Opinion ID: 2575803
Heading Depth: 2
Heading Rank: 1

Heading: Tax Set by Unelected Board; Taxation Without Representation

Text: ¶ 41 The Monorail MVET tax is invalid because it was set by an unelected board in violation of a fundamental constitutional principle of no taxation without representation. By this principle, only elected or legislative bodies may exercise the power of taxation. [1] Unelected bodies cannot be delegated the legislative power to tax citizens. Here, the power of establishing taxation levels was improperly delegated to an appointive, nonlegislative body  the Board. The majority of the Board is not accountable to the people through elections (only two were elected). The power to tax cannot be delegated to such a board under our constitution because neither the legislature nor the people can alienate this essential legislative function. ¶ 42 No taxation without representation is a fundamental principle vindicated in the American Revolution, by the adoption of the United States Constitution, and adhered to throughout this nation prior to Washington's admission to statehood. [2] ¶ 43 Adherence to the principles of the United States Constitution and of the Declaration of Independence was an express condition of our admission to the Union as a state on equal footing. The State's Enabling Act provides: That the delegates to the conventions elected as provided for in this act shall meet at the seat of government of each of said Territories . . . and, after organization, shall declare, on behalf of the people of said proposed States, that they adopt the Constitution of the United States; whereupon the said conventions shall be, and are hereby, authorized to form constitutions and States governments for said proposed states, respectively. The constitutions shall be republican in form, and make no distinction in civil or political rights on account of race or color, except as to Indians not taxed, and not be repugnant to the Constitution of the United States and the principles of the Declaration of Independence. Enabling Act, ch. 180, sec. 4, 25 Stat. 676 (1889). [3] ¶ 44 The Washington State Constitution begins with the recognition that [a]ll political power is inherent in the people, WASH. CONST. art. I, § 1. The power to tax must derive from delegation of the peoples' power under our state constitution. See also WASH. CONST. art. I, § 19. Article I, section 32 states: A frequent recurrence to fundamental principles is essential to the security of individual right and the perpetuity of free government. ¶ 45 Washington Constitution article XI, section 12 and article VII, section 9 do empower the legislature to delegate taxing authority to local governments, but the legislature may make such delegation only to elected bodies that are directly accountable to citizens. ¶ 46 This court's case law recognizes taxing power as inherently legislative. Taxes are defined to be `burdens or charges imposed by legislative authority on persons or property, to raise money for public purposes . . . .' State ex rel. Nettleton v. Case, 39 Wash. 177, 182, 81 P. 554 (1905) (quoting 27 AM. & ENG. ENCY. LAW 578 (2d ed.1905)). It is elementary that the power of taxation, subject to constitutional limitations, rests solely in the legislature. State ex rel. Tacoma Sch. Dist. v. Kelly, 176 Wash. 689, 690, 30 P.2d 638 (1934); Love v. King County, 181 Wash. 462, 467, 44 P.2d 175 (1935). [4] ¶ 47 Prior cases also affirm constitutional limits on the legislature's grant of taxing authority. It is a legal tenet, universally accepted, that the power of a county or other municipal corporation to tax is not an inherent, but a delegated, power. Love, 181 Wash. at 468, 44 P.2d 175 (citing 1 Thomas M. Cooley, THE LAW OF TAXATION §§ 119, 122, at 264, 276 (4th ed.1924)); Great N.R. Co. v. Stevens County, 108 Wash. 238, 243, 183 P. 65 (1919); State ex rel. Sch. Dist. v. Clark County, 177 Wash. 314, 322, 31 P.2d 897 (1934). Municipal corporations have no inherent power to levy taxes. Their powers are derived through legislative grant, and are strictly construed. No implications are indulged to expand the powers granted. Kelly, 176 Wash. at 690, 30 P.2d 638 (citing 1 Cooley, supra, §§ 123, 124, 125). ¶ 48 In Malim v. Benthien, 114 Wash. 533, 196 P. 7 (1921), this court held that fairness and equality required that residents outside a district and without a voice in selecting its officers should not be subject to its taxing power. Malim, 114 Wash. at 539, 196 P. 7. To uphold such a course would be a denial of the principle [of no taxation without representation] upon which our government is founded, and which as a nation we have always maintained is the only true principle upon which a free government can be founded and maintained. Id. ¶ 49 Similarly, in State ex rel. State Tax Commission v. Redd, 166 Wash. 132, 6 P.2d 619 (1932), this court voided a statute requiring a county to tax local lands in accordance with the (unelected) state tax commission's valuation. This court recognized its obligation to `give force and effect to the principle of local self-government which has always been regarded as fundamental in our political institutions, and to be the very essence of every republican form of government.' Id. at 144, 6 P.2d 619(quoting People ex rel. Town of Pelham v. Vill. of Pelham, 215 N.Y. 374, 382, 109 N.E. 513 (1915)). It observed: The power of taxation is, of all the powers of government, the one most liable to abuse, even when exercised by the direct representatives of the people, and if committed to persons who may exercise it over others without reference to their consent, the certainty of its abuse would be simply a question of time. Id. at 141, 6 P.2d 619(quoting Harward v. St. Clair & Monroe Levee & Drainage Co., 51 Ill. 130, 135 (1869)). ¶ 50 The later case of Municipality of Metropolitan Seattle v. City of Seattle, 57 Wash.2d 446, 357 P.2d 863 (1960), suggests taxing authority can be delegated to appointed boards, but only if those boards are composed of members who hold an elective office. The board in Metropolitan Seattle consisted entirely of elected officials automatically appointed to the board. This court held the appointed officials to be sufficiently accountable to the people subject to taxation because they were appointed from amongst the ranks of elected officers residing within the region. Id. at 454, 357 P.2d 863. ¶ 51 More recently, the dissenting opinion in Granite Falls Library Capital Facility Area v. Taxpayers of Granite Falls reiterated our state constitution's respect for the principle of no taxation of representation. 134 Wash.2d 825, 848, 953 P.2d 1150 (1998) (Sanders, J., dissenting) ([T]axation without representation was not popular with the colonists then and is unconstitutional today.). ¶ 52 Granite Falls involved a constitutional challenge to the establishment of a library taxing district governed by three appointed members from the Snohomish County Council. The dissent concluded that [t]he Legislature may not constitutionally grant the power of taxation to persons over whom the taxpayers can exercise no control. Id. at 845, 953 P.2d 1150(citing Redd, 166 Wash. at 141, 6 P.2d 619). The dissent found that [b]ecause the governing body is vested with the power to tax, it must either be directly accountable to taxpayers or limited by sufficient procedural safeguards. Id. at 847, 6 P.2d 619. The governing board was not subject to direct election and taxpayers living in the library district could not recall or vote out of office board members who were not from the district. See id. at 847-48, 6 P.2d 619. ¶ 53 The Monorail MVET does not satisfy these constitutional requirements. The Monorail Board is not directly elected by the citizens of Seattle, nor do sufficient procedural safeguards control its use of taxing power. The majority of appointed members do not hold elected positions. ¶ 54 The majority points to possible safeguards against abuse in holding that this MVET is constitutional. See majority at 897. Such safeguards cannot overcome the constitutional defect in placing tax setting power in the hands of board members who are neither directly elected by the people nor comprised of elected officials. No viable alternative means for holding SMP [Monorail] Board members accountable for their tax related actions actually exists, resulting in a scenario where board members are left primarily to police themselves. Matthew Senechal, Revisiting Granite Falls: Why the Seattle Monorail Project Requires Re-examination of Washington's Prohibition on Taxation without Representation, 29 SEATTLE U.L.REV. 63, 91 (2005). With only two of the Monorail Board's nine members elected by voters, [5] it cannot reasonably be held to represent or to be directly accountable to the people it taxes.