Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1956 No. 221 -
Attorney General Don Eastvold


Contributions by political subdivision employers are excise taxes and do not violate the constitutional provisions regarding increase or diminution of salary during terms of office, or payment of extra compensation for services already rendered.

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                                                                  March 12, 1956 

Honorable John J. O'Connell
Prosecuting Attorney
Pierce County Courthouse
Tacoma, Washington                                                                          Cite as:  AGO 55-57 No. 221

 Attention:  !ttThomas R. Garlington
            Chief Civil Deputy

Dear Sir:

           You have requested our opinion with respect to chapter 4, Laws of 1955, Ex. Sess.  Your letter, which was previously acknowledged, asks the following questions:

             1. May employer contributions be made with respect to a period of time for which employees have been fully compensated for their services without violating any of the following constitutional provisions: Article VIII, § 7; Article II, § 25; Article XI, § 8; Amendment 20?

             2. If payment of contributions by an employer political subdivision, retroactive to January 1, 1955, violates any of the above constitutional provisions, can a distinction be drawn with reference to a plan retroactive to January 1, 1956?

              [[Orig. Op. Page 2]]

            It is our conclusion that the contributions required of employers constitute a tax and are, therefore, not in violation of the constitutional provisions.  Your first question is answered in the affirmative.  In view of our answer to that question, the second question is moot.


             Chapter 4, Laws of 1955, Ex. Sess., provides in § 3 (1) (c) as follows:

             "Such agreement shall be effective with respect to services in employment covered by the agreement performed after a date specified therein but in no event may it be effective with respect to any such services performed prior to the first day of the calendar year in which such agreement is entered into or in which the modification of the agreement making it applicable to such services, is entered into except that if a modification is entered into after December 31, 1954, and prior to January 1, 1958, which applies to individuals covered by an existing retirement system, such modification may be effective with respect to services performed after December 31, 1954, or after a later date specified in such modification."

             The provisions of the Washington State Constitution pertaining to your inquiry provide as follows:

             Article VIII, § 7:

             "No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, * * * except for the necessary support of the poor and infirm, * * *"

             Article II, § 25:

             "The legislature shall never grant any extra compensation to any public officer, agent, servant, or contractor, after the services shall have been rendered, * * * nor shall the compensation of any public officer be increased or diminished during his term of office."

              [[Orig. Op. Page 3]]

            Article XI, § 8:

             "The legislature shall fix the compensation by salaries of all county officers, * * * The salary of any county, city, town, or municipal officers shall not be increased or diminished after his election, or during his term of office; * * *"

             The provisions of the Twentieth Amendment and Article XI, § 16 (Amendment 23), provide the same essential restrictions.

             The foregoing constitutional provisions, except for Article VIII, § 7, refer to the term "compensation."  Thus, if the contributions by the employer are not compensation, the statute does not violate the prohibition of Article II, § 25, as there has not been a grant of extra compensation for services already performed.  Likewise, under such circumstances there would not be an increase or diminution of salary during the term of office.  This question as to the nature of the employer's contribution has been directly decided by the appellate courts of West Virginia and Alabama.

             In State ex rel. Patteson v. Sims, 65 S.E. (2d) 730, the governor of West Virginia and others sought a writ of mandamus to require the state auditor to make certain deductions from their salaries and to issue proper warrants on the state treasurer in additional amounts for the purpose of paying certain deductions and additional equal amounts as contributions to the Federal Social Security Board.  The legislature of West Virginia had passed legislation providing for election to obtain OASI coverage for employees.  The auditor refused to make the required deductions because of the provisions of Article VI, § 38, of the West Virginia Constitution, which provides in part as follows:

             "Nor shall the salary of any public officer be increased or diminished during his term of office."

             This case also considered the question of whether deductions from the officers' salaries for the purpose of OASI contributions diminish such salaries in violation of the constitution.  The court unequivocally held that the payment by the employee constitutes an income tax and that the employer contribution constitutes an excise tax.  The court said:

              [[Orig. Op. Page 4]]

            "It is clear from the foregoing authorities that the deductions from the salaries of the petitioners and the payments to match them out of state funds exacted and required to be paid into the social security fund, by Chapter 123, Acts of the Legislature, 1949, Regular Session, and by the above cited federal statutes, are valid income and excise taxes.  It is equally clear, from the O'Malley case [O'Malley v. Woodrough, 307 U.S. 277], that they are not a part of, but exist separately and apart from, the salary of each of the petitioners as a public officer of this State; and that the collection and the payment of these taxes do not increase or diminish such salary within the meaning of Article VI, Section 38, of the Constitution of this State."  (Bracket insertion ours.)

             The immunity of the state from Federal taxation was also discussed in this case.  The court held that by the contract with the Federal government, the state consented to the taxation and that the immunity to that taxation was thereby removed.

             In O'Malley v. Woodrough, 307 U.S. 277, 59 S.Ct. 776, 838, 83 L.Ed. 1289, it was held that an income tax deduction from a Federal judge's salary did not violate the constitutional prohibition against the diminution of the salary of such judge during his term of office.

             The supreme court of Alabama inOpinion of the Justices, 69 So. (2d) 702 (1954), in answering a request for an opinion by the governor, quoted the syllabus from the case ofState ex rel. Patteson v. Sims, supra, and used that syllabus as the basis for their answer to essentially the same question as presented in thePatteson case.

             With respect to Article VIII, § 7, the payment of contributions does not constitute a gift of money or property.  Neither does it constitute a loan of money or credit.  As hereinbefore stated, the payment of contributions is payment of an excise tax.  The submission of a plan by the legislative body of the coverage group does not come within the prohibition.

              [[Orig. Op. Page 5]]

            In view of the foregoing, we see no prohibition against an effective date of January 1, 1955.  It is our conclusion that chapter 4, Laws of 1955, Ex. Sess., is not in violation of the Washington State Constitution.

             We trust the foregoing will be of assistance to you.

 Very truly yours,
Attorney General

Assistant Attorney General