Yakima Proposition 3 would slam door shut to city income tax

By JASON MERCIER  | 
IN THE NEWS
|
Oct 7, 2021

This November voters in the city of Yakima will consider ballot measure Proposition 3, a charter amendment that would prohibit city officials from imposing a local income tax. The effort comes as state lawmakers this year enacted Washington’s first statewide income tax, on capital gains income, a bill whose constitutionality is being challenged in the courts.

Other cities have already acted to prevent a local income tax. A similar charter amendment was adopted by 72% of Spokane voters in 2019. Officials in Battle Ground, Granger, Kennewick, Moses Lake, Spokane Valley and Union Gap have adopted resolutions opposed to a local income tax.

The full text of Proposition 3 says: “The City Council may not impose an income tax on the residents of the City on wages, salaries, investments, or the sale of goods or services. Nothing in this section shall prohibit the imposition of a tax on real property, or the increase of a tax on real property through a levy lid lift procedure or other lawful procedure.”

Passage of Proposition 3 would prohibit any form of local income tax from being imposed in Yakima without a vote of the people.

Testifying in favor of the Yakima income tax ban, Greater Yakima Chamber of Commerce president Verlynn Best said, “It allows us to have a competitive edge in the future of development and business. If we fail placing this in our charter to serve our citizens, it’s safe to say this council will be telling our community it is open to a local income tax in the future.”

Discussing why she proposed the income tax ban charter amendment, Yakima Mayor Patricia Byers said, “Our businesses are trying to rebuild in the community. To even say that we’re open to having an income tax would be a deterrent to other businesses looking to come into the community.”

In fact, not having an income tax has long been advertised by the State Department of Commerce as being a “competitive advantage” for Washington. State voters have also made it consistently clear they don’t want an income tax by rejected 10 straight ballot measures (including six proposed constitutional amendments).

While some say that local income tax bans are a “red herring” and “waste of time,” they are actually a popular effort to stop the anti-competitive income tax kraken from rising out of the sea. I really wish there wasn’t a concerted political effort to impose an income tax on Washington state and its cities. However, that is not the case.

The cities across the state acting to ban a local income tax are directly responding to the ongoing effort by some to use the courts to impose an income tax. In response to Seattle’s efforts to impose an income tax in 2017, the Court of Appeals in 2019 struck down (on a technical single subject violation) the 1984 state law that explicitly prohibited local income taxes. When the state Supreme Court let that ruling stand last year it opened the door for every local government in our state to impose a flat 1% income tax.

Earlier this year the legislature also adopted an unconstitutional capital gains income tax (while refusing to stop cities from imposing a local version) with the stated goal of using the courts to open the door to graduated income taxes across the state. The capital gains income tax is currently being challenged in court. The legislature has also funded budget studies to convince Washingtonians to support an income tax, with a taxpayer-funded commission now traveling the state to do the same.

A “No” vote on Proposition 3 would retain the ability of future local officials, under current court rulings, to impose a flat income tax on Yakima residents and businesses.

A “Yes” vote on Proposition 3 would prohibit officials in the city of Yakima from imposing an income tax without a vote of the people. Adoption of the measure would also signal to citizens and businesses that Yakima’s competitive advantage of not having a local income tax will be safeguarded and can be depended upon.

The choice will soon be yours to make.

 

 

This op-ed is soon to be published in the Yakima Valley Business Journal.