Kain/Waller v. Myers

• Decision Date: 25 May 2004
• Citation: 337 Or. 36,337 Ore. 36,93 P.3d 62
• Parties: Kris KAIN and Joann Waller, Petitioners on Review, v. Hardy MYERS, Attorney General, State of Oregon, Respondent on Review. Joann Waller and Kris Kain, Petitioners on Review, v. Hardy Myers, Attorney General, State of Oregon, Respondent on Review.
• Court: Oregon Supreme Court

93 P.3d 62

337 Or. 36

337 Ore. 36

Kris KAIN and Joann Waller, Petitioners on Review, v. Hardy MYERS, Attorney General, State of Oregon, Respondent on Review.

Joann Waller and Kris Kain, Petitioners on Review, v. Hardy Myers, Attorney General, State of Oregon, Respondent on Review.

(SC S51105, S51106).

Supreme Court of Oregon, En Banc.

Submitted on the Record February 4, 2004.

Decided May 25, 2004.

Margaret S. Olney, of Smith, Diamond & Olney, Portland, filed the petitions for petitioners.

Steven R. Powers, Assistant Attorney General, Salem, filed the answering memoranda for respondent. With him on the answering memoranda were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.

DURHAM, J.

Petitioners in these consolidated ballot title proceedings challenge the Attorney General's ballot titles for two proposed initiative measures that would amend the Oregon Constitution. For the reasons stated below, we refer the ballot titles to the Attorney General for modification.

The two proposed measures are closely related in substance. Initiative Petition 111 (2004) provides:

"The Constitution of the State of Oregon is amended by adding the following section, which section shall read:

"Section 1. For tax years beginning on or after January 1, 2005, the total amount of ad valorem property taxes levied or imposed on a single family residence and the parcel of land upon which it is located, including taxes levied to pay the principal and interest payments on bonded indebtedness and for serial levies, operating levies, and other such add-on taxes, shall not exceed the equivalent of Two Hundred Dollars ($200.00) per month."

For that proposed initiative, the Attorney General certified the following ballot title:

"AMENDS CONSTITUTION: CAPS PROPERTY TAXES ON SINGLE-FAMILY RESIDENCE AND THE LAND UPON WHICH IT IS LOCATED

"RESULT OF `YES' VOTE: `Yes' vote caps property taxes on single-family residential properties to $200 per month; reduces revenue to schools, other local governments under certain circumstances.

"RESULT OF `NO' VOTE: `No' vote rejects property tax cap; retains existing tax system limiting rates, limiting assessed-value growth, setting permanent tax rates, allowing voter-approved temporary taxes.

"SUMMARY: Amends Constitution. Constitution currently limits ad valorem property tax rates that provide funding to schools, other local governments; limits growth in assessed property value to three percent annually; sets permanent tax rates; allows voter-approved temporary local option taxes above those rates. Beginning 2005, measure caps total ad valorem property taxes on each single-family residence and land upon which it is located to equivalent of two hundred dollars per month. Cap applies regardless of property's assessed value. Measure limits local option taxes, bond pledging authority. Reduces revenue to schools, local governments when taxes on assessed property value of any single-family residential property combined with local option taxes total more than equivalent of two hundred dollars monthly; does not provide replacement funds. Other provisions."

Initiative Petition 112 (2004) provides:

"The Constitution of the State of Oregon is amended by adding the following section, which section shall read:

"Section 1. For tax years beginning on or after January 1, 2005, the total amount of ad valorem property taxes levied or imposed on a single family residence and the parcel of land upon which it is located, including taxes levied to pay the principal and interest payments on bonded indebtedness, and for serial levies, operating levies, and other such add-on taxes, shall not exceed Two Thousand Dollars ($2,000.00) per year. Beginning with the 2005 tax year, the cap enacted by this section shall increase two percent per annum."

For that proposed initiative, the Attorney General certified the following ballot title:

"AMENDS CONSTITUTION: CAPS PROPERTY TAXES ON SINGLE-FAMILY RESIDENCE AND THE LAND UPON WHICH IT IS LOCATED

"RESULT OF `YES' VOTE: `Yes' vote caps taxes on single-family residential properties to $2000 annually; increases limit annually; reduces revenue to schools, local governments under certain circumstances.

"RESULT OF `NO' VOTE: `No' vote rejects property tax cap; retains existing property tax system limiting rates, limiting assessed value growth, setting permanent rates, allowing voter-approved temporary taxes.

"SUMMARY: Amends Constitution. Constitution currently limits ad valorem property tax rates that provide funding to schools, other local governments; limits growth in assessed property value to three percent annually; sets permanent tax rates; allows voter-approved temporary local option taxes above those rates. Beginning 2005, measure limits total ad valorem property taxes on each single-family residence and land upon which it is located to two thousand dollars annually; limit increases two percent annually. Cap applies regardless of property's assessed value. Measure limits local option taxes, bond pledging authority. Reduces revenue to schools, local governments when taxes on assessed property value of any single-family residential properties combined with local option taxes total more than two thousand dollars annually; does not provide replacement funds. Other provisions."

Each proposed measure would impose a single maximum limit on property taxes levied or imposed on a single family residence and the land upon which it is located. Initiative Petition 111 would set that limit at $200 per month. Initiative Petition 112 would set that limit at $2,000 per year and, in addition, would increase that limit two percent per annum.

Due to the similarity of the proposed measures, the Attorney General has certified ballot titles for the proposed measures that also are similar. Petitioners, in turn, have filed nearly identical challenges to each certified ballot title. As the following discussion indicates, we reach the same disposition regarding each challenge.

We begin with petitioners' challenge to the certified ballot title for Initiative Petition 111. Petitioners assert that the caption that the Attorney General certified is insufficient because it fails to "reasonably identif[y]," in 15 words or less, "the subject matter of the state measure." ORS 250.035(2)(a). According to petitioners, the Attorney General's reference in the caption to a "cap" on residential property taxes fails to disclose that the proposed measure would create a fundamental change in the relationship between a property's assessed value and the calculation of ad valorem property taxes payable on the property. Petitioners contend that the true subject of the proposed measure is the transformation of Oregon's system of property taxation from one based in significant part on the property's assessed value to one that, due to the cap, assesses taxes at a flat amount regardless of the property's assessed valuation.

The Attorney General responds that, if the people adopt Initiative Petition 111, property taxpayers will continue to face assessments of the value of their residential property by local taxing authorities, but the proposed measure will cap any assessment of taxes on the property at a specific dollar level. The Attorney General also argues that two recent measures, "Measure 5," Article XI, section 11b, of the Oregon Constitution, and "Measure 50," Article XI, section 11, of the Oregon Constitution, imposed various limitations on property taxes without regard to the property's value. As a result, the Attorney General argues, voters will understand that Initiative Petition 111 similarly would impose a property tax cap that applies to all properties regardless of their assessed valuation. The Attorney General also contends that the point that petitioners raise is an effect of the proposed measure, not its subject matter, and, therefore, it more appropriately receives mention in the summary rather than the caption. Finally, the Attorney General explains that he chose not to mention petitioners' point in the caption because that would focus voter attention on one effect of the proposed measure, thus improperly elevating the importance of one effect over the proposed measure's other effects.

This court reviews the Attorney General's ballot title to determine whether it is in substantial compliance with statutory requirements. ORS 250.085(5). The caption must state or describe the proposed measure's subject matter "accurately, and in terms that will not confuse or mislead potential petition signers and voters." Greene v. Kulongoski, 322 Or. 169, 174-75, 903 P.2d 366 (1995). Greene also states:

"The caption is the cornerstone for the other portions of the ballot title. As the headline for the ballot title, it provides the context for the reader's consideration of the other information in the ballot title."

Id. at 175, 903 P.2d 366 (citation omitted).

Because of its importance to the entire ballot title, the caption must use terms that reasonably identify the proposed measure's subject matter and do not understate or overstate the scope of the legal changes that the proposed measure would enact. For example, in Fred Meyer, Inc. v. Roberts, 308 Or. 169, 777 P.2d 406 (1989), the proposed measure would have created a right to gather signatures for initiatives and referenda at shopping malls. The proposed ballot title caption stated that the proposed measure would protect petitioning activity. This court determined that, in that context, "the verb `protects' could, for some voters, be misleading and does not reasonably identify the subject of the measure." Id. at 174, 777 P.2d 406. The court so held because the word "protects" implied, incorrectly, that the proposed measure simply asked the voters "to confirm the existing state of the law. In fact, the state of the law is in issue and a motivating reason for mounting this initiative effort." Id.

To determine the subject matter of a proposed...