Revisiting Granite Falls: Why the Seattle Monorail Project Requires Re-examination of Washington's Prohibition

• Publication year: 2005

SEATTLE UNIVERSITY LAW REVIEWVolume 29, No. 1FALL 2005

Revisiting Granite Falls: Why the Seattle Monorail Project Requires Re-examination of Washington's Prohibition on Taxation without Representation

Matthew Senechalf(fn*)

I. Introduction

It has been said that the power of the state to tax is virtually limitless, and that the power to tax involves the power to destroy;(fn1) indeed, taxation is one of the chief tools by which tyranny can be imposed upon a nation.(fn2) It is for this reason that Anglo-American law has long-characterized the taxing power as legislative in character,(fn3) that is, it is only legitimately exercisable by the people themselves or by their duly elected representatives.(fn4) The rationale for lodging this awesome and potentially destructive power in the legislature is manifest: it accords with the nature of taxes themselves(fn5) and ensures that those imposing the tax are held accountable to the electorate who bears their burden.(fn6) In short, legislative control of the taxing power avoids "taxation without representation." Washington law and its political structures reflect this fundamental principle of American democracy.(fn7)

A consistent and equally fundamental doctrine prohibits the legislature from delegating its legislative power, particularly in the case of taxation, to other entities.(fn8) Article II, section 1 of the Washington Constitution explicitly vests all legislative power in the state legislature and generally bars it from delegating that power.(fn9) Additionally, although municipal corporations possess no inherent power to tax,(fn10) article VII, section 9 and article XI, section 12 provide an exception: together, these sections permit the legislature to delegate the taxing power to the "corporate authorities" of local municipal corporations for local purposes.(fn11) The Seattle Monorail Project (SMP), however, raises serious questions about the extent to which the state constitution permits a municipal corporation governed by an unelected(fn12) board to levy local taxes.

Following Seattle voter approval of an initiative to create a citywide monorail transportation system, (fn13) the Washington State Legislature passed Engrossed Substitute Senate Bill 6464 (the "Enabling Act" or "Enabling Legislation"), which permits cities with over 300,000 residents to create a city transportation authority (CTA) to plan, develop, and operate a citywide monorail transportation system. (fn14) It also authorizes CTAs to issue bonds and levy various taxes to fund such systems.(fn15) However, because the Enabling Act permits CTAs to be governed by unelected governing bodies(fn16) it created the potential for an un-elected and unaccountable board to levy taxes.

This potential became reality in November 2002 when Seattle voters approved Seattle Citizen Petition No. 1 ("Petition 1" or the "Petition").(fn17) Petition 1 created a CTA called the Seattle Monorail Project (SMP) and authorized it to issue up to $1.5 billion in bonds and to levy a motor vehicle excise tax (MVET) of up to 1.4% to fund the repayment of those bonds.(fn18) The SMP is governed by a board consisting of seven appointed members and two members elected at large by Seattle voters.(fn19) Its un-elected composition notwithstanding, by its own actions the SMP has levied the MVET at varying levels within the voter-approved 1.4% ceiling.(fn20)

The composition and actions of the un-elected SMP Board raise the question of whether the Washington State Constitution permits the legislature to delegate its taxing power to municipal corporations governed by unelected boards. Stated differently, the SMP Board and its actions present the question of whether the Washington State Constitution requires that local taxes be imposed only by officials who are elected by, and accountable to, the electorate burdened by the tax.(fn21) While Washington's Constitution, political structures, and legal doctrine are designed to prevent "taxation without representation," the recent case of Granite Falls Library Facility Area v. Taxpayers of Granite Falls has blurred the contours of these safeguards.

This Article analyzes whether the legislature has unconstitutionally permitted "taxation without representation" by delegating its legislative taxing power to the SMP. It argues that the Washington State Constitution permits the delegation of the taxing power to municipal corporations only when the legislative organs of those entities are directly elected by or otherwise accountable to the tax burdened electorate. Further, it argues that, because the SMP fulfills neither of these requirements, it is constitutionally unable to levy the MVET. Part II analyzes the Anglo-American legal system's historical prohibition on taxation without representation and analyzes Washington cases that address this prohibition. Further, it argues that Washington's prohibition on taxation without representation does not permit delegation of taxing authority to officials who are unaccountable to the electorate burdened by the tax. Part III applies this rule to the facts surrounding the composition and activities of the SMP, arguing that because it is governed by an unelected board, it is constitutionally unfit to levy the MVET. It argues further that neither voter approval of neither the MVET nor the governing structure of the SMP can cure this fundamental deficiency. Part IV concludes by recommending that the Washington Supreme Court clarify the precise boundaries of the state's prohibition on taxation without representation in order to preserve its continued application and ensure the continuation of the protections it affords.

II. Washington Permits Delegation of the Taxing Power to Municipal Corporations Only When They Are Composed of Elected Officials Over Whom the Tax-Burdened Electorate Retains Control.

In determining whether the SMP has unconstitutionally levied the MVET, it is important to first define taxes, identify entities that may impose them, and determine under what circumstances the taxing power may be delegated. Subsection A explores the historical origins of America's prohibition on taxation without representation and explains that Anglo-American law has long characterized the taxing power as one that is "legislative" in character. It describes taxes as typically being conceived of as a "grant" of the people to their government,(fn22) explaining that taxes may therefore be imposed only by the people themselves or by their duly elected representatives. (fn23) Subsection B examines Washington's legal doctrine and political structures and demonstrates how they reflect this important concept. Lastly, subsection C explains that Washington permits its legislature to delegate the taxing power to municipal corporations.(fn24) It argues, however, that to avoid "taxation without representation," the Washington State Constitution only permits delegation of the taxing power to municipal officials who are elected by, and accountable to, the tax-burdened electorate.

A. The Historical Origins and Justifications of the Legislative Taxing Power.

Anglo-American law has long characterized the power of taxation as one that is necessarily legislative in character.(fn25) This is evident from the fact that taxation itself "is the making of rules and regulations under which the necessary revenues for all the needs of government are to be apportioned from among the people and collected from them."(fn26) Because taxes themselves are a "grant" of the people to their government, they must be made by the "immediate representatives of the people."(fn27) Stated another way, the people possess "the sole right to determine, through their chosen representatives, what grants of supplies shall be made for the support of the state and how the burden of taxation which they entail shall be distributed."(fn28) In our political and legal system, it is therefore axiomatic that the power of taxation belongs to the legislature.

The justification for lodging the taxing power in the legislature rests, in large part, upon the fact that doing so helps to prevent tyranny and oppression.(fn29) Although the notion that there can be no lawful taxation levied by the sovereign unless granted by the representatives of the people originated in England, it was in America that it took on particular significance.(fn30) In response to Great Britain's odious taxing of the colonies, including imposition of the Stamp Act of 1765, colonists articulated the concept that "taxation without representation is tyranny."(fn31) The colonists' assertion that there could be no taxation without representation meant that local laws, particularly those relating to taxation, could not be made but by local legislatures.(fn32) This notion was a rejection of Great Britain's assertion that members of Parliament adequately represented the entire nation, including the colonists,(fn33) rather than the limited property owning constituency that had elected them. The colonists' rejection of this assertion ultimately gave rise to the American Revolution's rallying cry of "no taxation without representation."(fn34)

Since then, the notion that there can be no taxation without representation has become enshrined in our nation's political structures and legal doctrine. As Chief Justice Marshall stated in M'Culloch v. Maryland,[i]t is admitted, that the power of taxing the people and...