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Court: Spokane can’t exempt veterans, poor seniors from street tax

By Kip Hill, The Spokesman-Review
Published: September 22, 2016, 9:03pm

SPOKANE — The state’s Department of Revenue has won the latest round in a legal dispute over how much some 4,700 city taxpayers must pay to repair Spokane’s pockmarked streets.

A divided Court of Appeals on Thursday tossed a city ordinance that exempted some military veterans and low-income elderly residents from paying additional property taxes tied to a 2014 street levy ballot measure. Seventy-eight percent of voters approved the extension of a tax for streets that was promoted with the promise the amount owed by individual homeowners would not increase.

But the Spokane County Assessor’s office, acting on guidance from the Department of Revenue, determined that a property tax exemption that had been applied to an expiring tax did not apply to the kind of tax increase approved by voters. The result was an increased bill for property owners such as Chuck Moffit, many of whom are on fixed incomes because of retirement or disability due to military service.

In response, the Spokane City Council passed a rule creating its own exemption for the taxpayers whose taxes increased.

But state and county officials said the city didn’t have the power to exempt certain taxpayers from property taxes — even from taxes that go to the city.

The state argued in June that Spokane’s ordinance would “make Swiss cheese of the tax code.”

In a 2-1 vote, a Court of Appeals panel invalidated the Spokane ordinance that sought to renew the exemption over the objections of the county, ruling the city law violated the state Constitution’s mandate that taxation be equal to all ratepayers, though Judge Robert Lawrence-Berrey wrote the ordinance was “laudable” in his opinion for the majority.

The tax money is being used for a variety of planned projects in the next 20 years, including the downtown work on the Lincoln and Monroe streets that has caused some consternation from City Council members and businesses.

In dissent, Chief Judge George Fearing relied on a 109-year-old decision from the Washington Supreme Court that upheld a poll tax assessed against men aged 21 to 50 in Tekoa, a tax that also exempted “paupers, idiotic and insane persons, and all active firemen.” The law also exempted women from the tax, because they weren’t allowed to vote in Washington in 1907.

“The ordinance expresses the will of the people of Spokane, and a court should be reluctant to declare the ordinance unconstitutional,” Fearing wrote.

Property tax assessments for the second half of 2016 are due to the Spokane County Treasurer’s Office by Oct. 31. Payments are accepted online.

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