Opinion ID: 2570667
Heading Depth: 3
Heading Rank: 2

Heading: Seattle's Tax and SPU's Rate Increases Are Constitutional

Text: ¶ 24 Lane complains that Seattle is frustrating the holding in Okeson. He argues that raising taxes on SPU and passing the increases along to ratepayers is just the same as SPU charging ratepayers for hydrants. The problem with the argument is that Okeson did not go so far as Lane would take it. ¶ 25 We voided the charge in Okeson because Seattle did not adopt the charge as a lawfully authorized tax, violating article VII, section 5 of the state constitution, and because a tax would have exceeded the six percent statutory limit. Either reason was sufficient to support our holding in its entirety. Okeson, 150 Wash.2d at 556-57, 78 P.3d 1279. We simply held that if Seattle wanted to charge Seattle City Light ratepayers for streetlights, it would have to comply with statutes in enacting the tax (with the attendant possibility of a referendum, WASH. CONST. art. II, § 1(b)). Such tax, if adopted, would be subject to the applicable statutes and a six percent total cap. ¶ 26 Seattle has complied here. It explicitly said it was taxing SPU, the tax was properly adopted, and the tax expressly stated it was subject to referendum. Also, the six percent limit referenced in Okeson does not apply to taxes on businesses providing water. RCW 35.21.710; RCW 82.16.010(4). Seattle has statutory authority to impose this tax on SPU (RCW 35.22.280(32)). ¶ 27 Lane's whole argument rests on our constitution's requirement that [n]o tax shall be levied except in pursuance of law;. . . . WASH. CONST. art. VII, § 5. He argues that imposing a tax with the same effect as SPU's charging ratepayers for hydrants is contrary to the law announced in Okeson. ¶ 28 This argument fails for the same reason as above. The law is not that Seattle must charge for hydrants to a broad range of taxpayers. Instead, it is simply that cities must have statutory authority to impose taxes and must enact them properly as taxes. This tax meets both requirements. The tax and the resulting rate raise are lawful.