Request By:
Mr. Samuel E. Phillips
Taylor County Judge/Executive
Courthouse
Campbellsville, Kentucky 42718
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Chrles W. Runyan/, Assistant Deputy Attorney General
Because of the impending cut in revenue sharing funds and the statutory limitations placed upon fiscal courts' ability to establish tax rates which would generate adequate revenues for county purposes, the fiscal court of your county has requested you to seek our opinion concerning the steps it might take to balance the budget.
Pursuant to § 157 of the Kentucky Constitution, no county shall be authorized or permitted to become indebted, in any manner or for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year, without the assent of two-thirds (2/3) of the voters thereof, voting at an election held for that purpose. The obvious purpose of § 157 was to inaugurate and perpetuate the "pay-as-you-go" plan of local government.
Payne v. City of Covington, 276 Ky. 380, 123 S.W.2d 1045 (1938).
Question No. 1:
"Is there any question that fiscal court could place upon the ballot that would produce new or additional revenue?"
First, under § 171 181 of the Kentucky Constitution, a fiscal court of any county can levy only two kinds of taxes: (1) ad valorem taxes and (2) license or occupational taxes.
Driver v. Sawyer, Ky., 392 S.W.2d 52 (1965) 53, KRS 68.090(1), KRS 137.115 and KRS 67.083(2).
No county question can be placed upon the ballot for the voters of the county except as specifically provided by the constitution and statutes. Thus the submitting to the voters of a proposed contract indebtedness of the county which would exceed in the particular year the available county income and revenue provided for such year is explicitly authorized by § 157 of the Constitution. The matter of the counties' levying the two kinds of taxes permitted by the constitution is addressed to the acts of the General Assembly. In addition, the matter of submitting the levying of the two kinds of taxes to the voters is likewise a matter of statutory enactment. See §§ 171 and 181, Constitution. The Jefferson Fiscal Court can impose a license or occupational tax without a vote of the people. Such a vote is not authorized. KRS 68.180. Under KRS 68.197, the fiscal court of any county having a population of thirty thousand (30,000) or more may by order or resolution impose a license tax on businesses or occupations. However, such fiscal court imposing such tax must submit the question of the tax to the voters of the county at the next general election. If the license tax is rejected by a majority of the voters in the election, the tax shall be repealed effective December 31 of the same year. In counties containing less than thirty thousand population, the license tax can be levied without a vote of the people, and such a vote is not authorized. Since the population of Taylor County is approximately 21,178, a vote of the people on levying a license or occupational tax is not authorized.
The levying of ad valorem tax rates of counties is subject to recall (vote of the people) pursuant to KRS 68.245(6) and 132.017.
The answer to the first question is that a referendum or recall (vote of the county voters) is only legal where expressly provided for by the Kentucky Constitution and statutes. Revenue for the county may be provided by two taxes: ad valorem and license taxes. If "new or additional revenue", as you inquire, means revenue other than that derived from the ordinary ad valorem tax rate, then if your county has not imposed a general license or occupational tax, it may do so. However, the fiscal court must act without a vote of the people (since the vote of the people for that tax in Taylor County is not authorized).
Question No. 2:
"Does the statutes provide enabling legislation so as to permit fiscal courts to enact an ordinance providing for a license or tax other than an occupational license, commonly known as an occupational tax? If so, what."
We have answered that above. Only ad valorem taxes and license or occupational taxes are permissible under the constitution and statutes.