Washington State Dept. of Revenue v. Hoppe

• Decision Date: 19 July 1973
• Docket Number: No. 42671,42671
• Citation: 82 Wn.2d 549,512 P.2d 1094
• Parties: WASHINGTON STATE DEPARTMENT OF REVENUE, an agency of the State of Washington, and George Kinnear, as Director thereof, Appellants. v. Harley H. HOPPE, King County Assessor, Respondent, Harold Scoones et al., Intervenors-Respondents.
• Court: Washington Supreme Court

Page 549

82 Wn.2d 549

512 P.2d 1094

WASHINGTON STATE DEPARTMENT OF REVENUE, an agency of the State of Washington, and George Kinnear, as Directorthereof, Appellants. v.Harley H. HOPPE, KingCounty Assessor, RespondentHarold Scoones et al., Intervenors-Respondents.

No. 42671.

Supreme Court of Washington, En Banc.

July 19, 1973.

Slade Gorton, Atty. Gen., Timothy Malone and William Dexter, Asst. Atty. Gen., Olympia, for appellants.

Christopher T. Bayley, Schweppe, Doolittle, Krug, Tausend, Prosecuting Atty., Beezer & Beierle, Richard Quirk, Asst. Pros.Atty., Robert R. Beezer, Seattle, for respondents.

BRACHTENBACH, Associate Justice.

While this appeal involves a multitude of issues involving this state's complex scheme of property taxation, a constitutional amendment, an initiative and various statutes, the pivotal question to be answered by this court is the maximum millage rate at which property will be taxed for collection in the calendar year 1973.

This controversy arises from the voters' adoption on November 7, 1972, of SJR 1(now amendment 55 to our constitution) and Initiative MeasureNo. 44(now Laws of 1973, ch. 2, § 1,RCW 84.52.050).SJR 1 imposes a constitutional limit of 1 percent of true and fair value on the maximum allowable rate of regular property tax levies, I.e., 20 mills on 50 percent of the true and fair value of the property being taxed.Initiative 44 sets a limitation of 20 mills on the dollar of assessed valuation, again for regular property tax levies.The texts of both measures are set forth in the appendix.The central issue is whether either, or both, apply to limit the taxes due and collectible in 1973.

The levy certified by the King County Council, collectible in 1973, requires a tax based on 22.0 mills in incorporated areas and 22.16 mills in unincorporated areas (exclusive of excess levies).Because of the state levy of 4 mills on the state equalized values, the actual levies would be 22.6 and 22.76 mills respectively, based on the county assessor's valuation.

The State Department of Revenue and its director brought this action to prohibit the King County Assessor from extending the regular property tax levies upon the tax rolls at millage rates less than those required to raise the amount of taxes levied for state and local purposes, as certified to the assessor by the King County Council.The assessor intended to reduce the state levy for schools and public assistance from 4 mills (4.6 mills on local values) to 1 mill and to increase the local school levy from 6 mills to 7 mills.This would cause the assessment to not exceed 20 mills, at least based on local valuation.The Scooneses, King County property owners, intervened, as did the Renton and Seattle school districts.

The trial court held that (1)SJR 1 does not affect and thereby limit the King County levies made in 1972 and collectible in 1973; (2) the latest statutory millage allocation (Laws of 1971, 1st Ex.Sess., ch. 299, § 24) is invalid along with Initiative 44 because the legislature did not follow the constitutional provisions governing proposed legislation and initiatives on the same subject; (3)Laws of 1971, 1st Ex.Sess., ch. 299, § 25(imposing a state levy of 2 mills for schools) is not in conflict with Initiative 44 and is valid; (4)Laws of 1970, 1st Ex.Sess., ch. 92, § 5 is the applicable millage allocation statute in view of holding (2) above, thereby setting a 21 mill limit on the King County levy; (5) under RCW 84.52.010 the assessor is to reduce the millage in incorporated areas by 1/8 mill for each taxing district, and in unincorporated areas he is to reduce the millage of the junior taxing districts by uniform percentages.

We venture into the thicket of issues in this case with several fundamental precepts in mind:

(1) The spirit or intention of the law prevails over the letter thereof.In re Horse Heaven Irr. Dist., 11 Wash.2d 218, 226, 118 P.2d 972(1941).

(2) In case of doubt, taxing statutes are construed most strongly against the government and in favor of the taxpayer.Foremost Dairies, Inc. v. State Tax Comm'n, 75 Wash.2d 758, 762, 453 P.2d 870(1969);Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211(1917).

(3) Words of a statute, unless otherwise defined, must be given their usual and ordinary meaning.Foremost Dairies, Inc. v. State Tax Comm'n, Supra.This is true regardless of the policy of enacting the law or the seeming confusion that may follow its enforcement.State v. Houck, 32 Wash.2d 681, 685, 203 P.2d 693(1949).

(4) These rules of construction apply equally to direct legislation by the people as to legislative enactments.State ex rel. Jones v. Erickson, 75 Mont. 429, 244 P. 287(1926).

(5) The collective intent of the people becomes the object of the court's search for 'legislative intent' when construing a law adopted by a vote of the people.E. Crawford, The Construction of Statutes, § 365 (1940 ed.) p. 745.

(6) Material in the official voters pamphlet may be considered by the court in determining the purpose and intent of these acts.Bayha v. PUD, 2 Wash.2d 85, 97 P.2d 614(1939).

The controlling language and limitation of SJR 1 is:

(T)he aggregate of all tax levies upon real and personal property by the state and all taxing districts now existing or hereafter created, Shall not in any year exceed one per centum of the true and fair value of such property . . ..

(Italics ours.)

The state contends that this limitation means that only those taxes Levied after the effective date of SJR 1 are so limited.We can find no such meaning in the quoted language.Nowhere does SJR 1 limit itself to levies made at any particular time.But, argues the state, the word levy is a word of art, a word having special meaning; in its narrow, technical sense it refers only to the legislative act of the county in adopting a levy ordinance.The state couples this argument with its assertion that the effective date of SJR 1 was December 7, 1972.Since the original King County levy ordinance was adopted before that date, it would follow that the levy, collectible in 1973, would not be subject to the 1 percent limitation.

Bearing in mind the construction principles cited above, and particularly the rule that words, unless otherwise defined, must be given their usual and ordinary meaning, does the word 'levies' have such a usual and ordinary meaning that it can only mean the legislative function of adopting a levy ordinance?

The state relies principally upon Carkonen v. Williams, 76 Wash.2d 617, 458 P.2d 280(1969).In Carkonen we defined the word levy solely when used in connection with the authority to tax.The court acknowledged that other meanings existed, but adopted a strict construction for the limited purpose of that case.We do not deem Carkonen as determinative of the meaning of the noun 'levies' as used in the context of a constitutional amendment limiting property taxation.

It is well established that the word 'levy' has a variety of meanings.As stated in City of Plankinton v. Kieffer, 70 S.D. 329, 333, 17 N.W.2d 494, 495(1945):

It is also used indiscriminately to denote both the legislative function and the ministerial function of assessing, listing and extending taxes. . . .A mere levy, strictly speaking, does not create a valid tax against specific property.An assessment is also necessary to make complete and effective a 'levy of taxes' As the phrase is used and understood in its ordinary sense.

(Italics ours.)

Other courts have also defined 'levy' broadly 'While the word 'levy' has various meanings, according to the connection in which it is used, when applied to taxation, it means the extension of the tax against the taxable property.A tax cannot be said to be levied until it is so extended.'

Syracuse Trust Co. v. Board of Supervisors, Sup., 13 N.Y.S.2d 390, 394(1939); aff'd, 258 App.Div. 17, 15 N.Y.S.2d 920(1939).

'Levied' as applied to taxes is held to mean 'the extension of taxes against taxable property.'

Paducah Cooperage Co. v. King Mills & Lumber Co., 227 Ky. 573, 577, 13 S.W.2d 778, 780(1929).

Levy is a synonym of assess.

Texas Co. v. Fort, 168 Tenn. 679, 683, 80 S.W.2d 658, 660(1935).

The word levy 'is sometimes used, in the administrative sense, as referring to the mere ministerial or executive acts of ascertaining and entering taxes on the tax book and collecting them.'. . . We construe Sec. 7.180 to use the term 'levy' substantially in that sense.

State v. Metropolitan St. Louis Sewer Dist., 365 Mo. 1, 13, 275 S.W.2d 225, 233(1955).

If the broad, nontechnical definition were adopted, the levy was not complete on December 7, 1972, since the assessor had not spread the levy on the books against specific property.The existence of broader definitions than that contended for by the state indicates that the intent of SJR 1 could well have been premised upon the belief that it would affect all taxes which had not been spread on the rolls.If December 7th were the controlling date, however, we point out the potentially paradoxical result that a county which had adopted its levy ordinance after December 7th would be subject to the limitation of SJR 1, while a county which passed its ordinance before that date would not.

Finding the language of SJR 1 to be unclear, we turn to the official voters pamphlet for aid in interpretation.The ballot title speaks of replacing the present 40 mill limit with a new provision under which the maximum allowable rate would be 1 percent of true and fair value.We find no mention in the text of SJR 1 or the official explanation thereof of the idea that no tax relief would be granted until 1974.There is not the slightest hint that a technical interpretation of the word levies would stand in the way of reduced taxes in 1973.Instead, the official statement for SJR 1 is couched in glowing terms of how much the taxpayer will save in regular property levies.It points out the extreme burden...