Tax-cutting I-722 put on hold across state

By REBECCA COOK

Associated Press

OLYMPIA – The lawsuit against tax-cutting Initiative 722 is growing.

Thurston County Superior Court Judge Christine Pomeroy today certified the case as a class action, meaning the entire state could become involved.

I-722 passed last month with 56 percent of the vote. Sponsored by anti-tax crusader Tim Eyman, the initiative requires a refund of taxes and fees imposed since July 2, 1999. It also limits property tax growth to 2 percent a year or the rate of inflation, whichever is lower.

A few days after the election, a group of cities and counties filed a lawsuit claiming that I-722 is unconstitutional for a variety of reasons.

Today’s decision means that all cities and taxing districts in the state do not have to worry about following I-722 until the courts decide its constitutionality, which will take months. They are automatically part of the lawsuit.

Counties must choose whether to join the class action. King, Kitsap, Whitman, Pierce, Thurston, Skamania and Clark counties are already part of the lawsuit. Pomeroy told today’s hearing that the rest of the state’s 39 counties must decide whether to participate by Dec. 29.

Everyone who joins the lawsuit can ignore I-722 for now, because Pomeroy last month granted a preliminary injunction to block I-722 from taking effect until she decides the case.

Pomeroy predicted that most, if not all, counties will opt into the lawsuit. The plaintiffs in the lawsuit have said that following I-722 right away would mean revamping their entire tax systems within a few weeks, at great expense.

“If some county wants to enforce I-722, let them,” she said. “But I really think you just won’t find that.”

James Johnson, the attorney for the I-722 campaign, noted that I-722 passed by a landslide in many counties and wagered that Pomeroy would be proven wrong.

“My prediction is the majority of Washington counties will not choose to join the case,” he said.

The next step will be in February, when both sides are scheduled to begin arguments on the actual merits of the case.

Pomeroy acknowledged that the outcome in her courtroom will merely set the stage for a state Supreme Court hearing.

“That’s where you’re headed, we all know it,” she said.

That’s what happened to Eyman’s last tax-cutting initiative, I-695, and the high court was not kind to Eyman. In October, it struck down the 1999 initiative as unconstitutional.

I-722 was Eyman’s follow-up to I-695, which eliminated the tax on automobile license tabs in exchange for a flat $30 annual fee, and required that future tax increases be approved by voters. The Legislature has since put the $30 license fee into law.