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Board of Park Commrs. v. Budget Comm

Supreme Court of Ohio
May 13, 1970
22 Ohio St. 2d 155 (Ohio 1970)

Opinion

Nos. 69-543, 69-556, 69-557, 69-568, 69-569, 69-570 and 69-572

Decided May 13, 1970.

Taxation — One percent city income tax enacted by legislative authority — Electoral approval of ballots to increase to one and one-half percent — Not additional tax voted by electorate, when — R.C. 5739.23.

1. Electoral approval of ballots which read "Shall the Ordinance providing for an increase from one percent (1%) to one and one-half percent (1 1/2%) on income * * * be passed?" is not a one and one-half percent "additional tax * * * voted by its electorate" within the meaning of R.C. 5739.23, as that section read prior to August 18, 1969.

2. Where a one percent city income tax has lawfully been enacted by a legislative authority, the subsequent electoral approval of an ordinance which only increases the rate to one and one-half percent, and does not provide for repeal of the tax in its entirety if the vote fails to win approval, results in the proceeds from the one-half percent increase only being considered as "an additional tax * * * voted by its electorate," as that phrase is used in R.C. 5739.23.

APPEALS from the Board of Tax Appeals.

Appellants, in these cases, which have been consolidated for hearing, are the Board of Park Commissioners of the Youngstown Township Park District, Council of Campbell Taxing Authority, Township of Boardman, Village of Canfield, Township of Austintown, Board of Commissioners of Mahoning County and Council of Village of Lowellville Taxing Authority. The city of Youngstown and the city of Struthers are appellees.

Initially, it must be remembered that the instant action arose under R.C. 5739.23, as that section read on July 24, 1969. Since that date that section has been amended twice. During the period involved, R.C. 5739.23 basically required a county budget commission to allocate the local government fund according to the relative needs of the subdivisions within the county entitled to participate in the distribution. In determining the needs of the subdivisions, the budget commission was required to consider estimated expenditures and estimated revenues of each from all sources other than the local government fund. When estimating the revenues, however, the budget commission was not to include "revenues which a subdivision receives from an additional tax * * * voted by its electorate, in order to enable it to carry on its essential government functions." 131 Ohio Laws 1382, 2030. The effect of excluding this specific type of revenue is the creation of a greater need for a particular subdivision (the difference between estimated expenditures and revenues), and consequently entitlement of the subdivision to a greater proportion of the local government fund than if the revenues were considered.

See 131 Ohio Laws 1382, 2030.

The matter came before the Board of Tax Appeals upon an appeal by the Township of Austintown from the determination of the Mahoning County Budget Commission allocating the amount of the local government fund to each subdivision entitled to participate for the year 1969. The other political subdivisions of Mahoning County and the budget commission were appellees before the board.

The controversy focuses upon the fact that the Board of Tax Appeals, after de novo hearing, excluded city income taxes from the estimated revenues of the cities of Youngstown and Struthers as "an additional tax voted by the electorate." ($7,600,000 excluded from Youngstown's estimated revenue and $285,000 from the estimated revenue of Struthers.) The board's exclusion greatly increased the needs of Youngstown and Struthers and resulted in their receiving a much larger share of the local government fund than the commission had give them.

Youngstown's city income tax rate has been one and one-half percent since December 14, 1967. Previous to that date there was a one percent tax which had been enacted by council. At a special election on December 14, 1967, the electorate approved an ordinance by a favorable vote on a ballot which read as follows: "Shall the ordinance providing for an increase from one percent (1%) to one and one-half percent (1 1/2%) on income for the purpose of PROVIDING FUNDS FOR GENERAL MUNICIPAL OPERATIONS AND OTHER MUNICIPAL PURPOSES be passed?" Testimony before the Board of Tax Appeals reveals that, in the opinion of the Director of Finance of the city of Youngstown, the effect of the December 14, 1967, election was to increase the income tax from one percent to one and one-half percent. He also stated that, in his opinion, had the referendum on the December 14th ballot not passed, the one percent tax would still have remained in effect.

Similarly, the ballot used by the city of Struthers in the election held on December 18, 1968, read as follows: "Shall the ordinance providing for an increase from one percent (1%) to one and one-half percent (1 1/2%) levied on income for the purpose of providing funds for general municipal operations and other municipal purposes be passed?" Opinion testimony by the city auditor of the city of Struthers expressed a like opinion that a failure of the passage of the increase would not have obliterated the existing one percent city income tax.

Appellees, Youngstown and Struthers, argue that neither the method followed nor the decision reached by the Board of Tax Appeals was unreasonable or unlawful. They contend that the effect of the special elections was to enact a one and one-half percent income tax by the electorate qualifying the total tax amount for the exclusionary provisions of R.C. 5739.23, supra.

On the other hand, appellants argue that the vote was merely on an increase of the tax rate. They base their arguments upon the testimonial opinions given before the Board of Tax Appeals; the fact that there was no provision, either on the ballot or in the ordinance placing a total one and one-half percent tax on the ballot that provided for a repeal of the prior councilmanic ordinance which levied the one percent income tax, and the fact that the ballot language on its face informed the voters that they could vote "yes" or "no" on the increase, not "yes" or "no" on a total income tax.

Messrs. Manchester, Bennett, Powers Ullman and Mr. James E. Bennett, Jr., for appellant Board of Park Commissioners of Youngstown Township Park District.

Mr. Thomas L. Corroto, for appellants Council of Campbell, Taxing Authority and Council of Village of Lowellville, Taxing Authority.

Mr. Henry C. Robinson, for appellant Township of Boardman, Mahoning County.

Mr. Fred Coope, for appellants Village of Canfield and Township of Austintown.

Mr. Vincent E. Gilmartin, prosecuting attorney, for appellant Board of County Commissioners of Mahoning County. Mr. Patrick J. Melillo, director of law, for appellee City of Youngstown.

Mr. Theodore T. Macejko, city solicitor, for appellee City of Struthers.


The Board of Tax Appeals considers appeals from a county budget commission's allocation of the local government fund de novo as if it were the budget commission. Brooklyn v. Cuyahoga County Budget Comm., 2 Ohio St.2d 181, paragraph two of syllabus. Our jurisdiction is limited to deciding whether the board's decision was unreasonable or unlawful. R.C. 5717.04; Youngstown Club v. Porterfield, 21 Ohio St.2d 83, and cases cited therein, at page 85.

The cities of Youngstown and Struthers urge the reasonableness of the board's conclusion that electoral approval of an increased income tax (from one percent to one and one-half percent) was a one and one-half percent "additional tax voted by the electorate." We do not agree.

This court has recognized that the General Assembly, in granting the credit for an additional voted tax, intended a principle which would neither penalize voters who imposed higher taxes upon themselves nor discourage the imposition of necessary taxes. Painesville v. Board of County Commrs., 17 Ohio St.2d 35, 37-38. See, generally, Lancaster v. Fairfield County Budget Comm., 174 Ohio St. 163. With this in mind, we have liberally construed the phrase "additional tax voted by the electorate" in order to effectuate legislative intent. See New Boston v. Scioto County Budget Comm., 20 Ohio St.2d 151.

However, the evidence adduced herein, liberally construed, fails to accommodate the contention of Youngstown and Struthers that the election in question resulted in an additional one and one-half percent tax being voted by the electorate. The ballots, themselves, clearly state that the question put to the electorate was an increase. No provision was included which would have repealed the previously effective one percent rate had the vote failed.

An income tax lawfully enacted by the legislative authority is not an "additional tax voted by the electorate" within the meaning of R.C. 5739.23, as that section read during the time here in question. Painesville v. Board of County Commrs., 17 Ohio St.2d 35, paragraph one of the syllabus. The one percent taxes here in question were enacted by legislative bodies and cannot be considered as enacted by the electorate unless such legislative action was in some way repealed and included in the amending act.

The record amply demonstrates that the Board of Tax Appeals most likely credited the revenues of Youngstown and Struthers with the entire proceeds from the one and one-half percent income tax. In light of the foregoing, this procedure was clearly erroneous. Only the proceeds of the one-half percent increase should have been credited to those cities as an "additional tax voted by the electorate."

Finally the township of Austintown objects to the Board of Tax Appeals determination of its "actual needs." See Board of Commrs. v. Willoughby Hills, 12 Ohio St.2d 1. After reviewing the record we find that the Board considered all the evidence and its findings as to the dollar amount of the needs of Austintown were not unreasonable.

Therefore, the decision of the Board of Tax Appeals is reversed and the cause is remanded to the Board of Tax Appeals, with instructions to reallocate the local government fund for the year 1969, and in such reallocation to consider only the proceeds from the one-half percent portion of the Youngstown and Struthers income taxes as a credit against anticipated revenue receipts.

Decision reversed.

O'NEILL, C.J., LEACH, SCHNEIDER, HERBERT and CORRIGAN, JJ., concur.

CHIEF JUSTICE TAFT participated in this case which was, however, decided after his death.

LEACH, J., of the Tenth Appellate District, sitting for MATTHIAS, J.


Summaries of

Board of Park Commrs. v. Budget Comm

Supreme Court of Ohio
May 13, 1970
22 Ohio St. 2d 155 (Ohio 1970)
Case details for

Board of Park Commrs. v. Budget Comm

Case Details

Full title:BOARD OF PARK COMMRS. OF YOUNGSTOWN TOWNSHIP PARK DISTRICT, APPELLANT, v…

Court:Supreme Court of Ohio

Date published: May 13, 1970

Citations

22 Ohio St. 2d 155 (Ohio 1970)
258 N.E.2d 435

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