[No. 78637-2. En Banc.]
Argued November 28, 2006. Decided November 21, 2007.
[1] Constitutional Law — Appeal — Review — Constitutional Issues — Avoidance. An appellate court should refrain from deciding a case on constitutional grounds if the case can be decided on nonconstitutional grounds. [2] Judgment — Summary Judgment — Review — Standard of Review. Rulings on summary judgment are reviewed de novo. [3] Appeal — Review — Issues of Law — Standard of Review. Questions of law are reviewed de novo. [4] Statutes — Construction — Legislative Intent — In General. A court's primary duty in interpreting a statute is to discern and implement the legislature's intent. [5] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Effect — Fiscal Year 2006 — Revised Expenditure Limit. Laws of 2006, ch. 56, which was enacted to amend the state expenditure limit provisions of RCW 43.135.025(6), expressly adopts as the expenditure limit for fiscal year 2006 the amount calculated by the expenditure limit committee at its November 2005 meeting, subject to adjustments as provided in chapter 43.135 RCW. The expenditure limit for fiscal year 2006 is therefore $250 million greater than the expenditure limit determined by the committee at its November 2004 meeting. [6] State — Legislature — Authority — Legislative Power — Scope. The legislature's power to enact statutes is unrestrained except where, either expressly or by fair inference, it is prohibited by the state or federal constitution. Insofar as legislative power is not constitutionally limited, it is unrestrained. Each duly elected legislature is fully vested with this plenary legislative power. A legislative assembly, when established, becomes vested with all of the powers and privileges that are necessary and incidental to a free and unobstructed exercise of its appropriate functions. Plenary power in the legislature, for all purposes of civil government, is the rule; a prohibition on the exercise of a particular power is the exception. [7] State — Legislature — Authority — Legislative Power — Limitation by Prior Legislature — Validity. Implicit in the plenary power of each legislature is the principle that one legislature cannot enact a statute that prevents a future legislature from exercising its law-making powers. One legislature cannot abridge the power of a succeeding legislature, and succeeding legislatures may repeal or modify acts of a former legislature. Absent contractual protection or some other form of constitutional restriction, nothing prevents one legislature from amending the work of a previous legislature. [8] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Judicial Review — Role of Judiciary. The state expenditure limit detailed under chapter 43.135 RCW is a creature of statute, as are the laws that govern its calculation, which the legislature is free to amend. It is neither the prerogative nor the function of the Supreme Court to substitute its judgment for the legislature's determination that the 2006 amendment of the state expenditure limit was in the best interests of Washington State. [9] State — Legislature — Authority — Legislative Power — Voice of the People. When the legislature enacts laws, it speaks as the chosen representative of the people. [10] Statutes — Initiatives — Sovereign Powers. An initiative measure is as much a legislative act as a statute enacted by the legislature. When the people exercise their initiative power, they exercise the same power of sovereignty as the legislature does when enacting statutes. [11] State — Legislature — Authority — Legislative Power — Initiative Measure — Effect. The people cannot, by initiative, prevent future legislatures from exercising their law-making power. A law passed by initiative is as subject to the legislative power of future legislatures as is any other statute (except as limited by Const. art. II, § 1(c), which provides that an initiative may be amended or repealed by the legislature within a two year period following its enactment only by a two-thirds vote of the legislature). [12] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Origination as Initiative — Effect. The fact that the state expenditure limit provisions of RCW 43.135.025 originated as an initiative measure does not prevent the legislature from amending those provisions. [13] Statutes — Construction — Retroactivity — Terminology. The terms "retroactive" and "retrospective" are synonymous in judicial usage. [14] State — Legislature — Authority — Legislative Power — Retroactive Statute. The legislature has the power to enact a retrospective (or retroactive) statute so long as it does not contravene some constitutional inhibition. [15] Statutes — Construction — Retroactivity — Amendment — Test. Barring a constitutional limitation, a statutory amendment may operate retroactively if the legislature intends the amendment to be retroactive or the amendment is curative. [16] Statutes — Construction — Retroactivity — Amendment — Curative Amendment — What Constitutes. A statutory amendment is curative if it clarifies or technically corrects an ambiguous statute. [17] Statutes — Construction — Retroactivity — Amendment — Curative Amendment — Enactment Following Controversy About Interpretation. The legislature's intent to clarify a statute is manifested by its enactment of an amendment soon after the onset of a controversy over the interpretation of the original statute. [18] Constitutional Law — Separation of Powers — Legislative Encroachment — Judiciary — Pending Case — Retroactive Statutory Amendment. The separation of powers doctrine is not violated by the retroactive application of a statutory amendment that affects a case pending in court involving a dispute over whether the statute has been violated if the court has not yet construed the statute. Separation of powers problems are raised when the amendment contravenes a construction placed on the statute by a court. [19] Statutes — Construction — Retroactivity — Amendment — Pending Case — Separation of Powers. While the legislature is precluded by the separation of powers doctrine from making judicial determinations, it is not precluded from enacting an amendment to a statute that affects a case pending in court if the court has not yet construed the statute. A statutory amendment that is a facially neutral law for the court to apply to the facts before it does not violate the separation of powers doctrine. [20] Statutes — Construction — Retroactivity — Effect on Pending Case — Separation of Powers. The separation of powers doctrine does not preclude the legislature from enacting a statute that directly affects a case pending in court unless the statute prescribes new rules to be applied to pending litigation that infringe on a judicial function by impeding the court's right and duty to apply new law to the facts of the case, by dictating how the court should decide a factual issue, or by affecting the final judgment. [21] Statutes — Construction — Retroactivity — Vested Rights — Due Process — Test. A vested right entitled to protection from legislation must be more than a mere expectation based upon an anticipated continuance of the existing law. For purposes of the due process clause, a vested right is an entitlement, legal or equitable, to the present or future enjoyment of property, a demand, or a legal exemption from a demand by another. [22] Statutes — Construction — Retroactivity — Vested Rights — Continued Entitlement — Unchanged Benefit. No one has a vested right in any general rule of law or policy of legislation which gives an entitlement to insist that it remain unchanged for one's own benefit. [23] State — Legislature — Appropriation — Expenditure Limit — Taxes Exceeding Limit — Voter Approval — Statutory Right — Vested Right. The "right" granted to voters by RCW 43.135.035 to approve taxes that raise revenues in excess of the state expenditure limit is a mere expectancy; it is not a vested right entitled to due process protections from later enacted legislation. [24] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Effect — Fiscal Year 2006 — Retroactivity — Validity. Laws of 2006, ch. 56, which modified the expenditure limit for fiscal year 2006 set forth in RCW 43.135.025(6), is valid retroactive legislation because the legislature intended that it apply retroactively, it is curative in that it clarifies the meaning of the statute with respect to the fiscal year 2006 expenditure limit, it does not violate the separation of powers doctrine, and it does not interfere with vested rights in violation of due process of law. [25] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Validity — Recitation of Amended Section. Laws of 2006, ch. 56, which modified the expenditure limit for fiscal year 2006 set forth in RCW 43.135.025(6), properly sets forth the statute it amends in satisfaction of the Const. art. II, § 37 requirement that legislation amending an act or section thereof include the full text of the act or section amended. [26] State — Legislature — Appropriation — Expenditure Limit — Statutory Provisions — Amendment — Validity — Legislative or Agency Authority. Laws of 2006, ch. 56, which modified the expenditure limit for fiscal year 2006 set forth in RCW 43.135.025(6), does not contravene the expenditure limit committee's authority to establish a fiscal year expenditure limit. [27] Appeal — Disposition of Cause — Single Dispositive Issue — Consideration of Other Issues. Principles of judicial restraint dictate that if resolution of an issue effectively disposes of a case, the court should resolve the case on that basis without reaching any other issues that might be presented. ALEXANDER, C.J., and SANDERS, CHAMBERS, and J.M. JOHNSON, JJ., concur by separate opinions. Nature of Action: Several organizations and an individual sought a declaration that tax legislation enacted by the legislature in 2005 for the 2006 fiscal year was ineffective because it raised revenues in excess of the 1996 fiscal year expenditure limit without approval by the voters as required by the Taxpayer Protection Act. While the case was pending, the legislature enacted a statute, effective immediately, that had the effect of modifying the 2006 fiscal year expenditure limit to accommodate the tax increase provided for by the 2005 tax legislation. Superior Court: The Superior Court for Snohomish County, No. 05-2-10166-9, James H. Allendoerfer, J., on May 1, 2006, entered a summary judgment partly in favor of the plaintiffs and partly in favor of the defendants. Supreme Court: Holding that the legislature acted within its authority when it modified the 2006 fiscal year expenditure limit to accommodate the 2005 tax increase, the court reverses the partial summary judgment in favor of the plaintiffs and grants judgment in favor of the defendants. Robert M. McKenna-, Attorney General, Maureen A. Hart-, Solicitor General, and Jeffrey T. Even-, Deputy Solicitor General, for appellants. Richard M. Stephens-, Samuel A. Rodabough-, and Brian D. Amsbary- (of Groen Stephens & Klinge, LLP) and Diana M. Kirchheim- (of Pacific Legal Foundation), for respondents. Tracy N. LeRoy- and Michele G. Radosevich- on behalf of American Legislative Exchange Council, amicus curiae. Kristopher I. Tefft- on behalf of Association of Washington Business, amicus curiae. Narda D. Pierce- on behalf of Gary Locke, amicus curiae. Michele G. Radosevich-, Steven Huefner-, and Peter Wattson- on behalf of National Conference of State Legislatures, amicus curiae. Margarita V. Latsinova- and Jason W. Crowell- on behalf of National Governors Association, amicus curiae. Tracy N. LeRoy- on behalf of Washington Coalition for Open Government, amicus curiae. Hugh D. Spitzer- on behalf of Washington Education Association, Washington State Labor Council, and Washington Federation of State Employees AFL-CIO, amici curiae. EN BANC [As amended by order of the Supreme Court November 30, 2007.] ¶1 FAIRHURST, J. — The Washington State Farm Bureau Federation ¶2 It is a fundamental principle of our system of government that the legislature has plenary power to enact laws, except as limited by our state and federal constitutions. Each duly elected legislature is fully vested with this plenary power. Further, we respectfully disagree that this opinion implies that the general police power of the State renders specifically enumerated rights in article I nullities. We make no such holding. ¶3 What is true of statutes enacted by the legislature is likewise true of initiatives, for when the people pass an initiative, they exercise legislative power that is coextensive with that of the legislature. A law passed by initiative is no less a law than one enacted by the legislature. Nor is it more. A previously passed initiative can no more bind a current legislature than a previously enacted statute. ¶4 The statutes that comprise the TPA, including those originating as initiatives, stand on the same footing with all other statutory enactments, equally subject to amendment by current and future legislatures. It is neither the prerogative nor the function of this court to substitute our judgment for that of the legislature or the people with respect to which laws are given effect. If a statute is constitutional, we will not invalidate it. I. FACTUAL AND PROCEDURAL HISTORY A. Background ¶6 In 1993, Washington voters approved Initiative Measure 601. LAWS OF 1994, ch. 2. Initiative 601's stated intent included imposing a limit on the rate of growth in state expenditures and requiring voter approval of any tax increases that exceeded that limit. Former RCW 43.135.010(4)(a), (f) (1994). Initiative 601 was codified primarily at chapter 43.135 RCW, which the initiative named the TPA. RCW 43.135.902. The TPA has been revised, amended, and reenacted many times since its original approval by the voters. ¶7 The TPA limits spending from the state general fund during a fiscal year ¶8 The TPA establishes the state expenditure limit committee (ELC) to calculate state expenditure limits. ¶9 WSFB asserts that the TPA "sought to apply to the government the same age-tested financial advice given to our citizens—create a budget, stick to that budget, and save for a rainy day." Resp'ts' Opening Br. on Cross-Appeal & Resp. to State's Opening Br. at 6-7. However, close examination reveals that the home economics model is a poor fit for the complexities of the state budgeting process. The governor must submit a budget to the legislature no later than December 20 of the calendar year preceding the legislative session during which that budget will be considered. RCW 43.88.060. The legislature must adopt a budget "not later than thirty calendar days prior" to the start of the next fiscal year. RCW 43.88.080. But as the TPA defines the state expenditure limit, the budget target governing these efforts, it cannot be calculated until considerably after the start of the fiscal year to which the limit applies. ¶10 The TPA defines the state expenditure limit for a given fiscal year as "the previous fiscal year's state expenditure limit increased by a percentage rate that equals the fiscal growth factor." ¶11 Additionally, at its November meeting, the ELC adjusts the preceding fiscal year's expenditure limit to reflect the "actual expenditures" made during that fiscal year. Former RCW 43.135.025(6). The adjustment to reflect actual expenditures, referred to as "rebasing" the spending limit, imposes a "spend it or lose it" rule on the legislature. If the legislature does not spend general fund moneys up to the fiscal year's expenditure limit, the limit is reduced by the unspent capacity for purposes of projecting the expenditure limits of future fiscal years. As with the adjustments reflecting transfers into and out of the general fund, the ELC cannot definitively identify actual expenditures made during a fiscal year until after the June 30 close of that fiscal year. ¶12 Notwithstanding the lag in availability of the previous fiscal year's state expenditure limit, the ELC is charged with producing expenditure limits for future fiscal years. Thus, each November the ELC calculates three expenditure limits: (1) a final adjusted expenditure limit for the fiscal year that concluded the previous June 30, plus projected limits, subject to future adjustment, for (2) the current fiscal year which began the previous July 1, and (3) the subsequent fiscal year which will begin the following July 1. Former RCW 43.135.025(6). ¶13 Applying this rubric to the circumstances presented in this case yields the following. The ELC, at its November 2004 meeting, adjusted the fiscal year 2004 expenditure limit to reflect actual expenditures, then used that adjusted limit to project expenditure limits for fiscal year 2005, then in progress, and fiscal year 2006, beginning July 1, 2005. During the 2005 legislative session, the legislature enacted a budget for fiscal year 2006, including the ESHB 2314 taxes challenged by WSFB. At its November 2005 meeting, the ELC adjusted the fiscal year 2005 expenditure limit to reflect actual expenditures, then revised the projected expenditure limit for fiscal year 2006, then in progress, and projected an expenditure limit for fiscal year 2007, beginning July 1, 2006. B. The fiscal years 2005 and 2006 expenditure limits ¶14 In its 2005 regular session, the legislature took action to raise the expenditure limits for fiscal years 2005 and 2006 by $250 million. Section 1701 of ESSB 6090 "transfer[red]" $250 million ¶15 Section 1607 of ESSB 6090 made an "appropriation"—an expenditure—of $250 million from the state general fund to the violence reduction and drug enforcement account (VRDEA), directing that the money was "solely for deposit." LAWS OF 2005, ch. 518, § 1607. As discussed above, former RCW 43.135.025(6) directs that the expenditure limit be adjusted "based on actual expenditures" before projecting the expenditure limits for subsequent fiscal years. Finally, ESSB 6090, section 1701 also "transfer[red]" $250 million from VRDEA to the health services account. LAWS OF 2005, ch. 518, § 1701. ¶16 In November 2005, pursuant to former RCW 43.135.025(6), the ELC finalized the state expenditure limit for fiscal year 2005 and projected limits for fiscal year 2006 (the then-current fiscal year) and fiscal year 2007. As directed by the TPA, the ELC increased the fiscal year 2005 expenditure limit by the $250 million transfer into the general fund. LAWS OF 2005, ch. 518, § 1701; see also former RCW 43.135.035(5) (increase limit for transfer into general fund). Also as directed by the TPA, the ELC rebased the fiscal year 2005 actual expenditures to reflect the $250 million appropriation from the general fund, thereby using the additional expenditure limit capacity created by the transfer into the general fund from the health services account. LAWS OF 2005, ch. 518, § 1607; see also former RCW 43.135.025(6) (rebase for actual expenditures). The ELC then projected the fiscal year 2006 and 2007 expenditure limits from the rebased fiscal year 2005 expenditure limit, appropriately increased by the fiscal growth factor. C. Procedural History ¶17 In July 2005, WSFB brought this action, seeking a declaration that ESHB 2314 raised revenues for expenditure in excess of the fiscal year 2006 expenditure limit and, therefore, was ineffective until approved by the voters under the terms of former RCW 43.135.035(2)(a). ¶18 Before the trial court made any ruling on the merits of this litigation, the legislature enacted ESSB 6896 during its 2006 regular session. LAWS OF 2006, ch. 56. Section 7(6) of ESSB 6896 (hereinafter the 2006 amendment) directly amended former RCW 43.135.025(6), providing in relevant part that "[i]n calculating the expenditure limit for fiscal year 2006, the calculation shall be the expenditure limit established by the state expenditure limit committee in November 2005 adjusted as provided by this chapter and adjusted to include [certain specified appropriations]." The governor signed ESSB 6896 into law on March 15, 2006, two days before the summary judgment hearing. LAWS OF 2006, ch. 56. The 2006 amendment took effect immediately. Id. § 13. ¶19 Following the March 17, 2006 hearing, the trial court decided the case, granting summary judgment partially in favor of each side. As amended on reconsideration, the court granted summary judgment "with regard to the application of the voter approval requirement of RCW 43.135.035(2)(a)" in favor of WSFB on parts I and II of ESHB 2314, and in favor of the State on "all other parts and sections of ESHB 2314." Def.'s Clerk's Papers at 10-11. ¶20 The State sought direct review. WSFB appealed to the Court of Appeals. We consolidated the appeals and granted direct review. The trial court's order was stayed pending resolution of this appeal. ¶21 The State challenges the trial court's determination that parts I and II of ESHB 2314 are invalid absent voter approval under former RCW 43.135.035(2)(a). II. ISSUE ¶22 Does the 2006 amendment, in which the legislature expressly adopted the fiscal year 2006 expenditure limit calculated by the ELC at its November 2005 meeting, establish the state expenditure limit for fiscal year 2006? III. ANALYSIS A. Standard of review ¶23 WSFB claims that taxes enacted in parts I and II of ESHB 2314 increase general fund revenues in excess of the expenditure limit for fiscal year 2006. WSFB claims, therefore, that these taxes are ineffective without prior voter approval under former RCW 43.135.035(2)(a) of the TPA, which provides that taxes raising general fund revenues "in excess of the state expenditure limit . . . shall not take effect until approved by a vote of the people." The State argues that the 2006 amendment raised the fiscal year 2006 expenditure limit by $250 million, thus increasing that limit beyond the additional revenues raised by ESHB 2314 and defeating WSFB's claim. Precise figures for the revenues generated by ESHB 2314 and the fiscal year 2006 expenditure limit are not critical to this case. It is undisputed that if the fiscal year 2006 expenditure limit was increased by $250 million, WSFB's claim that ESHB 2314 raised revenues in excess of that limit fails. B. The 2006 amendment is a valid legislative enactment ¶27 Each duly elected legislature is fully vested with this plenary legislative power. " 'A legislative assembly, when established, becomes vested with all the powers and privileges which are necessary and incidental to a free and unobstructed exercise of its appropriate functions.' " State ex rel. Robinson v. Fluent, 30 Wn.2d 194, 203-04, 191 P.2d 241 (1948) (quoting Ex parte McCarthy, 29 Cal. 395 (1866)). " 'Plenary power in the legislature, for all purposes of civil government, is the rule. A prohibition to exercise a particular power is an exception.' " Fair, 35 Wash. at 132-33 (quoting People ex rel. Wood v. Draper, 15 N.Y. 532, 543 (Ct. App. 1857)). ¶33 The 2006 amendment is also curative in nature. An amendment that " 'clarifies or technically corrects an ambiguous statute' " is curative. McGee Guest Home, 142 Wn.2d at 325 (quoting In re F.D. Processing, Inc., 119 Wn.2d 452, 461, 832 P.2d 1303 (1992)). "The Legislature's intent to clarify a statute is manifested by its adoption of the amendment 'soon after controversies arose as to the interpretation of the original act.' " McGee Guest Home, 142 Wn.2d at 325 (internal quotation marks omitted) (quoting Johnson v. Cont'l W., Inc., 99 Wn.2d 555, 559, 663 P.2d 482 (1983)). The legislature enacted the 2006 amendment within months of WSFB initiating this action, and the 2006 amendment clarifies the meaning of former RCW 43.135.025(6) with respect to the fiscal year 2006 expenditure limit, the subject of that action. ¶34 Applying the 2006 amendment retroactively is not prescribed by separation of powers principles. "[T]he legislature is precluded by the constitutional doctrine of separation of powers from making judicial determinations." City of Tacoma v. O'Brien, 85 Wn.2d 266, 271, 534 P.2d 114 (1975). "[S]eparation of powers problems are raised when a subsequent legislative enactment is viewed as a clarification and applied retroactively, if the subsequent enactment contravenes the construction placed on the original statute by this court." Overton v. Econ. Assistance Auth., 96 Wn.2d 552, 558, 637 P.2d 652 (1981) (citing Johnson v. Morris, 87 Wn.2d 922, 557 P.2d 1299 (1976)). The 2006 amendment does not contradict a construction placed on former RCW 43.135.025 by any court. When the legislature enacted the 2006 amendment, not even the trial court had announced its construction of former RCW 43.135.025. ¶35 Nor is the legislature prohibited from "pass[ing] a law that directly impacts a case pending in Washington courts." Port of Seattle v. Pollution Control Hearings Bd., 151 Wn.2d 568, 625, 90 P.3d 659 (2004). "Litigation often brings to light latent ambiguities or unanswered questions that might not otherwise be apparent." United States v. Morton, 467 U.S. 822, 835 n.21, 104 S. Ct. 2769, 81 L. Ed. 2d 680 (1984). The legislature violates separation of powers principles by prescribing new rules to be applied to pending litigation only when doing so infringes on a judicial function by " 'imped[ing] upon the court's right and duty to apply new law to the facts of this case,' " " 'dictat[ing] how the court should decide a factual issue,' " or " 'affect[ing] a final judgment.' " Pollution Control Hearings Bd., 151 Wn.2d at 626 (quoting Haberman v. Wash. Pub. Power Supply Sys., 109 Wn.2d 107, 143-44, 744 P.2d 1032, 750 P.2d 254 (1987)). A statutory amendment that is "a 'facially neutral law for the court to apply to the facts before it,' [does] not violate the separation of powers." Id. (quoting Haberman, 109 Wn.2d at 144). ¶36 WSFB's contention that the retroactivity of the 2006 amendment violates due process is without merit. The legislature may not give an amendment retroactive effect "where the effect would be to interfere with vested rights." Lawson, 107 Wn.2d at 454-55. But WSFB provides neither argument nor authority to support its novel theory that the citizens of Washington have a vested right to vote on taxes that are expected to raise general fund revenues in excess of the expenditure limit. This court has stated: "[a] vested right, entitled to protection from legislation, must be something more than a mere expectation based upon an anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property, a demand, or a legal exemption from a demand by another." Id. at 455 (alteration in original) (internal quotation marks omitted) (quoting In re Marriage of MacDonald, 104 Wn.2d 745, 750, 709 P.2d 1196 (1985)). "No one has a vested right in any general rule of law or policy of legislation which gives an entitlement to insist that it remain unchanged for one's own benefit." Johnson, 99 Wn.2d at 563. Washington voters' statutory "right" to approve taxes that raise revenues in excess of the state expenditure limit is a mere expectation—it is not a vested right entitled to due process protections from subsequently enacted legislation. (5) A state expenditure limit committee is established for the purpose of determining and adjusting the state expenditure limit as provided in this chapter. The members of the state expenditure limit committee are the director of financial management, the attorney general or the attorney general's designee, and the chairs of the senate committee on ways and means and the house of representatives committee on appropriations. All actions of the state expenditure limit committee taken pursuant to this chapter require an affirmative vote of at least three members. ¶39 Finally, WSFB argues that in order for the voter approval requirement of former RCW 43.135.035(2)(a) to have any meaning, the challenged taxes must be measured against an estimated limit projected by the ELC in November 2004, because only that calculation was available prior to the enactment of the taxes. Giving effect to the 2006 amendment, WSFB further contends, will thwart the TPA's purpose to provide for voter approval of tax increases. This argument takes us full circle to the foundational principles on which this analysis is grounded. The legislature has plenary power to enact, amend, or repeal a statute, except as restrained by the state and federal constitutions. See, e.g., Murphy, 151 Wn.2d at 248. The state expenditure limit and the TPA are creatures of statute, which the legislature is free to amend. When it enacted the 2006 amendment, the legislature, speaking as the elected representative of the people, exercised this prerogative. Because it is not our function to substitute our judgment for that of the legislature in enacting the 2006 amendment, we give the 2006 amendment its intended effect. IV. CONCLUSION ¶41 We find no basis on which to invalidate the 2006 amendment. The 2006 amendment is a valid exercise of the legislature's plenary power to enact laws, a power that encompasses amending former RCW 43.135.025(6) as the legislature sees fit. While the 2006 amendment operates retroactively, it does so within the limitations placed on retroactive statutes and without raising a separation of powers issue. WSFB's other proposed justifications for invalidating the 2006 amendment do not find adequate support in the law. It is neither the prerogative nor the function of this court to substitute our judgment for that of the legislature in enacting laws unless those laws clearly contravene state or federal constitutional provisions. Therefore, we hold that the 2006 amendment establishes the fiscal 2006 expenditure limit. Because the taxes enacted in ESHB 2314 parts I and II do not generate general fund revenues in excess of the fiscal year 2006 expenditure limit thus established, WSFB's challenge fails. We therefore reverse that portion of the trial court's order ruling to the contrary and remand for entry of summary judgment in favor of the State. C. JOHNSON, MADSEN, BRIDGE, and OWENS, JJ., concur. ¶42 ALEXANDER, C.J. (concurring) — I agree with the majority that we should decide a case on statutory grounds, rather than constitutional grounds, when possible. Majority at 4 n.7. In this case, though, I believe we must necessarily decide the constitutional issue. I say that because in order to determine whether the Taxpayer Protection Act (TPA) (chapter 43.135 RCW) or Engrossed Substitute Senate Bill 6896 (the 2006 amendment) are constitutionally valid, it is necessary to determine first whether the people may constrain the plenary powers of the legislature by initiative. This is a constitutional question—one that we have already answered in Amalgamated Transit Union Local 587 v. State, 142 Wn.2d 183, 11 P.3d 762, 27 P.3d 608 (2000), and one that the majority really answers in the course of evaluating the 2006 amendment's validity, majority at 301-02. ¶43 Essentially, I agree with Justice Chambers that the TPA is an unconstitutional intrusion into the legislature's plenary power to pass laws. Accordingly, I, too, conclude that the Washington State Farm Bureau Federation's challenge based on the TPA fails. Thus, I concur in the result the majority reaches. ¶44 SANDERS, J. (concurring) — I am troubled by the majority's claim (echoed in Justice Chambers' concurrence at 9-20) that It is a fundamental principle of our system of government that the legislature has plenary power to enact laws, except as limited by our state and federal constitutions. Each duly elected legislature is fully vested with this plenary power. Majority at 289-90. ¶45 I understand that the majority's view to be the state legislature is virtually unrestrained except insofar as the legislative action countervenes some express prohibition in the state constitution. Although this claim has been repeated by rote in several of our decisions, I am unable to find a single one which explains its rationale, much less critically examines its premise. I challenge the majority to either do so here or dispense with this careless rhetoric. ¶46 The assertion seems to be based on an erroneous presumption that state governments have inherent powers—a presumption that contradicts the basic premise of all American governance that all power resides in the people except insofar as it has been delegated to the government. As such, the claim flies in the face of article I, section 1 of the state constitution, which plainly and expressly provides: All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights. This section hardly evidences our state government has the inherent power to do anything. Rather, it stands for precisely the opposite. ¶47 Our majority also appears to be oblivious to the basic tenet of the American Revolution, which forcefully rejected the European model of unlimited government. Prior to Washington's statehood, our Territorial Supreme Court construed language in the Oregon Organic Act which granted to the territorial legislature "a legislative power extending to 'all rightful subjects of legislation, not inconsistent with the Constitution and laws of the United States' (9 stat. 325, s. 16)." Maynard v. Valentine, 2 Wash. Terr. 3, 14, 3 P. 195, 200 (1880). The court reasoned, "The language of the Organic Act, declaring that the legislative power shall extend to all rightful subjects of legislation, implies that there are some subjects of legislation that are not rightful." Id. Pertinent to the issue at hand, the Territorial Supreme Court eloquently described the foundation principle of American governance: A legislature with undefined powers has all legislative powers. It can lay down the laws in every direction, moulding all persons and things, and each particular person and thing conclusively to what it says, determining absolutely and finally every question by its fiat. Its voice is the voice of the governing power, and the voice of the governing power is the voice of God. From that there is no appeal. Great Britain's Parliament is an example of such a Legislature. . . . American legislatures are different, simply because limited. Higher legislation than any one of them is capable of has at one breath called them into being and circumscribed their activities. The National and State legislatures have their bounds set by what the people have enacted in the National and State constitutions. Id. at 13-14. ¶48 Therefore I think it is fair to say not only is the majority's claim inconsistent with the text of our state constitution but profoundly un-American in theory as well. As Chief Justice Chase opined, "To maintain that our federal, or state legislature possesses such powers, if they had not been expressly restrained; would, in my opinion, be a political heresy, altogether inadmissible in our free republican governments." Calder v. Bull, 3 U.S. (3 Dall.) 386, 388-89, 1 L. Ed. 648 (1798). ¶49 The majority's unexamined claim in reality invites a totalitarian regime and is inconsistent with the founders' understanding of the social compact. I cannot subscribe to the omnipotence of a state legislature, or that it is absolute and without control; although its authority should not be expressly restrained by the constitution, or fundamental law of the state. . . . The purposes for which men enter into society will determine the nature and terms of the social compact; and as they are the foundation of the legislative power, they will decide what are the proper objects of it. . . . There are acts which the federal, or state legislature cannot do, without exceeding their authority. Id. at 387-88. ¶50 But the majority's claim on its face purports that the legislature may do virtually anything except where restrained by a Declaration of Rights. This has never been our system, as we have often observed even the constitutionally undefined police power is not itself without limits. "It is to be observed, therefore, that the police power of the government, as understood in the constitutional law of the United States, is simply the power of government to establish provisions for the enforcement of the common as well as civil-law maxim, sic utere tuo ut alienum non laedas . . . . 'it being of universal application, it must of course be within the range of legislative action to define the mode and manner in which every one may so use his own as not to injure others.' Any law which goes beyond that principle, which undertakes to abolish rights, the exercise of which does not involve an infringement of the rights of others, or to limit the exercise of rights beyond what is necessary to provide for the public welfare and the general security, cannot be included in the police power of the government. It is a governmental usurpation, and violates the principles of abstract justice, as they have been developed under our republican institutions." City of Seattle v. Ford, 144 Wash. 107, 111, 257 P. 243 (1927) (quoting 1 Christopher G. Tiedeman, A Treatise on State and Federal Control of Persons and Property in the United States 4 (1900)). See also Karasek v. Peier, 22 Wash. 419, 426-27, 61 P. 33 (1900) ("[A]ny provision or regulation of the use and enjoyment of land by the owner which is not limited to the prevention of nuisances is opposed to constitutional principles; and the power of the legislature to prohibit nuisances is confined to the prohibition or regulation of such acts as violate, or materially interfere with, the rights of others."). ¶51 I also note with alarm the seditious doctrine sometimes embraced by our majority that even our Declaration of Rights is itself trumped by exercise of the state's police power, a power which a majority of my colleagues seems to believe with their newfound wisdom has no limits whatso- ever. So what is next? Privacy? Press? Speech? Assembly? Can it not be argued that these are also at the mercy of the police power—a power which some argue only ends with the declaration of rights, but now predominates over even that? I am reminded of the prophecy of our first supreme court justice, Theodore Stiles, that the ever-expanding notions of "police power" are "liveries of heaven, stolen to serve the devil in." Richard B. Sanders, Battles for the State Constitution: A Dissenter's View, 37 GONZAGA L. REV. 1, 7 (2001-02). ¶52 The view that the federal Bill of Rights or state Declaration of Rights is subject to the otherwise legitimate government action is plainly inconsistent with the fundamental theory of American governance. The Federalist No. 84, authored by Alexander Hamilton, defended the proposed Constitution of 1787 against the principal attack that it failed to contain a Bill of Rights. Hamilton countered that a Bill of Rights was not only unnecessary in the proposed constitution, but would even be dangerous. They would contain various exceptions to powers which are not granted; and on this very account, would afford a colourable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do? Why, for instance, should it be said, that the liberty of the press shall not be restrained, when no power is given by which restrictions may be imposed? THE FEDERALIST NO. 84, at 579 (Alexander Hamilton) (Jacob E. Cooke ed., 1961) (emphasis added). So, to put it another way, the Bill of Rights, or Declaration of Rights, properly understood, is an enumeration of exceptions to what the government may otherwise legitimately do. Yet our majority rejects this view to virtually nullify the only purpose of a Declaration of Rights by claiming it is subordinate to an otherwise almost unlimited exercise of the police power, which removes any restraint at all to the claimed "inherent" and infinite "plenary power" of the legislature. ¶53 Fundamentally, when a majority of our court claims that our state legislature has "plenary power to enact laws, except as limited by our state and federal constitutions," it departs from the founding principle that governments may legitimately perform only those activities which are delegated by the sovereign people. Moreover, the majority seems most willing to even subordinate express constitutional exceptions enumerated in the Declaration of Rights and elsewhere to the omnipotent power of the "plenary" state. ¶54 I fear for our Republic each step the majority takes toward achieving its counterrevolutionary premise. One cries outrage when the majority purports to recognize "a fundamental principal of our system of government," which is in reality absolutely antithetical to those true principles of our Republic, which are indeed fundamental. ¶55 Aside from that, I concur in the remainder of the majority's opinion. J.M. JOHNSON, J., concurs with SANDERS, J. ¶56 CHAMBERS, J. (concurring) — There is an elephant in the courthouse. The majority knows the elephant is there. The majority maps out a course around the elephant. The majority never acknowledges the presence of the elephant. ¶57 It is an obvious elephant. Several years ago, a certain state supreme court justice was speaking to a classroom of high school students. Initiative 601 (I-601), the act that is ultimately before us today, came up. During the discussion, the judge explained that article II of the state constitution gives each legislature the power to pass laws, including the power to pass tax increases. Later, the judge explained that I-601 gave the people the power to veto all future tax increases passed by all future legislatures. One astute student asked, "then doesn't I-601 conflict with the state constitution?" The judge adeptly avoided the question by noting that, although the issue had been raised, the state supreme court had not yet reached it. ¶58 The elephant that we all keep circling around is the fundamental principle upon which our government is structured. Our constitutions create a representative democracy. It is time we recognized the elephant and confront the constitutional question. To the point, until our state constitution is amended, no legislative body may disarm future legislatures or electorates by removing or limiting the power to legislate or to fund state programs. See CONST. art. II. While the majority correctly concludes that no legislative body, including the people legislating by initiative, can bind future legislative bodies, the majority fails to acknowledge that this conclusion is driven by our constitution. At its core, this case is about that constitutional question. Certainly, we can avoid this question. See majority at 4 n.7. But we have the undoubted power to decide it. I think we should. ¶59 "The brilliance of our constitution is in its checks and balances." Wash. State Labor Council v. Reed, 149 Wn.2d 48, 61, 65 P.3d 1203 (2003) (Chambers, J., concurring). The founders sought to protect many societal interests and to prevent any one political force from dominating any other, and instead to foster the "permanent and aggregate interests of the community" as a whole. THE FEDERALIST NO. 10 (James Madison), available at ¶60 One of the founders was James Madison, a principal architect of our federal constitution. BERNARD SCHWARTZ, MAIN CURRENTS IN AMERICAN LEGAL THOUGHT 84 (1993). He drafted the Virginia Plan, which became the framework around which our constitution took shape. Id. at 85. As Madison explained in his Federalist 10, A republic, by which I mean a government in which the scheme of representation takes place, opens a different prospect, and promises the cure for which we are seeking. Let us examine the points in which it varies from pure democracy, and we shall comprehend both the nature of the cure and the efficacy which it must derive from the Union. The two great points of difference between a democracy and a republic are: first, the delegation of the government, in the latter, to a small number of citizens elected by the rest; secondly, the greater number of citizens, and greater sphere of country, over which the latter may be extended. The effect of the first difference is, on the one hand, to refine and enlarge the public views, by passing them through the medium of a chosen body of citizens, whose wisdom may best discern the true interest of their country, and whose patriotism and love of justice will be least likely to sacrifice it to temporary or partial considerations. The Federalist No. 10 (James Madison), available at ¶61 On a practical level, the founders likely foresaw that the people would want better roads, schools, and other public works, but be reluctant to impose a tax on themselves sufficient to fund each project. By establishing a representative democracy, the founders created a system where the people would elect representatives who would hopefully be "enlightened statesmen." These men and women would be able to set aside "temporary passions" to make the hard decisions and the hard sacrifices for the public good through a deliberative exercise. These representatives would be checked by the people through regular elections. Our founders were wise. Our republic and our constitution have withstood the tests of time. ¶62 More than 100 years after the 1787 debate in Philadelphia, the drafters of the Washington Constitution had their own convention. See generally 2 Wilfred J. Airey, A History of the Constitution and Government of Washington Territory 438-522 (1945) (unpublished PhD thesis, University of Washington) (on file with Washington State Law Library); see also ROBERT F. UTTER & HUGH D. SPITZER, THE WASHINGTON STATE CONSTITUTION: A REFERENCE GUIDE 3 (2002). They too embraced representative government. See CONST. art II. Our state constitution provides for the election of a bicameral legislature composed of a house of representatives and a senate. Id. Our constitution also vests our legislature with the power to legislate and the power to tax. CONST. art. II, § 1; art. VII, § 1. Our founders could have given the people an automatic veto over legislation. They did not. Our founders could have checked legislative power by conditioning all tax increases upon the approval of the people. They did not. The people adopted the constitution in 1889, and in doing so, they surrendered whatever legislative power they may have had by vesting it in the legislature under the original article II, section 1. Indeed, under the original version of article II, section 1, the legislature itself "lacked the authority to condition measures on a vote of the people." Amalgamated Transit Union Local 587 v. State, 142 Wn.2d 183, 241, 11 P.3d 762 (2000) (ATU). ¶63 In 1912, 23 years after adopting the state constitution, the people of Washington claimed the power of initiative and referendum by passing the Seventh Amendment. The amendment gives the people the power to legislate through an initiative and to veto legislation through a referendum, and it gives the legislature the power to refer a particular measure to the voters for voter approval. CONST. art. II, § 1(b); ATU, 142 Wn.2d at 231, 232 n.13. None of the amendments since that time have changed this core aspect of article II, section 1. See WASH. CONST. amends. 7, 30, 36, 72. ¶64Again, before the Seventh Amendment, the legislature lacked the authority to condition legislation on statewide voter approval. Ruano v. Spellman, 81 Wn.2d 820, 823, 505 P.2d 447 (1973). The Seventh Amendment (largely) gave to the people the same power and authority exercised by the legislature (with exceptions not relevant here). See ATU, 142 Wn.2d at 241 (quoting in part Love v. King County, 181 Wash. 462, 469, 44 P.2d 175 (1935)). The power of initiative and referendum does not give the people the power to condition a future state law on future approval of the people, any more than it gave that power to the legislature. ¶65 Finally, and perhaps most importantly for this discussion, "[t]he initiative process cannot be used to amend the constitution." Id. at 232 (citing Gerberding v. Munro, 134 Wn.2d 188, 210 n.11, 949 P.2d 1366 (1998)); see also Culliton v. Chase, 174 Wash. 363, 373-74, 25 P.2d 81 (1933). Just like the legislature, the people must conform to the requirements of the constitution when exercising their legislative authority under the Seventh Amendment. I-601—and its legislative descendents—is unconstitutional because it purports to condition an entire class of legislation on voter approval. That is direct democracy. That is not our system. ¶66 Again, our founders rejected a direct democracy in favor of a representative one. Cf. U.S. CONST. art. IV, § 4 ("The United States shall guarantee to every state in this union a republican form of government."). We have a representative form of government in part because our government is a government of checks and balances. Among other checks and balances are the checks on the people when acting in a legislative or executive capacity. There, the power of the people is checked by the formal requirements of constitutional law making. Right or wrong, good or bad, until our constitution is amended, neither the people through their initiative and referendum powers nor the legislature through its general legislative powers may prevent a future body of duly elected legislators from exercising their constitutional authority to pass laws or raise taxes. ¶67 Not only is this readily obvious and easily understood by astute high school students, we have said all of this before. "Neither the Legislature nor the people acting in their legislative capacity has the power to condition a state law solely on voter approval . . . ." ATU, 142 Wn.2d at 241. ¶68 "[D]isarming their successors" of the power to tax is exactly what I-601 attempted to do. But under our jurisprudence, some positive step has to be taken in regard to each piece of legislation before it may be referred to the people for a referendum. Larson, 156 Wn.2d at 759; ATU, 142 Wn.2d at 241-42 (affirming legislative power to subject a "particular measure" to a referendum but not the people's power to require a referendum on a class of legislation). ¶69 Although we have not directly addressed the constitutionality of I-601 in light of article II, section 1, we have already substantially answered this question. See ATU, 142 Wn.2d at 241-42. There, we held that the right of referendum must be exercised in conformity with the constitutionally mandated procedures, including the four percent voter signature requirement each time the people petition for a referendum on a piece of legislation the Legislature has passed. Nor does [our holding] mean that the Legislature cannot refer a measure to the people for a statewide vote. Plainly it can do so, not, however, as conditional legislation, but rather through the referendum process set forth in article II, section 1(b). Id. at 242 (emphasis added). ¶70 Our liberties are protected by carefully designed separation of powers within a framework of checks and balances. No one branch is more equal than another. All power must be exercised within the framework established by our constitution. I would recognize the elephant is there once and for all. Answering the underlying question is principled, is definitive, and will serve the public good. I would hold that I-601's referendum requirement is an unconstitutional intrusion into the legislature's plenary power to pass laws. See CONST. art. II, § 1; Larson, 156 Wn.2d at 759; ATU, 142 Wn.2d at 242. Our respect for the text and for the checks and balances of our constitutional system of government demands no less. ¶71 J.M. JOHNSON, J. (concurring) — This is an easy case. By a majority vote, the legislature may amend any initiative two years after the people enact it. WASH. CONST. art. II, § 41. In 2006, the legislature amended the Taxpayer Protection Act (chapter 43.135 RCW), which the people enacted in 1994. ¶72 One concurring opinion (Chambers, J.), however, would use this simple case to propose a version of constitutional law that overlooks important provisions of the Washington Constitution and is historically inaccurate. This requires rebuttal. ¶73 Washington's Constitution begins with its most important concept: "All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights." WASH. CONST. art. I, § 1. Far from seeking "to foster the 'permanent and aggregate interests of the community' as a whole," Washington's constitution creates a system to protect individual rights. Concurrence (Chambers, J.) at 314 (quoting THE FEDERALIST NO. 10 (James Madison)). Indeed, in intentional contrast with the United States Constitution, our founders devoted the first article of our constitution to a declaration of individual rights. ¶74 Justice Chambers then suggests that the "core aspect" of legislature dominance survived the 1912 passage of the Seventh Amendment by our people. Concurrence (Chambers, J.) at 5. Ironically, that amendment, allowing direct legislation by the people, was intended as an antidote to just such thinking (as was the concurrent Eighth Amendment providing for recall of public officials). The amendment's words make this point clear: "The legislative authority of the state of Washington shall be vested in the legislature . . . but the people reserve to themselves the power to propose bills, laws, and to enact or reject the same at the polls, independent of the legislature." WASH. CONST. art. II, § 1. Further, through referendum, the people also "reserve power, at their own option, to approve or reject . . . any act, item, section, or part of any bill, act, or law passed by the legislature." Id. So the argument that ours does not envision direct democracy contradicts the constitution, and especially the early Seventh Amendment. Concurrence (Chambers, J.) at 7. ¶75 Given the constitution's republican starting point—that power comes from the people—the representative form of Washington's government cannot be said to exist only as a "check[ ] on the people when acting in a legislative or executive capacity." Concurrence (Chambers, J.) at 7. Rather, our government exists "to protect and maintain individual rights." WASH. CONST. art. I, § 1. Representative government is a tool to those ends, and when not fulfilling the purpose of protecting individual rights, the people can protect those rights on their own with an initiative or a referendum. ¶76 Justice Chambers also gets the historical definition wrong when he claims that the " 'republican' form of government," guaranteed by article IV, section 4 of the United States Constitution, is, by definition, a government by representative assembly. Concurrence (Chambers, J.) at 3. One of The Federalist's authors, James Madison, writing as Publius, did refer to his (Madison's) preferred formof a republic as a government through representatives. THE FEDERALIST NO. 10 (James Madison). ¶77 Indeed, beyond Madison, all of the federal founders understood a republic as simply that government where power derives from the people, instead of from a king or deity. AKHIL REED AMAR, AMERICA'S CONSTITUTION: A BIOGRAPHY 277 (2005). North Carolina's James Iredell, later a justice of the United States Supreme Court, believed the republican government clause in article IV simply meant that "no state should have a right to establish an aristocracy or monarchy." 4 DEBATES IN SEVERAL STATE CONVENTIONS ON ADOPTION OF FEDERAL CONSTITUTION, AS RECOMMENDED BY GENERAL CONVENTION AT PHILADELPHIA, IN 1787, at 195 (Jonathan Elliot ed., Wm. S. Hein & Co. 2d ed. 1996) (1891). James Wilson of Pennsylvania defined a republican government as one where "the people at large . . . either collectively or by representation " form the legislature. 2 DEBATES IN SEVERAL STATE CONVENTIONS ON ADOPTION OF FEDERAL CONSTITUTION, AS RECOMMENDED BY General CONVENTION AT PHILADELPHIA, IN 1787, at 433 (Jonathan Elliot ed., Wm. S. Hein & Co. 2d ed. 1996) (1891) (emphasis added). Alexander Hamilton wrote one "corner stone of republican government" was "the prohibition of titles of nobility." THE FEDERALIST NO. 84, at 577 (Alexander Hamilton) (Jacob E. Cooke ed., 1961). The federal constitutional crafters defined "republic" simply as a government where the people are sovereign; not less, but certainly not more. ¶78 The English historical examples immediately familiar to the founders further prove this point. England was nearly continuously governed by a monarchy with power in and from a king. The exception was the Cromwell Republic after the execution of King Charles I. The period is called the "republic" precisely because there was no monarch until the Restoration in 1661. See Robert G. Natelson, A Republic, Not a Democracy? Initiative, Referendum, and the Constitution's Guarantee Clause, 80 TEX. L. REV. 807, 823 n.76 (2002). Domestic examples further illustrate the historical understanding. For example, there is no doubt Massachusetts had a republican government in 1789, notwithstanding its common practice of government by direct democracy in the form of town meetings. Amar, supra, at 277. ¶79 Correcting this history is important to assure historical error does not contaminate our interpretation of Washington's constitution, ratified nearly a century after its federal counterpart. Our drafters had a chance to consider a representative democracy in many forms. Rather than believing representatives to be inevitably a group of " 'enlightened statesmen' . . . able to set aside 'temporary passions' to make the hard decisions . . . through a deliberative exercise," concurrence (Chambers, J.) at 4, they had seen the likes of John H. Schively, Washington's insurance commissioner, who extorted thousands of dollars by abusing his official position. When the House of Representatives impeached him, the Senate, dominated by special interests, failed to remove him from office. See generally JOURNAL OF SENATE OF STATE OF WASHINGTON SITTING AS A COURT OF IMPEACHMENT FOR TRIAL OF JOHN H. SCHIVELY, Ex. Sess., at 12-31, 848 (Wash. 1909). ¶80 Those campaigning for Washington's Seventh and Eight Amendments undoubtedly would have preferred wise legislators providing them with competent service. "But we seldom get such service, and we many times need the power of Direct Legislation so that we may lock the barn before the horse is stolen." DIRECT LEGISLATION LEAGUE OF WASHINGTON, DIRECT LEGISLATION OR THE INITIATIVE, REFERENDUM, AND RECALL 4 (1912), available at ¶81 Washingtonians adopted the Seventh Amendment because they found their elected officials sometimes corrupt and often shortsighted. The solution was always more control by the people. The contemporaneous Eighth Amendment, allowing voter recall of public officials initiated by petition, served the same purpose. ¶82 "The brilliance of our constitution is [not only] in its checks and balances," Wash. State Labor Council v. Reed, 149 Wn.2d 48, 61, 65 P.3d 1203 (2003) (Chambers, J., concurring), though the initiative and referendum are a part of these checks. More fundamentally, the brilliance of our system is in its devotion to the sovereignty of the people and the rule that those who must bear the law may make the law. With these corrections, I concur. SANDERS, J., concurs with J.M. JOHNSON, J.