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New Filing in 1053 Case From Attorney General’s Office Points Out That Tax Bill Actually Passed

State Rep. Laurie Jinkins, D-Tacoma, leads the scripted colloquoy on the House floor last year that aimed to prove the Legislature just can’t beat the two-thirds requirement. But this year it did.

A few days ago, Washington State Wire pointed out that the big bank-tax bill on which the current legal challenge to I-1053 is based actually passed the Legislature this year. The idea behind the lawsuit, filed by 12 Democratic legislators, a couple of allied special-interest groups and a few “concerned citizens,” is that the requirement for a two-thirds vote in the Legislature for any tax increase is so onerous that lawmakers just can’t get around it. And the proof of it was supposed to be the fact that the Legislature simply couldn’t muster the votes to pass HB 2078 last year.

That bill would have ended a tax exemption for out-of-state banks offering mortgages in the state of Washington, and would have diverted the proceeds to K-3 education. It got a majority in the House last year, with 52 votes, but not a supermajority at 66, and so it failed. If you were watching the debate on the House floor last May 24, you would have seen an elaborate scripted colloquoy between Democratic members designed to convince the state Supreme Court that the Legislature just couldn’t overcome the rule by any normal procedural means. It is an important point in a legal sense, because the Supreme Court has held in the past that plaintiffs must demonstrate they have no recourse before it will even consider dealing with their constitutional arguments.

Since the Legislature wound up ending the tax exemption this year, with a two-thirds vote in the House and Senate on SB 6635, an argument based on the bank tax break suddenly seemed a whole lot weaker.

Well, we’re all still waiting for a ruling from a King County Superior Court judge in the case. But in the meantime, it looks like the state attorney general’s office has noticed the same thing we did. The AG’s office, which is defending the initiative, has filed a “notice of supplementary authority” that makes the identical point. Passage of the bill is “relevant to the issues of justiciability and standing” raised in the lawsuit, it says. It notes, in dry legal language, that “Sections 101 and 102 of engrossed Senate Bill 6635 remove the tax deduction addressed in Section 2 of SHB 2078, the bill referenced in paragraphs 45-47 of plaintiffs’ complaint for declaratory judgment and injunctive relief, and appended thereto as exhibit 4.”

Which is sort of a complicated way of saying that the Legislature may have knocked the stuffing out of the case, whether it knew what it was doing or not. And whatever the Democrats might have been thinking when they accepted the bargain, you can be sure that when Republicans offered to vote for this one, they did.

(And a nod to the Washington Policy Center’s Jason Mercier for catching this one.)


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