Anti-tax Plaintiffs File Lawsuit Against Sales Tax

Anti-tax Plaintiffs File Lawsuit Against Sales Tax

Referendum on sales tax increase is unconstitutional, suit alleges.

Antitax activists filed a lawsuit in Richmond Circuit Court Monday alleging that legislation authorizing November’s regional sales tax referendum violates Virginia’s state Constitution. If successful, the referendum on a half-cent sales tax increase will not appear on the ballot this year, according to James Parmelee, an organizer with the Northern Virginia Coalition to Stop the Sales Tax and a plaintiff in the suit.

The suit cites six counts which plaintiffs claim render the sales tax unconstitutional. “If the court agrees with us on any of those mistakes, this thing doesn’t go on the ballot,” said Parmelee. “I believe each point we’re bringing up is a good point but we only have to win one.”

The plaintiffs allege that a referendum on taxation invests voters with legislative powers the Constitution reserves for the General Assembly.

Another count argues that it is unclear whether the tax will be considered a state tax or a local tax. If it is a sales tax, the plaintiffs claim, it must be put before the entire state, not just certain regions. If it is a local tax, it must be voted on county by county, not regionally, the suit said.

The plaintiffs also claim that by linking a tax increase to bond sales which have to be repaid over 20 years, the General Assembly is making it impossible for future legislators to repeal the tax.

Parmelee criticized legislators for forcing the referendum through the session without first ascertaining its legality. “The General Assembly tried to do all of its homework with one hour to go and that creates sloppy legislation,” he said. He also blamed Gov. Mark Warner for putting pressure on the legislature to approve the referendum, calling Warner’s action “a rookie mistake from a rookie Governor.”

ENVIRONMENTALISTS AND SMART GROWTH advocates who oppose the sales tax increase cautiously praised the lawsuit.

“I think it’s fair. Hopefully it will get some good questions answered,” said Stewart Schwartz, executive director of the Alliance for Smarter Growth, a group which is campaigning against the sales tax. But he added: “We’ll continue doing what we do on our side.”

Schwartz said that there was some ideological common ground between smarter growth advocates and anti-tax advocates. “Smarter growth has always had a fiscally conservative basis to it,” he said. He also noted that Patrick McSweeney, the attorney representing the plaintiffs in the lawsuit “has been talking about smart growth issues for an awfully long time; before it was called smart growth.”

But he stopped short of saying that the two constituencies were working in concert. “It happens to be that the anti-tax groups and the smart growth groups are working in parallel on this,” he said.

THE NORTHERN VIRGINIA Regional Transportation Authority would not be the first regional authority to issue bonds and use tax revenue to pay for them, said Fairfax County Board of Supervisors chairman Kate Hanley (D-At Large), who will sit on the NVRTA once it convenes in July. Hanley pointed to the Northern Virginia Transportation Commission as an example. “The revenue to [the NVTC] is the gas tax,” she said.

“I hope that the courts will decide this very quickly because there is a precedent,” she said.

The lawsuit named the Board of Elections as defendant, meaning that the governor must find counsel in the case. Attorney General Jerry Kilgore (R) will represent the Virginia Board of Elections in the case.

Parmelee predicted that the court would reach a decision in a matter of weeks.