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"City opts for legal challenge to I-722The property tax initiative would cost the city millions, officials say."
"The city of Bainbridge Island will sue to overturn Initiative 722, the Son of 695, passed by Washington voters Tuesday. And it will be in good company, as the cities of Seattle, Burien, Carnation and Pasco have launched their own legal challenges to the tax-cutting measure.I certainly feel confident, Mayor Dwight Sutton said Thursday, a day after the city council unanimously approved a legal challenge.We're convinced that its constitutionality is highly suspect.Intended to force property-tax relief, I-722 included several provisions: 1) Rolling back local tax and fee increases approved since July 1999, and forcing governments to refund those monies to taxpayers, and;2) Limiting the increase in property valuations to 2 percent or the rate of inflation annually, whichever is less.The initiative earned better than 60 percent approval statewide, 57 percent in Kitsap County. Precinct breakdowns showing how it fared among Bainbridge voters - who resoundingly opposed I-695 a year ago, will not be available for several weeks.But despite its apparent popularity, the initiative is seen as ripe for a legal challenge.Critics say I-722 would violate the state Constitution, because it would cause properties in rapidly appreciating areas like Bainbridge Island to be taxed at a lower effective rate than those in slow-growth or rural districts, shifting the overall tax burden to less-affluent areas. Of immediate concern to Bainbridge officials, though, is the effect it would have on city coffers this year. Finance Director Ralph Eells said that if it stands, the initiative would immediately cost the city $4.5 million in refunds and lost revenue.That, he and other officials said, would mean the elimination of city departments.The effect would be brutal, Eells said.Somewhat unusual in the Bainbridge Island challenge is the claim that the initiative would prevent the city from paying back $4.9 million in bond debt, issued last year for various capital improvements.Eells said the courts have ruled that voters cannot impede a city's ability to pay back legally issued bonds, which curtailing revenues to that degree would effectively do.There is also a practical question, Eells said, because of the indirect collection of many taxes. Among the measures implemented last year to blunt the impact of I-695 was a higher tax on commercial parking lots. To whom, Eells asked, would a refund go?We haven't the foggiest clue who paid us, Eells said, or how much they paid.It will be the city's second legal challenge to a popular initiative in a year. Last fall, Bainbridge Island joined Bremerton in a successful challenge of I-695, the father of I-722 also drafted by Mukilteo watch salesman Tim Eyman.That measure - which included a provision mandating a public vote on all tax and fee increases - was struck down by a superior court judge, a decision recently affirmed by the Washington State Supreme Court.Bainbridge officials at that time were buttressed by precinct results showing island voters opposed I-695 by nearly 3-1 at the polls. This year, Sutton and others in the administration were talking about a legal challenge even before the election, and didn't waste any time afterward.It's kind of a simplistic view that government is wasteful and running wild with spending, Sutton said. Having seen it from the inside, I don't believe that's true.I sympathize that taxes are high, but this is not the way to ensure responsible government.The lawsuit will seek an injunction against the Kitsap County Assessor's Office, which is responsible for local tax collection, to prevent implementation of the initiative.The council Wednesday earmarked $10,000 for legal fees for the challenge. The city will retain the Seattle firm of Foster Pepper Shefelman, which was in the vanguard of the I-695 challenge.Eyman's other initiative on Tuesday's ballot, I-745, would have mandated spending 90 percent of transportation funds on road construction and maintenance. That measure was defeated by voters. "