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Court Funding Task Force Present: Wayne Blair, chair, Jeff Amram, Cheryl Bleakney, John Cary, Edsonya Charles, David Donnan, Judge Deborah Fleck, Judge Gordon Godfrey, Judge Robert Harris, Professor Ron Hjorth, Judge Stephen Holman, Rena Hollis, Representative Ruth Kagi, Judge Eileen Kato, Senator Adam Kline, Representative Lois McMahan, Mary McQueen, Judge Robert McSeveney, Jan Michels, Retired Judge James Murphy, Judge Kathleen O’Connor, Judge Ann Schindler, Judge John Schultheis, Pam Springer, Ron Ward, Judy Warnick and Judge Tom Warren Guests: Sophia Byrd, Judge Leonard Costello, Tammy Fellin, Judge Corinna Harn, Karen Koehler, Judge Wesley Saint Clair and Gail Stone Staff: Gil Austin, Jude Cryderman, Doug Haake, Jeff Hall, Janet McLane and Lorrie Thompson Call to Order The meeting was called to order by Mr. Blair. Those in attendance introduced themselves. Minutes An amendment was made on page four, fourth paragraph. Ms. Fellin indicated she felt Ms. McQueen’s motion relating to the nexus continuum (page 11) was to approve the approach, not specific items. Discussion followed. Ms. Fellin indicated she would provide the members with a list of mandates that apply to the municipal courts. It was moved by Mary McQueen and seconded by Judge Schultheis to approve the minutes as amended. Motion passed. Superior Court Judges’ Spring Conference Mr. Blair reported he, Kirk Johns, Jan Michels and Ron Ward had made a presentation at the Superior Court Judges’ Association Spring Conference the end of April. Mr. Johns briefly spoke about the questionnaire that was distributed during the conference. He indicated only a few of the questionnaires had been returned. Judge Costello said he would follow-up on the questionnaire by sending a reminder via listserv. Work Group Status Reports Courts of Limited Jurisdiction Work Group Judge Schindler reminded the Task Force that it had adopted the principles and concepts of the CLJWG. She advised that the WG will meet Friday to look at provisions for subject matter jurisdiction expansion. Further she advised that the WG is not looking at jurisdiction between superior court and district court. Judge Schindler said that a draft of the final report will be circulated for comments. Ms. McLane reported that there is some need for clean-up of Title 3. The WG has not yet identified the extent of the clean-up. Judge Schindler announced that Judge Wesley Saint Clair had been appointed by Governor Locke to a position on the King County Superior Court. Judge Saint Clair will assume this position on June 7. Judge Corrina Harn will assume the duties of Presiding Judge for King County District Courts. Problem Definition Work Group Ms. Michels advised the Defense Funding Gap Group (DFG2) was comprised of members from the Court Funding Task Force’s Problem Definition Work Group and members from the WSBA Panel for Defense. This group, using 2001 expenditure figures, estimated the current expenditure for defense at $78 million with another $8-10 million currently being spent on facility costs, expert witness fees, etc. Ms. Michels advised this amount does not include what the state pays for death penalty and extra ordinary costs. Ms. Michels advised the WSBA public defense standards were used, but noted they have not been updated since the late 1980s. Ms. Michels advised that the standards, even though not recently updated, are compatible with national standards. The WSBA Panel on Defense is recommending that the current standards be updated. Ms. Michels reported the “gap” which would allow lawyers more time per case and improve adequate support services would require an additional $80-100 million or so. Ms. Michels briefly reviewed the methodology used for projecting the need. The group will continue to work at developing a more accurate estimate. Other factors worth considering as identified by the DFG2 are: a) Effective defense is also dependent on a good defense services delivery system. b) Effective defense provided early in a case is an overall system efficiency. c) Effective defense can save costs at jail time. d) Some degree of state monitoring of the adoption of standards and adherence to them will require some state administrative expense not currently built into the above calculations. e) The effective use of paralegals and investigators can offset defender time and cost. f) There are other possible criminal justice practices that can reduce defense costs. g) The DFG2 strongly supports amendments to government accounting guidelines that allow computation of the statewide cost of defense. Ms. Michels said she would distribute the final report from the WSBA Panel on Defense when it becomes available. Funding Alternatives Work Group Mr. Johns said the FAWG has a fairly discrete update to April’s written report. He said originally the WG had recommended new filing fees for counterclaims, cross claims, third party claims, class certification, and amended claims. Since the last meeting of the task force, the WG revisited these fees and voted not to go forward with a new fee for amended pleadings and class certification. The fee for responsive claims is the same as the filing fee. One of the issues before the WG was the amount the filing fee should be increased in superior court. The WG discussed at length the appropriate amount of increase, finally agreeing that a $90 increase would be appropriate. Increases to the remainder of the fees and for those in district court would be proportionate in most instances to the $90 increase. With the $90 increase in the filing fee for superior court, projections point to $6-7.3 million revenue increase for counties and $6.4-8.2 million for the state per year. Staff will more closely study the numbers and provide the projections for all fee increases statewide. Briefly discussed was a recommendation that the courts of limited jurisdiction be able to charge a criminal filing fee. After discussion, Mr. Johns indicated that a proposal to do so would be discussed in future FAWG meetings. Mr. Johns reported the tax package had been refined by the work group during its last meeting. Considerations of the group included:
Mr. Johns next reported that in recommending a tax package, considerations need to reflect the Task Force’s prioritization of taxes and be sufficiently flexible to accommodate the give and take of the implementation and legislative process. Tax package recommendations include: First Element A one percent increase to the B&O tax on legal services (increasing from 1.5% to 2.5%). PLUS Second Element Either An across-the-board surcharge on general B&O taxes OR A statewide, “rate-based” property tax of 10 cents per $1,000 of assessed value. PLUS Third Element One or more of the new taxes suggested by the Gates Tax Structure Commission
Mr. Johns advised the estimated revenue generated by property tax is $62 million and on the B&O taxes on legal services is $30 million. He further advised that the work group had discussed taxing TV and cable services, but instead adopted the Gates Commission recommendation that untaxed activities be taxed. Brief discussion followed. Mr. Blair said the procedure for the meeting will be to discuss the PSEA and statutory amendments reports, and then return to the tax package discussion. PSEA Subcommittee Mr. Johns reported the PSEA Subcommittee studied numerous problems associated with the account such as: the number of recipients increase every biennium, the recipients change every biennium, distribution levels change every biennium, complex assessment calculations, and a fund that is difficult to understand and administer. He pointed out that the courts actually benefit very little from PSEA. Recommendations from the work group are:
The Subcommittee did not adopt the following recommendations:
Constitutional/Statutory Amendment Subcommittee Mr. Johns reported the subcommittee addressed Judge Godfrey’s recommendation that we need a constitutional amendment to properly fund courts, the additional judicial positions created, and the that legislative branch fully fund the courts. The issue is: if the courts are not funded as they must be to function as the third branch of government, what are the remedies: 1) invoke inherent power to properly fund courts or 2) litigation to demand that the legislature fund the courts at the constitutionally proscribed level? Mr. Johns pointed out that litigation would be the least desirable option and would be a “last ditch” effort. Brief discussion followed. The Task Force agreed with the recommendation that Judge Godfrey’s subcommittee move from Funding Alternatives to Implementation Strategies. It was moved by Ms. McQueen, seconded by Judge Schultheis and carried to adopt the work group recommendation as follows:
It was moved by Ms. McQueen and seconded to adopt the fee increases as proposed.
Ms. McQueen clarified that her motion is not about how fees get used, but to adopt the recommended increases. Senator Kline agreed it was a good idea to make one motion dealing with the amount of the fee increases and at a later time another motion dealing with the distribution of the moneys. He said it’s important to make sure that the moneys generated are designated for specific areas and not just put into the PSEA. Senator Kline noted that user fees are a favored way by the legislature to provide funding partly because they are an alternative to taxation. He continued that the legislature and public needs to know that the courts are creating efficiencies. He pointed out the trial court coordinating councils as an example. Ms. Warnick said she is not prepared to vote on the fee increases today. She indicated that she cannot go back to the members and tell them she supported an 82% fee increase. She said she would like to see additional funding options. Mr. Ward indicated that he might have to abstain from voting until he had had an opportunity to present the information to the WSBA Board of Governors and ask the Board to take a position. Mr. Cary said, based on earlier discussions, he thought it was clear that votes are not as representatives of particular associations, today. He understood that the vote was the individual’s personal vote and not reflective of any association or organization. Ms. Hollis said she is speaking for the county clerks and they would support the proposed fee increases 100 percent. She continued the increase is long overdue. Although, it might not be enough of an increase, it is a start. Mr. Ward said that he agreed with Ms. Hollis, the fee increases are long overdue. He indicated his obligation to present the information to the 15 other members of the Board of Governors. Call for the question. The motion carried with two votes in opposition (note: Mr. Ward’s vote on the general fee increase was a personal vote and not that of the WSBA Board of Governors). It was moved to adopt a new filing fee for responsive pleadings (cross claim, counter claim and third party claim) with the fee the same as the civil filing fee. Motion was seconded by Judge Schultheis. Motion carried. Judge Warren moved that small claims cases also include cross claims, counter claims, and third party claims. Motion was seconded and carried. Judge Harris moved to exclude unlawful detainers from cross claim, counter claim and third party claims. The motion was seconded by Judge Godfrey. There was a brief explanation of reason to exclude unlawful detainers. Motion carried. Mr. Johns moved that AOC report annually to the legislature any recommended fee increases either inflationary or based upon other considerations. Motion was seconded and passed. Public Education Work Group Judge Warren reminded the members that they had received the “Justice in Jeopardy” communications proposal at the April meeting. He indicated that any suggestions would be incorporated upon Ms. Ferrell’s return to the office. Judge Warren said the ABA’s Commission on State Court Funding will present its final report at the annual meeting in Atlanta in August. He said many states are looking to Washington as a model when it comes to the process used to study court funding issues. Taxes Subcommittee Professor Hjorth said the subcommittee had agreed to a broad based tax because the courts are used by everyone. Three options for the broad based taxes are sales, B&O and property. He advised that the proposed property tax is at the state level to avoid disparities from county to county creating unequal justice throughout the state. Professor Hjorth said the B&O tax on legal services would be increased from the current 1.5 percent to 2.5 percent, a level at which the tax had been temporarily in the past. In addition, a surcharge would be added to general B&O taxes. Professor Hjorth next explained the “dime for justice” concept, advising an estimated $60 million would have been raised. It was explained to the members that due to the complicated formulas depending upon the type of industry, the across the board surcharge on B&O taxes is more practicable. Senator Kline said “there simply is no good tax.” He indicated that property tax is not readily accepted. He indicated the possibility of a new one percent sales tax, by January, based on an initiative by the League of Education Voters, which would put Washington at one of the highest levels in the country. Mr. Ward noted that the reality of politics may dictate that everything may be stripped out of any tax bill except tax on legal services. He continued the simple increases in user fees have shown to be a failure. He asked what happens if this is an exercise in futility? Ms. McQueen said one of the strengths is in the approach. We should start off by adopting principles that say the court system should not sustain itself, but is part of our society and the third branch of government. Mr. Johns pointed out the package makes it clear that this is an element of an overall package and one piece alone will not do it. Professor Hjorth said although he believes the sales tax is not a viable option, the tax on legal services may be the appropriate vehicle. A more persuasive case could be made to the legislature, if the legal profession supports the B&O tax on legal services. Ms. Michels said it might be more palatable to the lawyers if an across the board surcharge on B&O was added to all services. Mr. Cary pointed out that courts serve everyone. The courts are a fundamental part of the whole system. He said lawyers, as members of the legal profession, must take a leadership role. The selling point to lawyers must be that they take a leadership role because if they don’t, who will? Judge Fleck provided a breakdown of the $567 million or so it takes annually to run the courts. Judge Fleck said the proposal is relatively simple, but must call on the courts, the bar and local government to work together. Representative McMahan noted the public is in an anti-tax mood. She emphasized her desire to have a list of programs that have been instituted by the legislature, but are not working. She believes that justice is for everyone and needs to be a priority of government. Representative McMahan said the public perception is that they are legislating, not just applying the law which is the job of the courts. Representative McMahan said because of the anti-tax mood and the unwillingness of the legislature to go against the overwhelming desire of the public, a list of priorities of government would be helpful to the legislature in their attempt to find places that could be cut. She continued that the funding might already exist in the current system. Ms. McQueen responded that the PDWG had identified several legislative policies such as DWLS and SSOSA that are not working, but legislature doesn’t want to hear about them. Senator Kline stated that substantive changes in statute are not within the jurisdiction of this Task Force. He suggested one way to cut expenditures for efficiencies would be by making adjustments to the SRA (Sentencing Reform Act). Incarceration of DUI offenders is a major use of tax payer money at the local level, it might be another area to look at. Senator Kline said some have the attitude that longer sentences deter crime, but, in his view, the length of sentence does not. Senator Kline went on to say that there is really not much fraud, waste and abuse left in state government for the legislature to cut. Representative McMahan disagreed saying she has many examples, but they are not necessarily in the court system. Judge Godfrey said one philosophical ideal that must be adhered to is that we are a third branch of government, not a self-supporting organization. We are here to give the legislature ideas on how to help fund the third branch because courts are not self-funding. Mr. Ward said he agrees with Judge Godfrey with regard to funding the separate branch of government and the Task Force should not go beyond that charge. He thinks we should look at some of the failed policies, indicating that DWLS is a classic example of the problem. Ms. Fellin said several groups from the Cities have talked the past few weeks about courts services and it became very clear that those cities take pride in the services they provide to their citizens. The Cities are concerned that additional state money will bring with it additional mandates. She said the Cities are working together with the County Association to address issues of interest to the associations. She added there is a lot of skepticism. Ms. Hollis said the Washington Association of County Officials (WACO) would echo what Ms. Fellin said. Although WACO is watching court funding efforts, it is not an overwhelming issue for them. Judge Fleck said there are a number of decisions to be made: 1) submit an overall proposal or phasing? 2) if phasing-in, over what period of time? 3) state/local share decision; 4) using all new taxes or portion of user fees? 5) format—constitutional amendment, statutory change or court rule? Judge Fleck also said it is important to hear from local government. She asked about an opportunity to meet with the associations. Brief discussion followed. Ms. Fellin indicated she would help facilitate meetings with the associations. Mr. Cary pointed out that the judiciary does not have the infrastructure to get legislation enacted. He suggested going to the legislature with a modest proposal, hope for success and repeat the process the following year. He continued, filing fee first and second indigent defense. Senator Kline said it is necessary to convince the members of the legislature of the need for funding in particular areas of the judiciary and indigent defense. Also need to show inefficiencies, show those items not at the core of government. When functions are performed by government that are unnecessary, those are inefficiencies. Senator Kline said inefficiencies can also be caused by having too little money. Ms. Byrd said the three top issues for the counties are: low tax base counties, public health and indigent defense. Mr. Blair said the big decisions to be made at the June 15 meeting will relate to tax proposals. The Task Force will also discuss the procedure to finalize the final report. There being no further business, the meeting was adjourned. Respectfully submitted,
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