3 area cities may join suit against I-722

Herald staff

Initiative 722 became law Thursday, but if you’re expecting to see lower property taxes or a big tax refund next year, think again.

The initiative, which voters approved in November, caps increases in property tax levies at 2 percent and requires refunds of tax increases made in the second half of 1999.

But at least three Snohomish County cities are considering joining a lawsuit against the initiative. And at least seven have re-enacted tax increases first enacted in the last half of 1999. Re-enacting the taxes means taxpayers won’t see refunds, according to legal experts.

Tim Eyman, the Mukilteo businessman who spearheaded the initiative, said on Thursday that government should do what it’s told by the people.

"We don’t live in a banana republic where elected officials can pick and choose which laws they’ll uphold and which ones they’ll ignore," Eyman said.

"We expect them to uphold all the laws of Washington, even the ones they don’t like."

Grant Weed, attorney for the city of Marysville, said the city authorized him to join the lawsuit filed by several other cities in Washington, "dependent on further research."

"Many cities were watching and waiting to see what the court did," Weed said.

And what they saw was a Thurston County court ruling that gave cities in the suit injunctive relief, meaning those cities don’t need to abide by the initiative until a court hearing on its constitutionality in February.

Snohomish County Assessor Gail Rauch last week also decided to delay implementing the initiative’s property tax limits in the wake of the Thurston County ruling and a letter from the state Department of Revenue.

Snohomish County cities, none of which were parties in the suit, could still be required to refund 1999 tax increases.

Weed said Marysville is considering joining the suit in order to receive the same injunctive relief as the cities that participated.

"It’s an extra ounce of protection," he said, although he said he’s unsure when the city might join the suit.

Mountlake Terrace is also joining the fray, said Mayor Dave Gossett.

He said the city is entering the suit partly to find out whether it can legally refund past tax increases.

Gossett said the city is caught between the refund requirement and the risk of breaking the law by giving money back to taxpayers. That’s partly because of a legal prohibition on a "gift of public funds," he said.

"When the courts settle it, we’ll do whatever we’re supposed to do legally," he said.

Landy Manuel, Stanwood’s clerk/treasurer, said Stanwood also plans to join the suit.

"We have every intention of being involved," he said. "We’re sending papers off to an attorney today."

Some of these same cities, and several more, recently re-enacted taxes and fees first approved in the second half of 1999. They include Arlington, Brier, Edmonds, Lake Stevens, Mill Creek, Marysville and Snohomish.

The move is a measure for cities to avoid refunding the tax increases.

Several city administrators and attorneys said they re-enacted the taxes and fees based on recommendations from the Association of Washington Cities.

Sheila Gall, a municipal government analyst with the nonprofit group, said the re-enactments were recommended because, otherwise, all tax increases from the second half of 1999 would have become null and void as of Thursday, according to I-722.

So cities scrambled to re-enact the old taxes and fees before Thursday’s deadline in order to be able to continue to levy them.

Eyman sees such tactics to avoid the public’s mandate for tax relief as "arrogant," particularly in Snohomish County, where Initiative 722 was approved by 59 percent of the voters, an even higher number than its approval rating statewide.

"We think (I-722) sent a very, very powerful message that they need to make property tax increases the exception and not the rule," Eyman said.