Is it a tax or not? Attorney general sued over controversial ballot language

Washington Rep. Jim Walsh, R-Aberdeen, sued Attorney General Bob Ferguson Monday over what Walsh calls “warning labels” the attorney general must include on the ballot and in the voters’ pamphlet.

The lawsuit claims a 15-word fiscal impact statement required by law on measures involving state funding “does not apply” to the initiatives.

“These fiscal impact statements are highly controversial,” Walsh told KIRO Newsradio. “The bill that created them was very partisan.”

It comes down to the interpretation of House Bill 1876, a law the legislature passed and Democratic Gov. Jay Inslee signed into law in 2022. It’s the first time HB 1876 has come into play in an election. (A PDF of the bill analysis can be found here.)

The law says fiscal impact disclosure must appear on the ballot within the ballot title for “any measure that repeals, levies, or modifies a tax or fee” and would cause a net change in state revenue.

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Looking more at the initiatives

Voters in November will decide the fate of three initiatives that Walsh filed on behalf of their backers.

Initiative 2109 repeals a capital gains tax on the sale of stocks and bonds over $262,000.

Initiative 2117 would overturn the Climate Commitment Act, a signature piece of legislation for Inslee.

Initiative 2124 allows workers to opt out of the state’s long-term care program.

Walsh argues the Democratic majority which passed the bill went to great lengths not to call the underlying legislation of the initiatives a “tax or fee.”

“The governor and attorney general argued these were something different. They were costs or fees in some cases,” Walsh said. “OK, fine. So, you’re sneaking them in saying they’re not taxes but now saying fiscal impact statements are supposed to apply to taxes. They are trying to have it both ways.”

Attorney General Bob Ferguson is the leading democratic candidate to replace Inslee who is leaving office after three terms.

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On their face, all three initiatives would have a monetary impact on the state’s collection of taxes.

The disclosure required on the ballot and voter pamphlet must be drafted by the attorney general, who may consult with the Office of Financial Management or other state and local agencies as needed and is not subject to appeal.

“They are basically editorializing on the anticipated tax and fiscal impacts of various initiatives, particularly initiatives that affect either by cutting or, in theory, increasing taxes,” Walsh said.

He is calling the 15-word statement “political spin” by the governor, the Washington State Office of the Attorney General, and the state’s Office of Financial Management.

“Together, they can come up with, basically scare tactics to frighten voters about the fiscal impacts of various initiatives that involve tax reform. And it’s politics. It’s pure politics,” Walsh stated.

Responses to Rep. Walsh’s lawsuit

Ferguson did not respond directly to Walsh’s lawsuit, but Washington Solicitor General Noah Purcell did, calling the lawsuit, “a meritless attempt to deny voters information.”

Purcell, who works for the Office of Attorney General in his role, called Walsh’s interpretation of the new financial impact disclosures law “bizarre.”

He said Walsh’s argument that the Legislature already silently repealed the capital gains tax under Initiative 2117, therefore, an impact statement is no longer needed, is “inaccurate.”

Purcell also called Walsh’s claim that the initiative repealing the Climate Commitment Act doesn’t need an impact statement because it doesn’t involve the repeal of taxes and fees inaccurate as well.

The same holds true for Walsh’s argument regarding the initiative to opt out of the long-term care tax.

In summary, Purcell wrote there was no basis for prohibiting a financial impact statement on the ballot for all three initiatives.

“All three repeal or modify taxes or fees and all three have significant fiscal impacts,” Purcell said.

Purcell asked the Thurston County Superior Court, where the complaint was filed, to reject the lawsuit calling it a “cynical attempt to keep voters in the dark.”

A hearing will be held Friday at the courthouse in Olympia.

Matt Markovich often covers the state legislature and public policy for KIRO Newsradio. You can read more of Matt’s stories here. Follow him on X, or email him here.

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