruled unconstitutional the requirement of a two-thirds vote by lawmakers to pass a tax hike. One Democratic leader doubts there are enough votes to increase taxes this session.
Seattle Times Olympia bureau
OLYMPIA — The idea that state lawmakers can now increase taxes with a simple majority vote represents a fundamental shift in Olympia politics.
For much of the past 20 years, lawmakers have either needed a two-thirds vote to pass tax increases — because voters ordered that supermajority — or knew such a restriction was on the horizon.
All that disappeared Thursday when the state Supreme Court ruled that requiring a two-thirds vote in the Legislature to raise taxes is unconstitutional.
Justices said a constitutional amendment would be needed to put in place such a restriction.
The 6-3 decision does not guarantee a tax increase this session, but for now and the foreseeable future, the ruling makes it easier for the Legislature to go that route.
Lawmakers are trying to close a roughly $1 billion budget shortfall, find more money for the state’s transportation system and deal with the court’s last major decision — a 2012 order to significantly increase funding for public schools.
“It’s still going to be very hard to get the votes to raise taxes, but it just became much easier than it was,” said Chris Vance, a former chairman of the state Republican Party. “Before I would have said it was virtually impossible. Now it’s at least possible.”
Ironically, Democrats have been fighting for years to get the court to overturn the requirement, first put in place in the early 1990s, then repeatedly reimposed. Now that they got their wish, they no longer control the Legislature.
They control the House, but Republicans took over the Senate this session, for the first time since 2004.
Senate Republicans on Thursday vowed to keep taxes at bay.
“It’s unfortunate for the citizens of this state,” Sen. Don Benton, R-Vancouver, said of the court decision. “But thank goodness we have the coalition majority in the Senate, which is committed to no new taxes.”
Republicans gained control of the Senate on the first day of the session in January with the help of Democratic Sens. Rodney Tom, D-Medina, and Tim Sheldon, D-Potlatch, who crossed party lines to caucus with the GOP.
However, they retain a narrow 25-24 majority. The question is whether the GOP can keep its majority together. Tom and others in the coalition appeared confident they can.
Senate Democratic Leader Ed Murray, D-Seattle, doubts there would be the votes this session to increase taxes, even if his party had retained control of the Senate.
It’s an open question, though, he said, whether enough votes could be stitched together to extend existing taxes.
Democratic Gov. Jay Inslee, while opposed to new taxes, has said he’s open to extending temporary taxes due to expire next year as a way to pay for education or help balance the state budget.
Former Gov. Chris Gregoire, in her final budget released in December, advocated extending a 0.3 percent increase to the business-and-occupation tax paid by doctors, lawyers, accountants and others, and extending a 50-cent-per-gallon tax on beer. The taxes are to expire next summer.
Gregoire proposed extending both taxes by 3½years. Keeping in place certain exemptions, the tax extensions would yield $636 million in 2013-15 and
$565 million in 2015-17.
House Appropriations Chairman Ross Hunter, D-Medina, has said he doubts the Legislature can close the budget shortfall and meet court demands for more education funding without new revenue, which could include extending existing taxes or another option.
“This makes it easier to think about a more balanced solution,” Hunter said of the court decision.
Rep. Jamie Pedersen, D-Seattle, one of the plaintiffs in the court case, said the ruling could force a broader debate on tax reform in the state. Tax opponents had no incentive to negotiate such a deal when the two-thirds requirement was in place, he said.
Now, with the ruling, maybe both sides can agree on broader changes within the tax code, he said. “It creates the space where we can have that conversation,” Pedersen said.
Senate Republicans, conversely, want to put the two-thirds requirement in the state constitution.
That would require a two-thirds vote in both the House and Senate, and simple-majority approval by voters.
The court’s majority opinion, written by Justice Susan Owens, states that under a common sense understanding, any bill getting a simple majority vote will become law.
The court wrote that without the simple majority rule in the constitution, the people or the Legislature could require particular bills to receive 90 percent approval rather than just a two-thirds approval, thus essentially ensuring that those types of bills would never pass.
“Such a result is antithetical to the notion of a functioning government and should be rejected as such,’’ the opinion said.
If a supermajority for tax legislation is desired by the people and the Legislature, “they must do so through constitutional amendment, not through legislation,” the opinion stated.
A constitutional amendment passed the Senate Ways and Means Committee on Thursday. If the measure managed to get through the Senate, House Democratic leaders doubt it would get anywhere in their chamber.
The court’s ruling was in response to a lawsuit filed by the League of Education Voters and other groups against Initiative 1053, an initiative sponsored by anti-tax activist Tim Eyman in 2010 that reinstated the two-thirds requirement.
Voters first authorized the two-thirds requirement in 1993. They reimposed it in 1998, 2007, 2010 and reaffirmed it in 2012, at least in part because of lawmakers’ penchant for suspending the requirement to raise more revenue.
Under state law, it takes a two-thirds vote of the Legislature to amend an initiative in the first two years after voters approved it — a near impossibility given the current makeup of the Legislature.
After two years, lawmakers can change voter-approved initiatives with a simple-majority vote. They have done so repeatedly.
Eyman sponsored new initiatives to require a two-thirds vote in the Legislature in an effort to pre-empt efforts by lawmakers to suspend the requirement.
Eyman, who makes a living sponsoring initiatives, spoke on the Capitol steps Thursday.
“Nothing has changed as far as the level of public support for this measure. Six justices obviously don’t like it, but 1.9 million people do,” he said, referring to the votes his two-thirds initiative received last fall.
When asked if the court decision will lead to tax increases, state Sen. Pam Roach, R-Auburn, said, “Yes it does mean taxes are going up. Not this year. Not next year, I don’t think. But it is inevitable.”
The Associated Press contributed to this report. Andrew Garber:
360-236-8268 or email@example.com.