Summary
In Andover Twp. v. Ashtabula Cty. Budget Comm. (1977), 49 Ohio St.2d 171, 3 O.O.3d 238, 360 N.E.2d 690, the city of Ashtabula approved an alternative method for distribution of the ULGF only one year at a time.
Summary of this case from Reynoldsburg v. Budget CommissionOpinion
No. 76-817
Decided February 23, 1977.
Taxation — Allocation of local government fund — R.C. 5747.51 et seq. — Method of allocation — Approval by legislative authority — Effect.
APPEAL from the Board of Tax Appeals.
On December 26, 1972, Resolution No. 6820 was adopted by the Ashtabula city council, the legislative authority of the most populous city located wholly or partially in Ashtabula County. This resolution authorized the Ashtabula County Budget Commission to allocate the 1973 local government fund in accordance with the provisions of R.C. 5747.53 (hereinafter the "alternative method"). Similar resolutions were adopted by the Ashtabula county commissioners, by a majority of the boards of township trustees, and by a majority of the legislative authorities of the other municipalities in Ashtabula County. The allocation for 1973 was subsequently made as provided by the "alternative method." In the succeeding two years the city of Ashtabula adopted resolutions, wherein it was agreed that the allocation of the local government fund for the years 1974 and 1975 also be made according to the "alternative method."
The resolution was entitled: "Resolution Supporting Local Government Fund Allocations for 1973 as Set Forth by the Ashtabula County Budget Commission." (Emphasis added.)
In 1976, the Ashtabula city council declined to adopt an "alternative method" resolution. The budget commission then proceeded to allocate the local government fund according to the method set out in R.C. 5747.51 and 5747.52 (hereinafter the "statutory method").
R.C. 5747.51 states, in part:
"(A) Within ten days after the fifteenth day of July of each year, the board of tax appeals shall make and certify to the county auditor of each county an estimate of the amount of the local government fund to be allocated to the undivided local government fund of each county for the ensuing calendar year and the estimated amount to be received by the undivided local government fund of each county from the taxes levied pursuant to Section 5707.03 of the Revised Code for the ensuing calendar year.
"(B) At each annual regular session of the county budget commission convened pursuant to Section 5705.27 of the Revised Code, each auditor shall present to the commission the certificate of the board, the annual tax budget and estimates, and the records showing the action of the commission in its last preceding regular session. * * * The commission * * * shall determine the amount of the undivided local government fund needed by and to be apportioned to each subdivision for current operating expenses, as shown in the tax budget of the subdivision. This determination shall be made pursuant to divisions (C), (D), (E), (F), (G), (H), and (I) of this section, unless the commission has provided for a formula pursuant to Section 5747.53 of the Revised Code." (Emphasis added.)
Appellees herein, the 27 Ashtabula County townships, protested that once the "alternative method" had been adopted, as provided by R.C. 5747.53(A), it could only be revised, amended or repealed in the same manner that it was originally adopted and approved.
R.C. 5747.53(A) provides:
"In lieu of the method of apportionment of the undivided local government fund of the county provided by Section 5747.51 of the Reised Code, the county budget commission may provide for the apportionment of such fund under an alternative method or on a formula basis as authorized by this section. Such alternative method of apportionment shall have first been approved by all of the following governmental units: the board of county commissioners; the legislative authority of the city, located wholly or partially in the county, with the greatest population; and a majority of the boards of township trustees and legislative authorities of municipal corporations, located wholly or partially in the county, excluding the legislative authority of the city with the greatest population. In granting or denying such approval, the board of county commissioners, boards of township trustees, and legislative authorities of municipal corporations shall act by motion. A motion to approve shall be passed upon a majority vote of the members of a board of county commissioners, board of township trustees, or legislative authority of a municipal corporation, shall take effect immediately, and need not be published. Any method of apportionment adopted and approved under this section may be revised, amended, or repealed in the same manner as it may be adopted and approved. In the event a method of apportionment adopted and approved under this section is repealed, the undivided local government fund of the county shall be apportioned among the subdivisions eligible to participate therein, commencing in the ensuing calendar year, under the apportionment provided in Section 5747.52 of the Revised Code, unless a new method of apportionment of such fund is provided in the action of repeal." (Emphasis added.)
This matter was considered by the Board of Tax Appeals after the Ashtabula County townships filed notices of appeal under the provisions of R.C. 5705.37. The Board of Tax Appeals agreed with the appellees' above-stated position, and declared the language of the original resolution of the city of Ashtabula, limiting its participation in the "alternative method" to one year, to be "mere surplus-age." Finding the allocation of the 1976 local government fund by the "statutory method" to be in error, the Board of Tax Appeals remanded the matter with instructions to allocate the fund under the provisions of the "alternative method."
The cause is now before this court upon an appeal by Robert Sabo, Auditor of the city of Ashtabula, as a matter of right.
Messrs. Webb DiFabio, Mr. Robert D. Webb, Mr. Louis A. DiFabio and Mr. Chester Hummel, for appellees.
Mr. George Liviola, Jr., city solicitor, and Mr. William P. Bobulsky, for appellant.
The local government fund is a form of financial state support of the smaller governmental units existing in Ohio. It is composed of a portion of the state sales tax receipts and the state-collected tax on "capital employed by financial institutions, and * * * by dealers in intangibles." These funds are transferred by the state auditor to the several counties for distribution to the local subdivisions. A group of three county officials, designated as the budget commission, then has the responsibility of allocating the local government fund. The budget commission may apportion such funds on a straight formula basis, the "statutory method," or by the "alternative method," which latter method allows the budget commission to consider any factor deemed to be "appropriate and reliable," in its sole discretion. The budget commission meets annually, on the first Monday in August, at which time it considers the budget submitted by each governmental subdivision.
Appellant presents several arguments to this court which, he urges, warrant a reversal of the Board of Tax Appeals' decision to reinstate the "alternative method." We are not persuaded that the adoption of the "alternative method" by the various governmental units constitutes a contract, and hence reject appellant's attempt to apply principles of contract law. Likewise, we find no merit in appellant's assertion that the statutory scheme for adoption and repeal of the "alternative method" abrogates a purported power of local self-government. (See Beachwood v. Bd. of Elections, 167 Ohio St. 369.) We do, however, agree with both appellant and appellees that the apparent intent of the General Assembly, in enacting R.C. 5747.53, was to maximize flexibility in the allocation of the local government fund.
The city of Ashtabula has agreed to participate in the more flexible method of allocation of funds, yet has sought to limit its participation by annual resolutions which commit it to the "alternative method" for the next succeeding year only. After having considered, in pari materia, all the Ohio statutes pertaining to the annual distribution of the local government fund, we are unable to agree with the Board of Tax Appeals' decision requiring that the city be indefinitely locked into the "alternative method," when it has expressly limited its participation in that method to a definite period of time and the entire statutory scheme implies an annual determination of the method of distribution.
Accordingly, this court holds that the Board of Tax Appeals' decision is unreasonable and unlawful, and it is, therefore, reversed.
Decision reversed.
O'NEILL, C.J., HERBERT, CELEBREZZE, P. BROWN, SWEENEY and LOCHER, JJ., concur.
In the process of ruling that the city of Ashtabula may unilaterally limit its participation in an alternative apportionment plan to one year, the majority loses sight of its responsibility to uphold reasonable and lawful determinations of the Board of Tax Appeals (R.C. 5717.04; Wheeling Steel Corp. v. Evatt, 143 Ohio St. 71) and to interpret statutes according to their clear meaning ( Provident Bank v. Wood, 36 Ohio St.2d 101).
Nothing within R.C. 5747.53 supports the majority's conclusion. The statute places no time restrictions on alternative apportionment plans. It does not limit their duration, call for their periodic review or provide for the short-term, conditional adoption of those plans which the city of Ashtabula seeks, in this cause, to impose on the other municipalities and townships within Ashtabula County. Indeed, the only procedure for terminating an alternative plan to be found in R.C. 5747.53 is that of repeal. Repeal is only effective if carried out "in the same manner" as the adoption or approval of an alternative plan. Adoption and approval depend, in turn, on the consent of the following entities: "the board of county commissioners," the "legislative authority" of the most populous city in the county, " and a majority of the boards of township trustees and legislative authorities of municipal corporations, located wholly or partially in the county * * *." (Emphasis added.) Since the plans may not be adopted or approved by the unilateral action of one municipality, and since there are no provisions for annual review or renewal built into R.C. 5747.53, the city of Ashtabula cannot repeal an alternative plan merely by limiting the duration of its participation in that plan. The Board of Tax Appeals reasonably and lawfully determined "that there is nothing in Revised Code Section 5747.53 which would authorize or permit any political subdivision to limit its participation in the `alternative method' to one year * * *."
Furthermore, there is nothing in the "statutory scheme" cited by the majority which justifies its ruling that R.C. 5747.53 allows a city to reconsider annually its participation in an alternative apportionment plan. R.C. 5739.21 and 5725.24, which deal with monthly credits to and with disbursements of tax moneys to county local government funds, are inapposite. R.C. 5705.27 and 5705.30, which refer to the annual levy of taxes and review of local budgets by the county budget commission, R.C. 5747.50, which guarantees an annual minimum of $150,000 for each county local government fund, and R.C. 5747.51, which sets up the statutory alternative to R.C. 5747.53, merely reflect the fact that most tax revenues are collected, and local budgets are usually drawn up, on an annual basis. The annual levy and collection of taxes should not affect the duration of an apportionment plan regulating how, and not when, funds are to be allocated.
R.C. 5747.53 provides, in pertinent part:
"(A) In lieu of the method of apportionment of the undivided local government fund of the county provided by Section 5747.51 of the Revised Code, the county budget commission may provide for the apportionment of such fund under an alternative method or on a formula basis as authorized by this section." (Emphasis added.)
Since the statutes do not support the conclusion reached by the majority, and ample evidence does support the determination of the Board of Tax Appeals, I dissent.