Previously posted at: Ding Dong, the tax is dead

Considering our State Legislature took a huge budget surplus and spent it, this is just more reason to demand accountability in Olympia.

Friday Snohomish County Judge Allendorf affirms his March ruling against the out of control legislature.

Judge rules against tax hikes

Voters shouldn’t get a chance at rolling back last year’s hike in cigarette taxes, a Snohomish County Superior Court judge decided Monday.

But $70 million in other taxes, including levies on hard liquor and extended warranties, are invalid unless ratified by voters, the judge ruled.

That’s the gist of the order issued by Superior Court Judge James Allendoerfer at the end of an hourlong hearing in a lawsuit that alleges legislators skirted state law in 2005 by raising taxes without voter approval.

State lawyers initiated an appeal to the state Supreme Court immediately after the hearing. They contend the taxes were legally approved and should remain in force.

"Obviously this is the kind of decision we would need to have reviewed by a higher court," said deputy solicitor general Jeffrey Even.

Monday’s action clarified Allendoerfer’s March 17 bench ruling in this case.

At the time, he said the Legislature exploited a loophole in the law when they passed $250 million in new and higher taxes in 2005. The law created by Initiative 601 requires such hikes be either approved by voters or a supermajority of the Legislature, and neither occurred last year.

Note:  They did this by using a tricky shell game loophole:

• One of the tricks the Legislature used to inflate the spending limit was a budgetary shell game that Allendoerffer called "triangulation." To further increase the spending limit, and for no other purpose, budget writers moved $250 million, on successive days, from the General Fund, to the Violence Reduction and Drug Education Awareness Fund, to the Health Services Account, and back to the General Fund. Judge Allendoerffer ruled that this shell game did not increase the spending limit at all, and therefore the budget adopted by the Legislature exceeded the spending limits.

Source:  The EFF.  See the article at that link for more informaiton.

Continuing:

Lawyers for both sides were unsure then how much of the tax package the judge ruled invalid.

Both sides agreed that one piece, the restoration of the estate tax, would be exempt because the dollars were going into a designated fund for education.

The state’s attorney argued for excluding the cigarette tax too, saying 97 percent of those dollars are earmarked for education. The rest ends up in the general fund only if the state collects fewer cigarette tax revenues than expected.

Attorney Richard Stephens, representing the coalition that brought the case, contended that under the law, taxes that steer any amount of money into the general fund needed voter approval.

Allendoerfer on Monday sided with the state, to the disappointment of Stephens and his clients who contend that the judge is creating a new loophole.

Legislators can raise taxes and bypass voters as long as they stick the revenues into a special fund rather than the general fund, they said.

"The judge again established this is a budget shell game and he’s not going to stand for a budget shell game," said Dan Fazio, director of employer services for the state Farm Bureau.

"The problem is if the Legislature can say they’re going to create all these little funds, then they totally circumvent I-601," he said. "He found one loophole and then fell through another one."

Stephens said he may file an appeal, too.

Joining the state Farm Bureau in the lawsuit are the Evergreen Freedom Foundation, the National Federation of Independent Business, the Building Industry Association of Washington and the Washington State Grange.