Initiate, Then Litigate

Like peanut butter and jelly, lawsuits and Tim Eyman stick together. Eyman, the irrepressible tax cutter (see "Forget the Seattle Way, Try My Way," Oct. 9), has another measure, Initiative 776, before the people Nov. 5. Per usual, everyone agrees there will be lots of work for lawyers if I-776 passes: It promises to give every Washingtonian $30 renewals for their vehicle license plates and force another vote on Sound Transit's light rail. Markedly different from previous Eyman efforts, however, are I-776's poll numbers by the respected Seattle firm Elway Research, which show the measure failing.

I-776 promises a tax cut that would take away $106.6 million from statewide transportation services next year alone. In 2003, the initiative would cut local road repair in cities, including Seattle, and counties, to the tune of $31.8 million, by eliminating a $15 "vehicle-registration surcharge" levied in King, Snohomish, Pierce, and Douglas counties. In addition, the measure would slash license fees on "light trucks"—those that weigh 8,000 pounds or less—resulting in a reduction in the next year of $37 million in state taxes that fund ferries, put state troopers on the road, and repair state highways, among other things. The biggest hit, however, is to Sound Transit, the troubled agency that operates commuter rail and express buses and is planning light rail in King, Snohomish, and Pierce counties. I-776 aims to eliminate the tax that funds 20 percent of Sound Transit—$56.9 million in 2003.

Eyman is very clear about his goals for this initiative. "We want $30 tabs for everyone," he says. Eyman says the voters demanded cheap tabs when they passed Initiative 695 in 1999, although it was later struck down as unconstitutional. In addition, he explains, "We want to hold Sound Transit accountable." Eyman is outraged that the transit agency's light-rail project has gone way over budget and, as a result, has been drastically scaled back. "If the voters see reckless incompetence, the only thing left is the initiative process," he says.

King County Council and Sound Transit board member Dwight Pelz, D-Seattle, an I-776 opponent, wants everyone to ask themselves: Does this initiative make life better for the people of Washington? Pelz answers no. He believes Washington's tax-cut fever is receding as people begin to notice the real effects that Eyman's initiatives have on government services. He points out that King County and Seattle alone face a $112 million deficit next year that will affect everything from parks to health clinics, from food banks to libraries. While not all of that is attributable to Eyman's initiatives, some of it is, Pelz points out. And that's before I-776's proposed reductions. Pelz doesn't believe that people want less spending for one of Washington's most vexing problems: transportation.

Eyman and Pelz also disagree on what will happen to Sound Transit if I-776 passes. Eyman claims the measure "ensures a revote on light rail." He explains, "By reducing the revenue now, we force [Sound Transit] to go back to the voters."

Pelz says if Sound Transit's funding is reduced, it won't mean a new vote on light rail. The initiative "will cut our funding," Pelz acknowledges. He is quick to point out that for 2003, Sound Transit's proposed budget has three large components—express buses ($198 million), commuter rail ($201 million), and light rail ($248 million). The cuts will be across the board, Pelz claims. Pelz, however, doesn't think Sound Transit will be affected because the initiative will be thrown out as unconstitutional.

IT WOULD BE THE THIRD court battle for an Eyman initiative. Right now, he's 0-for-2 when challenged on constitutional grounds. Eyman is confident the courts will uphold his latest measure. "I-776 was carefully drafted by Jim Johnson, a well-respected appellate attorney," he states. "We paid him handsomely to thoroughly research all legal issues pertaining to I-776. I-776 is rock solid."

Johnson, who is running for the open seat on the state Supreme Court, gives a very different version of events. "I didn't write I-776," Johnson says flatly. "It's not my area of expertise." Johnson says Permanent Offense, Eyman's group, "came to me with a particular issue."

The big legal challenge I-776 faces is rooted in contract law. Lawyers on both sides agree that the state and federal constitutions make it clear that you cannot pass a new law that impairs an existing contract. The disagreement comes when lawyers opine about whether I-776 does that.

In 1999, Sound Transit sold $350 million worth of 30-year bonds to finance all three lines of business it engages in—express bus, commuter rail, and light rail. Those bonds represent a contract with the people who purchased them.

King County deputy prosecutor Jeff Richard says I-776 clearly violates contract law. Richard says the agency has pledged to investors, "As long as any bonds remain outstanding, Sound Transit shall levy a motor-vehicle excise tax." He notes, "It's clear that I-776 would impair that contract."

Johnson disagrees. He argues that because the bonds are "callable"—they can be paid off at any time—the contract will not be impaired if Sound Transit simply pays them off early. Under I-776, Sound Transit would be directed to pay off the bonds with "reserve funds," "sale of property," or "new voter-approved revenues." Johnson says I-776 "isn't an impairment of contract because [the investors] agreed these bonds are callable."