Court Opinion

ID: 9551801
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:59:24.394593+00
Date Added: 2024-06-11T15:24:40.121873
License: Public Domain

Neill, J.
(dissenting) — A critical examination of the relevant facts and circumstances presented by this case convinces me that today’s majority opinion dictates a result precisely the opposite of what it purports to be — a result which disrupts revaluation programs throughout the state, and which prolongs a condition of property tax favoritism. The beneficiaries of today’s decision own, at most, 6 per cent of the taxable parcels of real estate in King County. These parcels are in an area of the county which enjoys something of a “tax shelter” in that it generally has not been revalued ■ since 1961,-while most of the county has *769been revalued as recently as 1968. The victims are the owners of the remaining 94 per cent of taxable property whose 1971 taxes are based upon assessments more nearly approaching the constitutional standard of 50 per cent of current true and fair value. These include (a) owners of other parcels in the “Jacobs” area itself, (b) owners of those other parcels in King County, revalued in the same period, which account for 65 per cent of the year’s true increase in assessed value and for over 80 per cent of the year’s true increase in property taxes in the county, (c) owners of some 400,000 other parcels in King County as to which taxes are based upon more recent valuations, and (d) to the extent that today’s result inhibits revaluation in other counties, owners of parcels throughout the state who will have to tolerate a prolonged period of unequal tax treatment.
Prior to the complained-of revaluations, parcels within the “Jacobs” area had a coefficient of dispersion of over 20.1
*770This indicates a high degree of unequal tax treatment within the “Jacobs” area. The area, as a whole, was the most undervalued in the county and, within the area itself, some taxpayers were getting a freer ride than others. After the’ 1969-70 revaluations', the coefficient of dispersion was less than 15. That is, a high degree of uniformity in tax treatment had been achieved within the district. Today’s majority decision vitiates that result and prolongs a situation of nonuniformity.
Owners of the approximately 423,000 parcels outside the “Jacobs” area are, by virtue of the majority decision, subjected to a greater tax burden. Some 22,000 of these were revalued during the same time as the “Jacobs” area parcels. The rest are on the rolls at valuations established in 1963 or later. Many, if not most, have been revalued since 1966. Today’s result is at the expense of other King County property taxpayers.
To elucidate,' taxes are not the result of assessments alone. In fact, under our constitutional scheme of property taxation, the assessment (assessed value) of property is pegged at .50 per cent of true and fair value. Recognizing that the ultimate tax burden is determined by a variable (the millage levied), the people have placed in our constitution a ceiling on permissible millage. This so-called “40 mill tax limit” may be exceeded only by the vote of the electorate within a taxing district. In this connection, it is of interest to note that the current millage levied in the portion of King County containing the “Jacobs” area is almost exactly one-half special levies voted by the people and one-half regular levies established by budgets prepared by the governing bodies of local taxing districts.
The assessed value of property is merely an inventory figure which arises from market factors and not from the action of the electorate or their elected governing bodies. Rather, the ultimate tax burden is established by dividing the aggregate of the assessed value of property in the area into the total revenue demands arising from the budgets of *771the taxing districts including amounts voted by the people. RCW 84.52.010; 84.52.054.
It is thus apparent that a reduction in tax burden is best achieved by attacking the level of governmental expenditure, both those expenditures approved by direct vote of the electorate and those established by budgetary action of elected representatives. This is the most efficacious approach as it has a direct bearing on all taxpayers in the taxing district. A reduction of assessed value alone, to the extent that it applies to only some of the taxpayers in the area, is unavoidably at the expense of the other taxpayers in the area.
Today’s decision, operating only to reduce the assessed value of a few of the county’s tax parcels, leaving the revenue requirements intact as it must, obviously results in the majority of the county’s taxpayers having to “pick up the slack” in the form of increased taxes on their property.
Plaintiffs do not contend that their taxes derive from assessments exceeding 50 per cent of fair market value; nor is there basis for such contention in the record. Rather, the essence of plaintiffs’ complaint is that their parcels are currently less undervalued than others. From this, it is asserted that the uniformity requirement has been violated. Plaintiffs further contend that equal protection has been denied them in that only their portion of “phase one” of the 4-year revaluation plan was enrolled for 1971 taxes.
Plaintiffs’ position is not entirely equitable. The parcels involved in the “Jacobs” area are the oldest, in terms of assessment, in the county. Land valuations date back to 1961, and building valuations were “cra2;y quilt” of differing valuation years. Thus, as a general ride, these parcels had a 10-year reprieve between valuations. The record indicates that, during that time, property values in the “Jacobs” area were increasing as much as 8 per cent annually. Yet, assessments remained at the 1961 level while most of the other parcels in the county were taxed upon more recent valuations. In my view, the stronger equities rest with these other parcels.
*772Defendant’s activities are hardly so reprehensible as painted by the majority. A more accurate portrayal takes into account the preexisting situation. When, in September of 1969, we decided the case of Carkonen v. Williams, 76 Wn.2d 617, 458 P.2d 280 (1969), the following situation (as of 1966) was discussed: The budget of the King County Assessor allowed him to retain “only 81 qualified appraisers.” There were about 400,000 parcels in the county and revaluation was proceeding on 6 to 8-year cycles. In 1966, the county’s average assessment ratio was 23.7 per cent of true and fair value, and samplings of current sales denoted a 19.8 per cent indicated ratio.
Prior to the effect of Carkonen v. Williams, supra (i.e., a doubling of the old King County stated ratio from 25 per cent to 50 per cent), property in the “Jacobs” area was at an indicated ratio of 13.79 per cent.
In Carkonen we rejected arguments quite similar to those of plaintiffs’. There it was asserted that portions of plaintiffs’ taxes were in contravention of constitutional equal protection and uniformity provisions. We said (76 Wn.2d at 625):
As we have noted, the evidence revealed and the trial court so found — indeed it is common knowledge — that the practice of disparate underassessing at the county level is and has been statewide and one indulged in for many years if not, in fact, a carry-over of sorts from territorial days. Although the practice of underassess- . ment, and the inability to effectively bring about a uniform compliance with the constitutionally required assessment ratio, have in a large part contributed to the imbroglio of the state’s tax structure, nevertheless, the trial court conceived, and we concur, that an abrupt and retroactive application and enforcement of the appropriate assessment ratio would serve no immediate and useful purpose.
With specific reference to the cyclical revaluation statute, RCW 84.41.030, we noted that (76 Wn.2d at 630, 632):
i [N] either the. King nor Snohomish County Assessors have fully complied with the import of RCW 84.41.030. The King County Assessor, by reason of volume of work, *773limited staffs and budgets, had proceeded on what amounts to a 6 to 8-year cycle of revaluation, depending to some degree on the type of property involved. . . .
The evidence indicates quite clearly that, to the best of their ability, and with their limited staffs, the assessors involved were honestly endeavoring to pursue a systematic nondiscriminatory cyclical approach to revaluation. In this vein it is to be borne in mind that the statute (RCW 84.41.040) requires a physical inspection of each of the parcels revalued and that King County had some 400,000 and Snohomish County some 250,000 parcels subject to revaluation. The sheer physical problem of annually inspecting the units of property involved, coupled with the staff and budgetary allocations required to accomplish such, lends wisdom to the legislative act authorizing and directing a cyclical approach, and virtually lays to rest any viable claim to intentional discrimination inhering in the system.
Furthermore, it appears from the evidence that in annually posting their revaluations the assessors were not only following the direction of RCW 84.40.020 but were also pursuing a statewide practice. And, from the evidence adduced, it is not at all clear that by adopting the “hold back” and “base year” approach advocated by plaintiffs such a system would in fact produce, under the circumstances prevailing, any greater equality than that arising out of the cyclical system. Lastly, the evidence does not disclose any gross or flagrant overvaluations insofar as any of plaintiffs’ properties be concerned. Rather, plaintiffs predicate their attack upon assessment ratios, which in no case equal the 50 per cent ratio required by the constitution, and for the most part show only a disparity between counties and within the school district of approximately 5 per cent.
(Italics mine.) And we discussed the problem of cyclical revaluation in View of equal protection and tax uniformity principles (76 Wn.2d at 632-34):
In Sunday Lake Iron Co. v. Township of Wakefield, 247 U.S. 350, 62 L. Ed. 1154, 38 S. Ct. 495 (1918), in denying relief to a taxpayer claiming an increase in property valuation violated the equal protection clause of the federal constitution, the court stated, at 352:
*774The purpose of the equal protection clause of the Fourteenth Amendment' is to secure every person within the State’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents. And it must be regarded as settled that intentional systematic undervaluation by state officials of other taxable property in the same class contravenes the constitutional right of one taxed upon the full value of his property. [Citing case.] It is also clear that mere errors of judgment by officials will not support a claim of discrimination. There must be something more — something which in effect amounts to an intentional violation of the essential principle of practical uniformity. The good faith of such officers and the validity of their actions are presumed; when assailed, the burden of proof is upon the complaining party. [Citing cases.]
The record discloses facts which render it more than probable that plaintiff in error’s mines were assessed for the year 1911 (but not before or afterwards) relatively higher than other lands within the county although the statute enjoined the same rule for all. But we are unable to conclude that the evidence suffices clearly to establish that the State Board entertained or is chargeable with any purpose or design to discriminate. Its action is not incompatible with an honest effort in new and difficult circumstances to adopt valuations not relatively unjust or unequal.
In keeping with the import of the Sunday Lake decision, state courts which have considered cyclical revaluation programs have generally found, them to be compatible with constitutional equal protection and uniformity provisions, provided they be carried, out systematically and without intentional discrimination. Hamilton v. Adkins, 250 Ala. 557, 35 So. 2d 183, cert. denied, 335 U.S. 861, 93 L. Ed. 407, 69 S. Ct. 133 (1948); Skinner v. New Mexico State Tax Comm’n, 66 N.M. 221, 345 P.2d 750, 76 A.L.R.2d 1071 (1959). Arid, for similar but not identical impont, see cases cited and discussed in Tax— Incomplete Equalization Program, Annot., 76 A.L.R.2d 1077 (1959).
This court, too, has considered, in part at least, the problems arising out of a cyclical program in Mason County *775Overtaxed, Inc. v. County of Mason, 62 Wn.2d 677, 384 P.2d 352 (1963). In that case, it appeared that the Mason County Assessor was pursuing cyclical revaluation as set forth in RCW 84.41.030, which in turn produced substantial increases in the plaintiffs’ property valuations as those properties were reached in the cyclical process. In denying the plaintiffs relief, we pointed out that the assessment ratio is predicated upon the market value of the property involved at the time of its valuation and that .increases in real-estate assessments, without more, is as consistent with a preceding undervaluation, as it is with the idea of a current excessive valuation, and, upon these premises, held that the plaintiffs had failed to establish that their property had in fact been overvalued.
The same is true in the instant case.
Accordingly, we conclude that, although each of the assessors involved were precluded by fiscal, personnel, volume, and time considerations from precisely adhering to the statutorily designated cyclical schedule or from conducting annual total revaluation programs, it has not been shown that their honest attempts at compliance resulted in intentional discrimination, arbitrary action, constructive fraud, or grossly and relatively unfair assessments contrary to constitutional provisions relating to equal protection and uniformity.
Finally, we stated (76 Wn.2d at 635):
Again, as to plaintiffs’ contentions, we find no gross or flagrant inequalities, intentional discrimination or constructive fraud springing from the actions of the King County Assessor. Although the practices may not be in strict conformity with the law, they do not render the resultant assessment void. Ballard v. Wooster, 182 Wash. 408, 45 P.2d 511 (1935).
Capsulized, Carkonen establishes that the constitutional 50 per cent requirement is mandatory, but does not require immediate and absolute uniformity. In this latter area, reality intervenes so that constitutional and statutory standards are considered satisfied by a cyclical revaluation program — so long as the program is systematic and without intentional discrimination. There is nothing inherently discriminatory in cyclical revaluation, that is, “intentional dis*776crimination” is not established by the fact that some parcels are revalued while others in the taxing area are not.
Pending the time when technology enables instant, total revaluations, cyclical revaluation on the shortest feasible cycles is the best that can be expected. In Carkonen we recognized that circumstances may be such that even the statutory 4-year cycle cannot be achieved. Such failure does not, ipso facto, void the resulting assessment. Carko-nen v. Williams, supra; Ballard v. Wooster, 182 Wash. 408, 45 P.2d 511 (1935). No evidence was adduced in Carkonen, and. I find none here, that such alternative approaches as “hold back” and “base year” provide any better equality in tax treatment. Until something better is put forward, the cyclical system is sufficient.
The majority declares that the facts of this case distinguish it from Carkonen, in that the taxes here are grossly discriminatory. In support of this conclusion, the majority observes that the “Jacobs” area consists of only 6 per cent of the total parcels in the county, that the county failed to achieve the goals set for “phase one” in its contract with the state, and that the pace of revaluation in the period involved did not approximate a 4-year cycle.
These practices, though falling short of goals and failing to comply with strict statutory requirements, do not render the resulting assessment void. RCW 84.41.020;2 Carkonen v. Williams, supra, and cases cited. Failure to live up to the “phased” revaluation scheme contemplated in the contract subjects the county, at most, to possible loss of state financial assistance. The relevant statute (Laws of 1969, Ex. Ses., ch, 282, § 4) neither states nor intimates that such revaluations as are achieved will be nullified.
*777Furthermore, the percentages are somewhat misleading. Although only the. “Jacobs” area was revalued during this period as part of the “phased” plan, other parts of the county were also revalued for the 1970 assessment rolls. The majority would ignore these because they will again be revalued within the “phased” plan. But the statute (RCW 84.41.030) calls for revaluation “at least” every 4 years, and I see no reason for ignoring these parcels simply because they will be again revalued. The relevant fact is that 22,000 parcels, uncredited by the majority, were revalued during the 1969-70 period. Another relevant fact is that the “Jacobs” area revaluations were not the result of a full year’s effort. Since the plan did not commence operation until November of 1969, we are talking about a 7-month period from then until the May 31, 1970, cut-off date. If my mathematics are correct, this means that the rate of revaluation for that period would have covered about 50,000 parcels, given a full year. The game of strategic statistics thus gives a percentage of 16 per cent (72,000/450,000), rather than 6 per cent. That is, during this period, the revaluation cycle was proceeding at a 6-year pace. In addition, the county placed some 6,600 new valuations on the 1970 rolls, and performed partial revaluations of 7,000 other parcels.
In 1966, a King County Assessor’s staff of 81 appraisers was reassessing 400,000 parcels on a 6 to 8-year cycle. The stated ratio was 23.7 per cent, and the indicated ratio was 19.8 per cent for the county generally, but only 13.79 per cent in the “Jacobs” area. As of January 1, 1970, the assessor’s office, with a staff of only 60 (plus assistance from the Jacobs Company), was reassessing 450,000 parcels on a 6-year cyclical rate. The stated ratio was 50 per cent, and the indicated ratio was 37.12 per cent generally and 46.83 per cent in the “Jacobs” area. This productivity, better than that upheld in Carkonen, was obtained despite the facts that the assessor’s office was undertaking a new program and that the program began and was for the most part conducted under the impediment of winter weather. Statis*778tically, the revaluation process seems to have been satisfactory in this period.
The focus of revaluation in 1969-70 was upon those areas which had escaped revaluation for the longest period of time. As previously noted, the “Jacobs” area was, in general, the oldest of them all. In addition, there were 10 “spot” areas throughout the county of very old valuations. These were the areas, containing some 22,000 parcels, which the assessor’s office revalued during this period, and to which the majority refers as “piecemeal revaluation.” I agree that the revaluations were fragmented, but the revaluation was also systematic in the sense, more important than geography, of reassessing the “oldest” valuations first.
In my view, there is no invidious discrimination in the revaluation procedure involved in this case. We observed in Carkonen that a large increase in assessed value is as consistent with prior undervaluation as it is with current overvaluation. The record shows that such is precisely the case here. If there is unfairness, it is that which was imposed upon the other citizens of King County prior to this revaluation, and which the majority reimposes today.
For the reasons stated, I believe that plaintiffs have failed to show any gross inequity or bad faith on the part of defendants. The burden is plaintiffs’, and they have not met it. Carkonen v. Williams, supra. To the contrary, the record shows that defendants were engaged in an honest endeavor to establish and pursue an improved “systematic nondiscriminatory cyclical approach to revaluation.” New impediments should not be imposed on this endeavor. I would affirm the judgment of the trial court.
I have joined in the dissent of Justice Stafford that this is not a class action. From the standpoint of uniformity in valuations, today’s result favors some “Jacobs” area taxpayers to the detriment of others in the same area. Consequently, the outcome of today’s decision favors only 11 of the approximately 450,000 parcels in King County. Even if this were a proper class action as to 27,000 parcels, we would .be dealing with only about 6 per cent .of the parcels *779in King County. As it is, absent class action features, we deal with a fraction so small that it disappears in the decimal places (less than 3/1,000 of 1 per cent). I believe the other 99.997 per cent of the taxpaying units merit more consideration. Their interests are substantial as well as massive.
Not heretofore having an opportunity to do so, I now express my disagreement with the issuance by this court in this cause of a temporary injunction prohibiting collection of 1971 taxes based on revaluations in the “Jacobs” area. We thereby departed from established precedent and statutory proscription.
We stated in Room, v. King County, 24 Wn.2d 519, 166 P.2d 165 (1946), that when the taxpayer’s statutory right to pay a questioned tax under protest provides an adequate legal remedy, then the statutory remedy is exclusive. In the course of that decision, we observed at page 528:
The essential purposes of the 1931 act were, and are, to furnish an adequate and sufficient remedy to the taxpayer in case of an illegal or unjust assessment for taxes, and, at the same time, to provide an expeditious method by which the various branches of government affected could obtain the revenue necessary to their maintenance, without protracted delay or the hazards incident to the former method of procedure. We believe that the appellant had a remedy that was plain, simple, speedy, adequate, and complete; . . . Under such circumstances, we see no occasion for the intervention by a court of equity or for the exercise of its inherent powers with respect to matters involving the legality of a tax.
See also Shamley v. Olympia, 47 Wn.2d 124, 286 P.2d 702 (1955); Ballard v. Wooster, 182 Wash. 408, 45 P.2d 511 (1935). Cf., O’Brien v. Johnson, 32 Wn.2d 404, 202 P.2d 248 (1949).
RCW 84.68 recognizes the several legitimate interests in property tax disputes. In addition to the unlitigated claims of the dissatisfied taxpayer, there is the interest of the public in seeing that taxes are timely and expeditiously collected. Further, there is the interest of the other taxpay*780ers (iri this case, the owners of something in excess of 423,000 parcels) in seeing that all taxpayers share the burden of timely payment. Our cases recognize these interests, and stand for the proposition that the dissident taxpayer must accept the statutory relief of RCW 84.68 when that method is available and adequate.
I fail to see the inadequacy of the statutory remedy for plaintiffs. Their complaint is that a portion of their taxes have been illegally imposed. That is the complaint of all adjudicating taxpayers. If it were a reason for enjoining collection, then RCW 84.68 and its recognition of countervailing interests' of the public, government, and the other taxpayers, would be emaciated. This cannot be a reason for declaring the statutory relief “inadequate.”
Plaintiffs further argue that the excess amount of their taxes brings hardship upon them. As a homeowner, I am personally empathetic.3 But as a judge, I cannot accept what is a legally incorrect and dangerous ground for declaring the statutory relief inadequate. The trial court has expressly reserved to each plaintiff the right to litigate the accuracy of the assessment on his property. Reliance on amount or percentage of tax increase as a basis for declaring the relief available under RCW 84.68 “inadequate,” is a *781dangerous precedent. It opens the door to evasion of timely tax payment by those who can afford protracted litigation and would profit by the delay in payment. For these reasons, I dissent. .
Stafford and Wright, JJ., concur with Neill, J.

Coefficient of dispersion is a statistical measure of the assessment inequities among individual parcels of real estate within a given taxing area. An understanding of the term requires acquaintance with three other technical terms used in property tax studies: “stated ratio,” “assessed value” and “indicated ratio.”
“Stated ratio” is ratio of assessed value to true and fair value. In Washington this ratio is constitutionally established at 50 per cent. “Assessed value” is the stated ratio expressed in dollars. “Indicated ratio” is a measure of current accuracy of the stated ratio. It expresses the average relationship, on a given date, of the assessed value on the tax rolls to their current true and fair value.
The degree of uniformity of assessments within a tax area is expressed by the “coefficient of dispersion” within that area. The expression is in terms of percentages by which the various parcels within the tax area differ, on the average, from the indicated ratio. See Taxable Property Values, Census of Governments, U.S. Dep’t of Commerce, Bureau of the Census, 1967, Vol. 2; Property Taxes in the ’70s, Dep’t of Revenue, State of Washington, 1970, p. 137.
The higher the coefficient of dispersion, the greater disparity exists among the taxable parcels in the area. A generally acceptable percentage, denoting a high degree of uniformity, is about 15 per cent. Deviations of more than 20 per cent indicate existence of considerable inequity of tax burden among the individual taxpayers. See Property Revaluation 1970, a Progress Report to the 42d Legislature, Dep’t of Revenue, State of Washington (1970).

RCW 84.41.020: “This chapter [84.41] does not, and is not intended to affect procedures whereby taxes are imposed either for local or state purposes. This chapter concerns solely the administrative procedures by which the true and fair value in money of property is determined. The process of valuation, which is distinct and separate from the process of levying and imposing a tax, does not result either in the imposition of a tax or the determination of the amount of a tax. This chapter is intended to, and applies only to procedures and methods whereby the value of property is ascertained.”

The millages levied in King County have been steadily increasing in recent years due both to actions of the electorate as to special levies and to actions of elected governing officials of taxing districts and agencies as to regular levies. A 1971 publication of the Dep’t of Revenue of the State of Washington, Property Tax Levy & Collection Statistics for 1970, shows this increase for King County:
1967 taxes 77.2 mills
1968 " 85.1 "
1969 " 89.1 "
1970 " 98.8 "
1971 " 100.9 "
(adjusted to pre-1971 measure due to 1970 amendment to RCW 84.52 .050 reducing maximum regular levies from 40 mills to 21 mills following the mandate of a 50 per cent assessment ratio. King County’s 1971 levy is 53.02 mills on this new basis.)