The City of Olympia has officially set the stage for a court challenge that could determine whether a proposed local income tax — the first of its kind in the state — will appear on an upcoming election ballot.
The city filed a complaint Friday in Thurston County Superior Court that seeks a judge’s opinion regarding legality of the initiative and whether the city has the power to tax residents’ income.
Sponsored by a group called Opportunity for Olympia, the initiative calls for a 1.5 percent tax on Olympia households with income in excess of $200,000 to raise an estimated $3 million a year for a public college tuition fund. The Thurston County Auditor confirmed earlier this month that the group’s petition contained at least 4,702 valid signatures.
With that confirmation, the Olympia City Council is required by state law to either enact the ordinance or send it to the Nov. 8 general election ballot.
However, the council voted 4-2 at Tuesday’s meeting to take no action at all. This lack of action essentially forces the matter into court, where a judge will determine whether the initiative is valid and should be placed on the ballot. No hearing date has been set.
City Manager Steve Hall told the council that the “no action” decision will move both sides toward a court hearing, possibly before the November ballot. Hall said the goal is to get a legal conclusion about the initiative before the city spends more time and money on it.
Ray Guerra of Opportunity for Olympia said the group planned to file a lawsuit Wednesday afternoon to challenge the city’s injunction. The group also issued a statement just minutes after the council’s decision Tuesday night.
“City council members are elected by the people to implement the will of the people,” according to the statement. “It doesn’t matter what their personal positions are on this initiative, as public officials they cannot override the decision of Olympia’s voters to put this initiative up for a vote; to do so is to undermine our democracy and to disrespect the rule of law.”
Citing inconsistent language and flaws such as a lack of enforcement, the council had previously directed city staff to come up with alternative income tax proposals with a similar mission as the Opportunity for Olympia petition. Mayor Pro Tem Nathaniel Jones had initially championed for alternative proposals to fulfill the wishes of those who had signed the petition.
At Tuesday’s council meeting, Jones called the current initiative “fatally flawed” and said it creates false hope among voters.
“It would be irresponsible to place this measure on the ballot knowing it would definitely fail in the courts,” Jones said. “This is a setup for failure.”
Mayor Cheryl Selby said city staff has devoted “hundreds of hours” toward a complex issue in a failed effort to come up with an alternative that can withstand an inevitable court challenge.
“The city can’t see a way forward for it to work,” Selby said. “Not taking action would be a cleaner process that could still let this go forward on a future ballot without a bunch of confusion.”
Councilman Jim Cooper said he recused himself from the vote because he is running for county commissioner and Thurston County is named as a defendant in the city’s legal proceedings.
Council members Jessica Bateman and Jeannine Roe opposed the “take no action” vote at Tuesday’s meeting, saying that it goes against the public’s wishes, regardless of the initiative’s flaws.
“I have strong concerns about the city council circumventing the voters,” Bateman said.
The initiative has fueled a growing debate within the city about the state’s tax structure along with the rising cost of higher education. Dozens of residents have appeared before the city council in recent weeks to support the initiative.
Leslie Owen, an attorney from Olympia, said the council has raised legitimate concerns about initiative but needs to allow the public to vote.
“Let’s take advantage of that opportunity when it appears that the willingness is there,” Owen told the council Tuesday. “We know there’s money in this state to support this, and I believe it would come through for any kind of legal challenge.”
Councilman Clark Gilman urged the community to “engage with us” when it comes to reforming the tax system and education funding.
“I was an early endorser,” Gilman said of the petition, but added a caveat: “I believe it’s the right questions and the wrong answer.”