A D.C. Superior Court judge yesterday snuffed out a ballot initiative to ban smoking in restaurants and bars, ruling that the proposed measure improperly encroached on the city's budget process.

In a 13-page decision delivered late yesterday, Judge Mary A. Gooden Terrell called Initiative 66 "invalid" and "improper" and ordered the D.C. Board of Elections and Ethics to reject it.

The ruling was a victory for restaurant owners, who resisted efforts to impose an outright ban on smoking and sued the election board in March to keep the initiative off the November ballot. They argued that the initiative illegally infringed upon powers of local government officials to make decisions that affect city revenue.

"Our organization is not pro-smoking," said Andrew J. Kline, general counsel for the Restaurant Association of Metropolitan Washington, a trade group that represents about 500 Washington area establishments. "We just think it's up to the customer and the business operators to have the freedom to choose."

Even before yesterday's ruling, the initiative's prospects were dimming. To get a place on the November ballot, anti-smoking activists needed to secure 18,000 signatures of registered voters by July 5. By filing the suit, the restaurant association was able to keep Initiative 66 boosters from beginning to collect signatures for the initiative, also known as "the D.C. Smokefree Workplace Initiative of 2004."

The anti-smoking forces had been campaigning since September to ban the smoking of cigarettes, cigars and pipes in all D.C. workplaces, including bars and restaurants. They began the push in the city soon after the Montgomery County Council banned smoking in restaurants and bars.

John Hardin Young, an attorney for two organizations that filed court papers in support of the initiative, said that he disagreed with the judge's decision and that the ruling will be appealed Monday. He represented the American Cancer Society and the National Center for Tobacco-Free Kids.

"Initiative 66 involved important public health issues that are the proper subject of an initiative," he said last night. "The decision goes to the very balance between the rights of the electorate and the rights of the city council, and impacts the balance of political power that is embodied in the initiative and referendum act."

But in their bid to derail the suit, the restaurant owners had argued that a ban on smoking would have an impact on sales tax and cigarette tax revenue collected in the District and was, therefore, an inappropriate matter for an initiative under the city's law.

"The case law says that even if it's minimal, if it affects the budget process, it is not the appropriate subject of an initiative," Kline said.

The ruling makes it clear that elected officials take the lead in setting financial management and fiscal policy in the city, Kline said.