HELENA — The attorney general’s office is asking a judge to dismiss a lawsuit that seeks to disqualify a 2012 referendum that would refund to taxpayers excess state tax revenue, saying the issue shouldn’t be decided until after people vote on the referendum.
Assistant Attorney General Andrew Huff also said that Legislative Referendum 123 is not obviously unconstitutional, so the lawsuit brought by organized labor and another group should fail any way.
“LR-123 is not clearly unconstitutional on its face and should proceed to a vote, consistent with judicial deference to the people’s authority in the referendum context,” he wrote in arguments filed Thursday with state District Court in Helena.
Four labor unions and the Montana Association of Area Agencies on Aging filed suit Oct. 5 in state District Court at Helena, saying LR-123 is unconstitutional and should be stricken from the 2012 ballot.
The Republican majority of the 2011 Montana Legislature placed LR-123 on the ballot, asking voters whether they want to return excess state tax revenue to taxpayers in the form of an income-tax credit. Every Democrat in the Legislature voted against it.
If passed, the referendum would require the state to refund one-half of whatever amount exceeds 125 percent of the state’s budgeted general fund, as set by the Legislature every two years. The excess balance would have to be at least $5 million before refunds are handed out via state income tax refunds.
The lawsuit said only the Legislature can appropriate money, and therefore LR-123 is an unconstitutional appropriation of money by referendum. It also said it grants unconstitutional authority to the legislative fiscal analyst and the departments of Revenue and Administration, who would be involved in calculating the refund.
“If LR-123 appears on the ballot and is passed by voters, untold and indeterminable millions of dollars will be drained from the state treasury, indefinitely and without legislative approval,” the suit said.
Huff said Thursday that because voters haven’t decided LR-123, the suit is asking District Judge Kathy Seeley to issue an “advisory opinion,” which courts don’t do.
“Whether the bill becomes law is a question that is contingent upon a future vote of the electorate,” Huff wrote. “As such, any present challenge based on its validity necessarily rests on the uncertain outcome of the 2012 vote, and is unripe for review.”
He also said LR-123 appears to create a tax credit, rather than an appropriation, and that the duties performed by the legislative fiscal analyst and the state agencies are administrative, rather than determining law.
“Even if the court were to (review) LR-123 at the pre-election stage, (those bringing the suit) have not met their high burden to show that it is clearly unconstitutional on its face,” Huff wrote.