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AGO 1977 No. 7 - March 03, 1977
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Slade Gorton | 1969-1980 | Attorney General of Washington

TAXATION ‑- PROPERTY ‑- PENSIIONS ‑- RETIREMENT ‑- POLICE ‑- FIREMEN ‑- LEOFF ‑- PROPERTY TAXES FOR FIREMEN'S PENSION FUND

(1) RCW 41.26.040(3) does not prohibit a city or town from using property tax revenues obtained under RCW 41.16.060 for municipal purposes other than the funding of firemen's pensions in those cases where such other uses are permitted by the terms of the latter statute.

(2) A municipality which first created a full time, paid fire department after March 1, 1970, the date upon which the LEOFF system became operative, is not authorized to levy the additional property tax provided for in RCW 41.16.060.

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                                                                   March 3, 1977

Honorable Christopher T. Bayley
Prosecuting Attorney
King County Court House
Seattle, Washington 98104

                                                                                                                   Cite as:  AGO 1977 No. 7

Dear Sir:

            By letter previously acknowledged you have requested our opinion on the following two questions relating to the additional property tax levy which is provided for in RCW 41.16.060:

            (1) "Does the provision in RCW 41.26.040(3) indicating the revenue generated by the subject levy shall be used to pay benefits under Chapters 41.16 and 41.18 RCW constitute a modification and limitation on the provision in RCW 41.16.060 allowing excess revenue to be used for other municipal purposes?"

            (2) "May municipalities which created full-time, paid fire departments after March 1, 1970, (the effective date of LEOFF) levy the subject tax despite the fact they  [[Orig. Op. Page 2]] never had paid firemen's pension funds pursuant to Chapter 41.16 RCW?"

            We answer both questions in the negative as more fully described below.

                                                                     ANALYSIS

            Your questions involve the interface between the Washington law enforcement officer's and fire fighters' retirement system (LEOFF), as now codified in chapter 41.26 RCW, and certain of the provisions governing the "old" paid firemen's pension systems which were codified in chapters 41.16 and 41.18 RCW.

            The LEOFF system was established by chapter 209, Laws of 1969, Ex. Sess., and came into operative effect on March 1, 1970.  Section 4(1) thereof, as amended prior to that date by § 2, chapter 6, Laws of 1970, Ex. Sess., and since codified as RCW 41.26.040(1), provides as follows:

            "(1) All fire fighters and law enforcement officers employed as such on or after March 1, 1970, on a full time fully compensated basis in this state shall be members of the retirement system established by this chapter with respect to all periods of service as such, to the exclusion of any pension system existing under any prior act . . ."

            The effect of this was to remove all fire fighters who were active on March 1, 1970, as well as those employed after that date, from membership in the prior paid firemen's pension systems established by chapters 41.16 and 41.18 RCW.  However, at the time the LEOFF system came into existence the members of those prior retirement systems had various constitutionally protected rights to the benefits thereof.  Accord,Bakenhus v. Seattle, 48 Wn.2d 695, 296 P.2d 536 (1956);Eisenbacher v. Tacoma, 53 Wn.2d 280, 333 P.2d 642 (1958); andDailey v. Seattle, 54 Wn.2d 733, 344 P.2d 718 (1959).  In recognition of that fact the 1969 legislature also enacted another subsection of § 4,supra, which as later amended and now codified as RCW 41.26.040(2), reads as follows:

            ". . .  Upon retirement for service or for disability, or death, of any such employee, his retirement benefits earned  [[Orig. Op. Page 3]] under this chapter shall be computed and paid.  In addition, his benefits under the prior retirement act to which he was making contributions at the time of this transfer shall be computed as if he had not transferred.  For the purpose of such computations, the employee's creditability of service and eligibility for service or disability retirement and survivor and all other benefits shall continue to be as provided in such prior retirement act, as if transfer of membership had not occurred.  The excess, if any, of the benefits so computed, giving full value to survivor benefits, over the benefits payable under this chapter shall be paid. . . ."

            In this way the legislature sought to avoid any constitutional challenge based upon transfers of membership under RCW 41.26.040(1), supra, from the former pension systems to the new LEOFF retirement system.  Since the transferring fire fighters were guaranteed benefits at least equal to those of their prior system there could, in theory, be no claim by them that their pension benefits had been detrimentally modified by the new law.  In view of the fact that the former systems would thus remain obligated to guarantee certain benefit levels, however, the funds established by those systems naturally had to continue in existence.  The legislature therefore dealt with that question by enacting RCW 41.26.040(3) which provides as follows:

            "All funds held by any firemen's or policemen's relief and pension fund shall remain in that fund for the purpose of paying the obligations of the fund.  The municipality shall continue to levy the dollar rate as provided in RCW 41.16.060, and this dollar rate shall be used for the purpose of paying the benefits provided in chapters 41.16 and 41.18 RCW.  The obligations of chapter 41.20 RCW shall continue to be paid from whatever financial sources the city has been using for this purpose."

            Of course, the potential exposure of these funds and necessity for their use was, at the same time, greatly reduced by fact that the benefits of the LEOFF system would in most cases be greater than those provided by the prior systems; and in any cases involving persons not already retired the prior systems would not have to pay the full benefits ‑ but  [[Orig. Op. Page 4]] only that amount by which their benefits exceeded those of LEOFF.  Later, however, there was one liability added under the LEOFF law which exposed the prior funds to some further financial obligation.  By § 10, chapter 6, Laws of 1970, 1st Ex. Sess., the legislature amended § 15 of chapter 209,supra, to allow payment for certain medical services to be made from the prior municipal pension funds established pursuant to RCW 41.16.050.  That added provision, now codified as RCW 41.26.150(1) reads, in relevant part, as follows:

            "(1) Whenever any active member, or any member hereafter retired, on account of service, sickness or disability, not caused or brought on by dissipation or abuse, of which the disability board shall be judge, is confined in any hospital or in his home, and whether or not so confined, requires medical services, the employer shall pay for such active or retired member the necessary medical services not payable from some other source as provided for in subsection (2).  In the case of active or retired fire fighters the employer may make the payments provided for in this section from the firemen's pension fund established pursuant to RCW 41.16.050 where such fund had been established prior to March 1, 1970:  Provided, That in the event the pension fund is depleted, the employer shall have the obligation to pay all benefits payable under chapters 41.16 and 41.18 RCW: . . ."  (Emphasis supplied.)

            Therefore, in addition to being obligated to pay retired fire fighters those amounts by which the benefits of their prior retirement systems exceed those provided by LEOFF, the "old" pension fund may now also be used to pay the costs of certain medical services which otherwise would be a general obligation of the employer.  See, AGO 1971 No. 16 [[to Robert V. Graham, State Auditor, on May 6, 1971]], copy enclosed.

            Question (1):

            It is against this background that the statutory language of RCW 41.26.040(3),supra, must be viewed in order to answer your first question.  The requirement of that statute is to "continue to levy the dollar rate as provided in RCW 41.16.060."  The latter statute, in turn, provides in material part as follows:

             [[Orig. Op. Page 5]]

            ". . .

            "It shall be the duty of the legislative authority of each municipality, each year as a part of its annual tax levy and in addition to the city levy limit set forth in RCW 84.52.050 [sic]1/ as now or hereafter amended, to levy and place in the fund an additional tax of twenty-two and one‑half cents per thousand dollars of assessed value against all taxable property of such municipality:  Provided, That if a report by a qualified actuary establishes that all or any part of the additional twenty-two and one‑half cents per thousand dollars of assessed value levy is unnecessary to meet the estimated demands on the fund under this chapter for the ensuing budget year, the levy of said additional twenty-two and one‑half cents per thousand dollars of assessed value may be omitted, or the whole or any part of such dollar rate may be levied and used for any other municipal purpose."  (Emphasis supplied.)

            RCW 41.16.060,supra, has been described by our state supreme court as follows:

            ". . .  In the proper exercise of its discretion, the legislature has given the city council the authority to review annually the status of the 'estimated demands and requirements' of the act, and to make the levies needed to meet these requirements."  State ex rel. Longview Firefighters' Union, Local 828, LAFF v. Longview, 65 Wn.2d 568, 572, 399 P.2d 1 (1965).

            But in the absence of a necessity to levy the additional millage (now dollar) rate authorized by the statute to meet the needs of the pension fund, on the other hand, RCW 41.16.060 still authorizes the levying of that tax for  [[Orig. Op. Page 6]] other municipal purposes.

            Of course, the fundamental purpose of all statutory construction or interpretation is to discover and give effect to legislative intent.  Krystad v. Lau, 65 Wn.2d 827, 400 P.2d 72 (1965); Martin v. Aleinikoff, 63 Wn.2d 842, 389 P.2d 422 (1964).  In arriving at that intent, the words of a statute are given their usual, ordinary, and commonly accepted meaning.  State v. Jones, 84 Wn.2d 823, 529 P.2d 1040 (1974); In re Lyons Estate, 83 Wn.2d 105, 515 P.2d 1293 (1973).  In the present instance, the word "as" thus takes on some substantial significance.  This is because RCW 41.26.040(3) obligates a municipality to continue to levy the dollar rate "as provided" in RCW 41.16.060.

            The word "as" generally means ". . . to the same amount or degree; equally; . . . in the same manner that; according to the way that . . . ."  See, Webster's New World Dictionary of the American Language, p. 84 (College Ed. 1968).  Therefore it follows that the phrase "as provided in RCW 41.16.060" in RCW 41.26.040(3) means that the tax is to be levied in the same way and with the same limitations as before; nothing more, nothing less.

            It is most certainly true that the revenues of this tax, once placed in a municipal firemen's pension fund, are not to be used for any purpose other than that of paying the pension benefits provided by chapters 41.16 and 41.18 RCW or for medical services as provided by RCW 41.26.150, supra.  However there is nothing in any of those statutes which suggests that RCW 41.16.060 is in any way modified insofar as it allows the additional tax, under certain specified circumstances, also to be levied and used for other municipal purposes in which case (we assume) the revenues derived therefrom would not be placed in the pension funds in the first instance; instead, they would then immediately be placed in some other municipal fund as is appropriate in view of the other municipal purpose involved.  We therefore answer your first question in the negative.

            Question (2):

            Your second question involves those municipalities which have first organized a full time, paid fire department subsequent to March 1, 1970, the date upon which the LEOFF retirement system became operative.  Therefore, such municipalities would not have any of their fire fighters covered by the provisions of either chapter 41.16 or chapter 41.18 RCW.  Accord, RCW 41.26.040(1),supra, which repeated for ease of reference provides as follows:

             [[Orig. Op. Page 7]]

            "(1) All fire fighters and law enforcement officers employed as such on or after March 1, 1970, on a full time fully compensated basis in this state shall be members of the retirement system established by this chapter with respect to all periods of service as such, to the exclusion of any pension system existing under any prior act. . ."  (Emphasis supplied.)2/

             It is true that, as we have noted above, RCW 41.26.150(1),supra, does allow employers to make payments for medical services from the firemen's pension fund established pursuant to RCW 41.16.050 ‑ but only ". . . where such fund had been established prior to March 1, 1970."  That statute thus makes it clear that if such a fund were thereafter formed it could not be used for the payment of the costs of the medical services provided by RCW 41.26.150.  Thus it follows that if such a fund were to be formed after March 1, 1970, it would have absolutely no pensions or related obligations to meet.  There would be no members of a pension system entitled to benefits of any kind.

            While it is true that the authorization to levy additional taxes which has been granted by RCW 41.16.060 allows any moneys not necessary to meet the estimated demands on the pension fund for the ensuing budget year to be used for any other municipal purpose, that provision nevertheless still contemplates the valid existence of such a fund.  Any other reading of the statute would be patently senseless and thus contrary to the rule that no interpretation should be given a statute which leads to a gross injustice or absurdity.  Lenci v. City of Seattle, 63 Wn.2d 664, 388 P.2d 926 (1964); Krystad v. Lau, supra;Yakima First Baptist Homes, Inc. v. Gray, 82 Wn.2d 295, 510 P.2d 243 (1973);Williams v. Pierce County, 13 Wn.App. 755, 537 P.2d 856 (1975).  Likewise, a thing within the letter of a law but not within its spirit may be held inoperative where it would otherwise lead to an absurd conclusion.  Murphy v. Campbell, Inv. Company, 79 Wn.2d 417, 486 P.2d 1080 (1971); Gaines v. Department of Labor and Industries, 1 Wn.App. 547, 463 P.2d 269 (1969).

            Therefore your second question is answered in the negative as well.  A municipality which first created a full-time, paid fire department after March 1, 1970 (the effective date of LEOFF), may not levy the subject additional tax in view of  [[Orig. Op. Page 8]] the fact it never had a paid firemen's pension fund pursuant to chapter 41.16 RCW.

            We trust we have been of assistance.

Very truly yours,

SLADE GORTON
Attorney General


PHILIP H. AUSTIN
Deputy Attorney General


WAYNE L. WILLIAMS
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

1/This reference should, instead, now read "RCW 84.52.043" in view of § 144, chapter 195, Laws of 1973, 1st Ex. Sess., together with § 134 and the last proviso of § 154 thereof.

2/See, also RCW 41.26.045.

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