Title: Pal v. Hamilton Cty. Budget Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

Pal, Appellant, v. Budget Commission of Hamilton County, Appellee. 
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[Cite as Pal v. Hamilton Cty. Budget Comm. (1996), _____ Ohio St. 3d 
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_____.] 
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Taxation -- Property taxes -- In an appeal to the Board of Tax Appeals 
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under R.C. 5705.341 concerning a tax levy, the taxing entity or 
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entities whose funding is affected by the outcome of the appeal must 
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be named as appellees in the notice of appeal. 
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(No. 94-2194--Submitted September 28, 1995--Decided January 3, 
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1996.) 
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Appeal from the Board of Tax Appeals, No. 93-P-1211. 
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On November 6, 1990, the voters of Hamilton County, Ohio, 
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approved a tax levy put on the ballot by the Board of County 
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Commissioners (“County Commissioners”), in excess of the ten-mill 
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limitation.  The tax levy (“mental health levy”), in the amount of 1.99 mills, 
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was to be levied for a term of five years and was designated for the 
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acquisition, construction, renovation, financing, maintenance and operation 
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of mental health facilities for the county’s community mental health service 
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district.  The community mental health service district is administered by the 
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community mental health services board (“Mental Health Board”). 
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As of June 1993, the Mental Health Board had accumulated a fund 
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balance of approximately $32,000,000.  On August 30, 1993, the Budget 
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Commission of Hamilton County (“Budget Commission”) voted to roll back 
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the mental health levy from 1.99 mills to 1.81 mills.  The rollback reduced 
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the revenue derived from the mental health levy by approximately 
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$2,000,000 per year. 
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On October 14, 1993, appellant, John Pal, filed a notice of appeal 
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with the Board of Tax Appeals (“BTA”) pursuant to R.C. 5705.341.  In his 
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notice of appeal, Pal contended that the Budget Commission’s action to roll 
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back the levy millage did not comply with R.C. 5705.01 to 5705.47 because 
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the Budget Commission was without authority to determine whether the 
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monies generated by the mental health levy were needed.  Pal further 
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contended that the action of the Budget Commission was in violation of the 
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rights of the voters of Hamilton County to determine the level of budgeting 
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for mental health programs through the levy process.  The only appellee that 
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Pal named in his notice of appeal was the Budget Commission. 
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Pal apparently made timely filings of the copies of the notice of 
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appeal with all the entities specified in R.C. 5705.341.  However, the 
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Budget Commission filed a motion to dismiss, stating two grounds for 
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dismissal:  (1) the appeal failed to name necessary parties as appellees, and 
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(2) the appeal failed to “specify in detail” why the complained-of tax rate “is 
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not necessary to produce the revenue needed” by the taxing district. 
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The BTA granted the motion to dismiss on the basis that Pal did not 
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name as appellees all necessary parties to the appeal.  The BTA did not rule 
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on the second ground of the motion relating to failure to specify error.  Pal 
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filed an appeal with this court. 
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This cause is now before this court upon an appeal as of right. 
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Kircher, Robinson, Cook, Newman & Welch and Robert B. Newman, 
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for appellant. 
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Joseph T. Deters, Hamilton County Prosecuting Attorney, and 
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Thomas J. Scheve, Assistant Prosecuting Attorney, for appellee. 
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Per Curiam.  The only issue before this court is whether the BTA 
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properly dismissed Pal’s appeal under R.C. 5705.341 for failure to join as 
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necessary parties to the appeal the County Commissioners and the Mental 
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Health Board. 
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The Budget Commission contends that both the Mental Health Board 
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and the County Commissioners should have been named as appellees, and 
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that the failure to name them deprived the BTA of jurisdiction over the 
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necessary parties.  Pal on the other hand contends that the Budget 
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Commission is the only necessary party to an appeal under R.C. 5705.341.   
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R.C. 5705.341 provides that “[a]ny person required to pay taxes on 
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real, public utility, or tangible personal property in any taxing district or 
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other political subdivision of this state may appeal” certain actions of the 
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county budget commission to the BTA.  R.C. 5705.341 requires copies of 
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the notice of appeal to be filed with the BTA, Tax Commissioner, county 
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auditor and the fiscal officer of each taxing district or other political 
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subdivision authorized to levy the tax at issue.  While R.C. 5705.341 states 
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specifically with whom copies of the notice of appeal must be filed, it is 
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silent as to whom must be named as necessary parties to the appeal. 
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The Budget Commission, composed of the county auditor, county 
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treasurer, and the prosecuting attorney (R.C. 5705.27), is a statutorily 
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created administrative and ministerial body.  Its function is generally to 
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review the tax budget of the county and to certify for collection the 
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appropriate taxes among the various subdivisions and other taxing units 
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within the county.  R.C. 5705.31.  The Budget Commission is required by 
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R.C. 5705.31 to examine each budget and determine the total amount of 
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money to be raised in the county for purposes of each subdivision and other 
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taxing units therein.  Id. 
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A single-county mental health board does not have the authority to 
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levy taxes.  R.C. 5705.01(C) and 5705.03.  Therefore, it does not have the 
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ability to propose any tax levy to the voters in its own name.  The single-
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county mental health board must obtain its funds through the county 
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commissioners because R.C. 340.07 designates the county commissioners as 
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the tax-levying entity to make appropriations for a single-county mental 
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health service district and because R.C. 5705.221(A) authorizes the county 
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commissioners to levy a tax in excess of the ten-mill limitation for the 
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benefit of that district.  Thus, while the 1.99 mill levy passed by the 
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Hamilton County voters was a levy proposed by the County Commissioners, 
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it was a levy to fund the Mental Health Board.  Any changes made by the 
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Budget Commission to the 1.99 mill levy would affect the budgets of both 
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the County Commissioners and the Mental Health Board, whose budget is 
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part of the County Commissioners’ budget.  
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The Budget Commission examined the budget of the County 
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Commissioners, which included the budget for the Mental Health Board.  
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Under R.C. 5705.32(A), the Budget Commission is to adjust the estimated 
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amounts required from the general property tax for each fund, as shown by 
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the budgets, to bring the tax levies required therefor within the limitations 
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specified in R.C. 5705.01 to 5705.47.  In this case the Budget Commission 
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voted to reduce the mental health levy from 1.99 mills to 1.81 mills. 
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This is a case of first impression for this court.  Three principal 
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sections provide for appeals from the actions of a budget commission:  (1) 
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R.C. 5747.55 allows appeals of the commission’s apportionments of the 
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county’s undivided local government fund and undivided local government 
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revenue assistance fund; (2) R.C. 5705.37 allows appeals by taxing 
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authorities and certain other entities dissatisfied with any action of the 
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county budget commission; and (3) R.C. 5705.341 allows appeals by 
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taxpayers concerning the fixing of uniform rates, and the rate necessary to 
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be levied.  Of these three statutes, only R.C. 5747.55 contains an express 
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provision identifying the necessary parties to the appeal.  R.C. 
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5747.55(C)(3) and (D) require that subdivisions that are alleged to have 
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received more than a proper share of the funds are to be named as appellees.  
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It allows no changes to be made in the amount allocated to any subdivision 
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not named as an appellee.  R.C. 5747.55(D). 
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R.C. 5705.37, like R.C. 5705.341, does not specify the necessary 
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parties to an appeal.  It merely states that copies of the notice of appeal must 
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be filed with the BTA and the budget commission.  It further states that the 
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budget commission is to give notice of the appeal to all persons who were 
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parties to the proceedings before the budget commission. 
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In Berea City School Dist. v. Cuyahoga Cty. Budget Comm. (1979), 
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60 Ohio St. 2d 50, 14 O.O. 3d 209, 396 N.E. 2d 767, we had to determine 
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which parties were necessary parties for an appeal under R.C. 5705.37.1  To 
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determine who the necessary parties were in Berea, we turned for guidance 
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to another appeal statute, R.C. 5747.55, which had recently been amended 
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to provide that the only necessary parties to an appeal under that statute 
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were those subdivisions which were alleged to have received a 
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disproportionate share of the tax millage.  The similarities between appeals 
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under R.C. 5747.55 and 5705.37 led us to conclude that the requirements 
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for both should be uniform.  Thus, we held that necessary parties under R.C. 
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5705.37 were those subdivisions within the county which are affected by 
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the appeal. 
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Applying these concepts to this case, it is clear that, while both the 
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County Commissioners and the Mental Health Board are affected by the 
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outcome of the appeal, only the County Commissioners represent a 
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subdivision. Therefore, the County Commissioners should have been named 
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as a necessary party in the appeal.  This result allows the County 
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Commissioners, the only subdivision affected by the outcome of the appeal, 
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to present evidence and cross-examine witnesses. 
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By this decision, R.C. 5747.55, 5705.37, and 5705.341 are now 
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uniform in requiring that all tax-levying entities whose funding is affected 
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by the outcome of an appeal under these sections of the Revised Code are 
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necessary parties to an appeal to the BTA and must be named as appellees 
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in the notice of appeal. 
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Therefore, we hold that, in an appeal to the BTA under R.C. 5705.341 
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concerning a tax levy, the taxing entity or entities whose funding is affected 
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by the outcome of the appeal must be named as appellees in the notice of 
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appeal because they are necessary parties to the appeal. 
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The decision of the BTA, being neither unreasonable nor unlawful, is 
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hereby affirmed. 
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Decision affirmed. 
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MOYER, C.J., DOUGLAS, WRIGHT, RESNICK, F.E. SWEENEY, PFEIFER 
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and COOK, JJ., CONCUR. 
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1 Although R.C. 5705.37 is never cited in Berea, it is clear from the BTA orders being appealed in that case 
that it is the statute being reviewed.