WA Supreme Court rules against first challenge to 'millionaires tax'

The Washington state Supreme Court on Monday ruled that voters cannot bring a referendum against the newly passed “millionaires tax.”

The court upheld the constitutionality of a clause in the text of the law that blocks a challenge by referendum, a particular method for voters to pause and recall the law. Voters would still be able to bring an initiative against the law, a slightly more complex process that was not part of this ruling.

Wealthy hedge fund founder Brian Heywood brought the lawsuit challenging the measure’s inclusion of a “necessity clause,” which deems a law “necessary to the functioning of government” and blocks it from being recalled via referendum.

RELATED: WA Supreme Court to consider Let's Go Washington lawsuit challenging 'millionaires tax'

“It doesn’t go into effect until 2028, no revenue is collected until 2029, there is no possible interpretation that says ‘Oh yeah, this is necessary right now,’” Heywood said.

Proponents of the law have said that it isn’t unusual for a measure that is deemed “necessary for the support of state government” to include a clause barring voters from bringing a referendum against it.

“We’ve been saying all along that this is the plain language of the constitution that the framers did not mean for tax measures to be subject to referendum,” said Sen. Jamie Pedersen (D-Seattle), who sponsored the tax. “They are of course subject to an initiative, we assume that the ‘millionaires tax’ is going to wind up on the ballot and the people will get to decide.”

RELATED: Washington’s historic income tax on high earners is now law

A second lawsuit, challenging the overall constitutionality of the new tax on household incomes over $1 million, has also been filed since the measure became law in March. The state Supreme Court is not expected to rule on the constitutionality question for about a year.

RELATED: New lawsuit challenges constitutionality of Washington’s ‘millionaires tax’

A ballot initiative to recall the millionaires tax would need about double the amount of signatures required to file an initiative – and those signatures would have to be turned in to the Secretary of State’s office by the end of June. A referendum needs 160,000 signatures, while an initiative requires over 300,000.

Though Heywood’s political nonprofit Let’s Go Washington has mounted a number of anti-tax initiatives in the recent past, he’s been mum about whether he’d get involved in an initiative campaign against the millionaires tax. When asked on Monday, Heywood said he is ready to file an initiative to recall the tax, but his group is still deciding if they will file it for this year’s election or next year’s.