I Developments in Washington's Law of Law-Making - Gonzaga ...

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GONZAGA LAW REVIEW [Vol. 44:3 The two cases in which these principles have most recently been debated both arise from Initiative 601, the "Taxpayer Protection Act," which the voters enacted in 1993. 61 Frustrated by the growth of state expenditures and the taxes and fees required to support those expenditures, the sponsors of 1-601 contended that responsible government required restraints on both taxation and expenditures. 62 To this end, Initiative 601 contained two restrictions on the law-making power. First, it established a state expenditure limit, a formula under which growth state general fund 63 spending was restricted. Second, it restricted tax legislation by requiring a supermajority vote-a two-thirds vote of both houses was required for any legislative action that raised state revenue. 64 In addition, if the revenue increase resulted in expenditures in excess of the expenditure limit, the tax increase would not take effect unless approved by the voters at the next general election. 65 After the voters approved Initiative 601 's restrictions on expenditure and revenue legislation, legislators and others challenged the initiative, contending that it violated the state constitution in several respects. 66 In Walker v. Munro (1994), the court 61. 1994 Wash. Sess. Laws ch. 2 (codified as amended at WASH. REv. CODE § 43.135.010). In 1993, the voters chose between dueling tax restriction proposals: Initiative 602 proposed a revenue collection limit. It was not approved by the voters. 62. 1993 Washington Voters' Pamphlet, Statement for Initiative Measure No. 601 ("Politicians cant control spending and Washington's citizens end up paying the bill through higher taxes."). 63. 1994 Wash. Sess. Laws ch. 2, § 2 (codified at as amended WASH. REv. CODE § 43.135.025). As originally enacted, the expenditure limit applied only to the state general fund, and annual growth was limited by a "fiscal growth factor," a three-year rolling average of inflation and population growth. 1994 Wash. Sess. Laws ch. 2, § 6. As amended by the legislature in 2005 (effective 2007), the expenditure limit applies to the general fund and five "related funds," and the fiscal growth factor is now a ten-year average of personal income growth. 2005 Wash. Sess. Laws ch. 72, §§ 3, 7. In addition to being adjusted for the fiscal growth factor, transfers of revenue and programs into and out of the affected funds require further adjustment of the limit. 1994 Wash. Sess. Laws ch. 2, § 2 (codified as amended at WASH. REv. CODE § 43.135.025). 64. 1994 Wash. Sess. Laws ch. 2, § 4 (codified as amended at WASH. REv. CODE § 43.135.035). 65. Id It is unclear how revenue legislation, in itself, could result in expenditures in excess of the limit, particularly given that article II, section 19 generally prohibits the legislature from adopting tax legislation in the omnibus appropriations act. E.g. Power, Inc., v. Huntley, 235 P.2d 173, 177-78, 180 (Wash. 1951). Revenue in excess of the limit might be raised for purposes other than expenditures. For example, the legislature could seek to increase taxes in order to enhance the ending fund balance or in order to establish a "rainy day fund." Wash. State Farm Bureau Fed'n v. Gregoire, 174 P.3d 1142, 1147 (Wash. 2007). As seen in the Farm Bureau litigation, this language was interpreted by the litigants to refer to revenue legislation, the proceeds of which were assumed and appropriated in separate budget legislation. Id. at 1147-49. The plaintiffs contended that this budget was based on an improperly adjusted expenditure limit. Id at 1144. 66. Plaintiffs made four arguments. First, that the two-thirds vote requirement conflicted with article 11, section 22, which establishes the voting threshold needed to enact legislation. Brief of Petitioner, at 17-21, Walker v. Munro, 879 P.2d 920 (Wash. 1994) (No. 61213-7), 1994 WL
2008/09] WASHINGTON'S LAW OF LAW-MAKING dismissed these claims as nonjusticiable, reasoning that no remedy was available to what was essentially a political dispute. 67 After Amalgamated Transit (2000), in which the court rejected a "universal referendum" not unlike 1-601's vote of the people requirement, the validity of the latter fell into doubt. 6 8 In two recent cases, the court was asked to rule on the constitutional validity of I- 601's statutory restrictions on the law-making power. Washington State Farm Bureau v. Gregoire asked whether the initiative could constitutionally condition legislation on a statutorily compelled vote of the people, assuming that the legislature had in fact raised taxes in order to spend above the limit. 69 Brown v. Owen asked whether a statute, whether adopted by the voters or by the legislature, may impose a supermajority voting threshold on tax legislation. 70 Thus, both cases deal with whether our system of representative democracy may enact statutes that operate as a rope to bind the law-making power-and in both cases, the court declined to reach the substantive constitutional question. A. Farm Bureau: Slipping Through the Loop Washington State Farm Bureau Federation v. Gregoire involved challenges to 2005 budget and tax legislation. 71 The Farm Bureau plaintiffs argued that the legislature and the state Expenditure Limit Committee (ELC) had manipulated certain expenditures and transfers in the 2005 budget to unlawfully inflate the state expenditure limit, with the result that certain tax increases levied revenues in excess of the expenditure limit, thereby triggering 1-601's requirement for voter approval of taxes in excess of the limit. 72 Shortly before the trial court invalidated the legislative actions and ruled that the tax legislation should have required a vote of the people, the 2006 legislature passed a law stating that the fiscal year 2006 limit was the limit as established by the 2005 ELC and was subject to specified further adjustments. 73 To add further complexity to the case, the state supreme court's 2000 decision in 16199187. Second, that the vote of the people requirement conflicted with article II, section 1, which establishes requirements for referendum bills and measures. Id. at 21-28. Third, that the expenditure and tax limitations conflicted with the legislature's inherent power to enact tax legislation under article VII, section 1, which specifies that "[t]he power of taxation shall never be suspended, surrendered, or contracted away." Id. at 28-34. Fourth, that the tax and fee restrictions amended other sections of law without setting them forth in full. Id. at 34-39. 67. Walker, 879 P.2d at 927. 68. Amalgamated Transit Union 578 v. State, 11 P.3d 762, 792 (Wash. 2000). 69. Wash. State Farm Bureau Fed'n v. Gregoire, 174 P.3d 1142, 1145 (Wash. 2007). 70. Brown v. Owen, No. 81287-0, 2009 WL 564432, at *34 (Wash. Mar. 5,2009). 71. Fann Bureau v. Gregoire, 174 P.3d at 1144. 72. Id. at 1144,1148-50 (Wash. 2007). 73. 2006 Wash. Laws ch. 56, § 7 (codified as amended at WAsH. REV. CODE § 43.135.025).
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