Next month marks PubliCola’s one-year anniversary. Throughout December, we’re going to be re-posting our favorite Cola articles from our first 12 months.
Yesterday, we featured a piece by FoodNerd, AKA Lady Bird, from early September, highlighting some of the awesome dining options along the (then-new) light rail route.
Today, we’re reposting a piece LawNerd wrote back in October, arguing that the state has no legal authority to put the city of Seattle on the hook for cost overruns on the downtown tunnel.
The concern that Seattle taxpayers will bear the risk of construction cost over-runs for the proposed deep-bore tunnel project has been at the center of the tunnel debate since the State passed legislation last May and has continued vigorously into the current mayoral race. In the legislation, some Representatives including viaduct-replacement advocate Frank Chopp, at the last minute, added a proviso that “Seattle property owners that will benefit from the tunnel shall bear the burden of any cost over-runs.” Anti-tunnel advocates (including mayoral candidate Mike McGinn) have pointed to that provision as a significant part of the risk Seattle taxpayers face if the tunnel project proceeds. That risk is a myth.
Simply put, several provisions of the Washington State Constitution seem clearly to prohibit the State from imposing a local tax on property owners
Art. VII, Sec. 1 provides: “All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only.” If the State imposed a tax it would have to be uniform on all property owners throughout the state. The State cannot enact a special tax on a small class of taxpayers.
Consistent with that provision, Art. XI, Sec. 12 provides: “The legislature shall have no power to impose taxes upon counties, cities, towns or other municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes. . . .” In short, the State cannot impose a tax on local taxpayers.
Finally, Art. VII, sec. 9 of the Constitution authorizes local tax assessments to make local improvements, but the tax has to be levied by the city not the State: “The legislature may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of property benefited.” Under the State Constitutional structure only a local entity such as the City of Seattle could impose a tax applicable only to local property owners.
Indeed, the State has enacted a statutory scheme for local entities such as the cities to impose such local assessments by ordinance and further provided that the ordinance may be restrained by a petition signed by owners of 60 percent of the taxes to be imposed. The City and the property owners to be taxed have the only say on whether they will be locally tax for the benefits provided by a tunnel. The State does not.
Well, you might ask, who will bear that risk? The State legislation puts a cap on spending for the tunnel project with no provision for expenditures above that cap. The issue of cost overruns on a public construction project is a matter that the agency charged with constructing the project and the private contractor who wins the bid for the project negotiate. So who will be in charge of constructing the tunnel? The tunnel is part of a state highway system, so the State will be the responsible for constructing the tunnel. Thus, the State (not the City, and not select City property owners) will negotiate and sign the contracts for construction of the tunnel and those contracts will allocate the risk of cost over-runs between the State and the contractor. Moreover, it is often the case that costs over-runs are attributable to unanticipated conditions or changes in design that are outside the scope of the contract and become the responsibility of the contracting agency (the State).
Of course, the City can elect in the future to impose a local tax on the property owners benefited by the tunnel to pay for cost overruns. And the City could contract with the State to pay for cost overruns. But the State cannot impose that result without the City’s consent.
