The purpose of this paper is to examine the defects of the referendum through the case in which the issue of the shopping bag tax comprehended as a green fee has been rejected by the Seattle referendum. It is rather a rare case that the municipal ordinance, such as the shopping bag tax act previously approved by the Seattle City Council in 2008, and enacted in 2009, has been rejected in the referendum. The question is why the Seattle shopping bag tax act has been rejected in the referendum, despite the fact that Seattle citizens are considered liberal and environmentally oriented. There must be some defects in the referendum system itself or a sort of failure in the decision-making process for the shopping bag tax act. As for the failure of decision-making process of the city government, it can be indicated that there must have been a lack of an educational outreach touch to the citizens as well as a lack of mutual consensus between the city government and the business group. It is more important, however, to look into their referendum campaign maneuvers and also the dynamics of other elections for the local officials. I hope that this article will explain the American political climate of urban politics. I also hope the findings of this study will give readers some suggestions for the betterment of our local autonomy system in Japan.