Possible constitutional challenge to income tax initiative spotlighted during hearing

During a public hearing Tuesday in Olympia on Initiative 2111 (I-2111), aimed at preventing any city, county and state from enacting a personal income tax, the possibility of a constitutional challenge was put on center stage.

Despite state law already prohibiting a personal income tax, more than 400,000 people signed the initiative making a tax on person’s annual gross income illegal in the state.

Earlier coverage: 3 of Washington’s 6 citizen initiatives get legislative hearings

State voters have rejected 11 ballot measures that would open the door to a state income tax.

But behind the scenes, opponents, namely many Democrats in both the House and Senate, have been searching for legal landmines that could render the initiative invalid.

Opponents may have tipped their hand during Tuesday’s hearing during what appeared to be a scripted exchange between Sen. Jamie Pedersen, D-Seattle, and Jeff Mitchell, a staff member for the Senate Ways & Means Committee.

Peterson, who is the majority floor leader in the Senate, asked Mitchell how the initiative defines income.

Mitchell said the definition is tied to the federal tax code’s definition of gross income and there was no date on when the federal government established that definition.

Peterson then asked, “Without that limitation of a particular date, what are the risks the initiative is taking?”

Without a date, Congress could change the federal tax code’s definition of gross income at any time.

“The state Supreme Court has ruled that an attempt to incorporate future changes in federal laws or regulations is an invalid delegation of legislative power,” Mitchell replied.

In the context of Initiative 2111, Mitchell said because Congress could change the definition of gross income in the future, the initiative could violate the State Supreme Court ruling of giving another legislative body like Congress the power to alter state law.

Mitchell said the initiative, if adopted, “it would be based on the future judgment of the federal government without state legislative approval, potentially violating this principle.”

It was the first visible exposure of a potential court challenge the initiative could face if either the legislature adopts it, or voters approve it in November.

The positives and negatives of the income tax initiative

The remaining 40 minutes of the hearing were left to public testimony about the pros and cons of the bill.

Lawmakers, in a rare joint committee session that featured both House and Senate lawmakers. heard just a few of the 213 people signed up to testify.

There were 6,674 people who did not want to testify but registered the pro or con feeling online. The vast majority of those signed up to testify and those offering an online opinion were in favor of passage.

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Constitutionally, state lawmakers have three choices when an initiative to the legislature is certified, as is the case with I-2111.

First, the legislature can adopt the initiative as proposed, word for word, in which case it becomes law without the approval of the governor or a vote of the people.

Second, the legislature can reject or take no action on the measure. In either case, the measure will automatically appear on the November ballot.

And third, lawmakers can propose an alternative measure that will appear next to the initiative on the November ballot. The Democratic majority in the House and Senate have indicated they have no plans to propose an alternative to I-2111.

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, formerly known as Twitter, or email him here.

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