Title: E. Liverpool v. Columbiana Cty. Budget Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as E. Liverpool v. Columbiana Cty. Budget Comm., 114 Ohio St.3d 133, 2007-Ohio-
3759.] 
 
 
CITY OF EAST LIVERPOOL, APPELLANT v. COLUMBIANA  
COUNTY BUDGET COMMISSION ET AL., APPELLEES. 
[Cite as E. Liverpool v. Columbiana Cty. Budget Comm., 
 114 Ohio St.3d 133, 2007-Ohio-3759.] 
Constitutional challenge — Alternative method of apportioning Undivided Local 
Government Fund and Undivided Local Government Revenue Assistance 
Fund — No violation of constitutional guarantees of uniformity and equal 
protection and the prohibition of retroactive legislation. 
 (Case No. 2006-1129 — Submitted April 4, 2007 — Decided August 8, 2007.) 
APPEAL from the Board of Tax Appeals,  
Nos. 2003-T-1301, 2004-T-844, 2005-T-1474. 
__________________ 
 
LUNDBERG STRATTON, J. 
{¶ 1} The city of East Liverpool challenges the constitutionality of 2002 
Sub.H.B. No. 329 (“H.B. 329”), which changed the procedures by which certain 
counties, including Columbiana County, may adopt an “alternative method” of 
apportioning the county’s Undivided Local Government Fund (“ULGF”) and the 
Undivided Local Government Revenue Assistance Fund (“ULGRAF”) among the 
political subdivisions of the county.  149 Ohio Laws, Part IV, 7881. 
{¶ 2} Because we hold that the H.B. 329 amendments do not violate the 
constitutional guarantees of uniformity and equal protection and the prohibition 
against retroactive legislation, we affirm the decision of the Board of Tax Appeals 
(“BTA”). 
Factual Background and Procedural History 
{¶ 3} In 2002, the General Assembly passed H.B. 329, which amended 
R.C. 5747.53 and 5747.63 to allow ULGF and ULGRAF money to be distributed 
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among subdivisions under an alternative apportionment scheme without the 
approval of the largest municipal corporation in the county.  149 Ohio Laws, Part 
IV, at 7884, 7887.  In Columbiana County, the political subdivisions utilized the 
H.B. 329 procedures and adopted a new method of apportioning ULGF and the 
ULGRAF money for the distribution years 2003, 2004, 2005, and 2006. 
{¶ 4} East Liverpool challenged the budget commission’s August 2002 
apportionment of funds for 2003.  We upheld the apportionment and affirmed the 
BTA’s decision in E. Liverpool v. Columbiana Cty. Budget Comm., 105 Ohio 
St.3d 410, 2005-Ohio-2283, 827 N.E.2d 310. 
{¶ 5} Thereafter, East Liverpool also appealed from the budget 
commission’s apportionment for the years 2004 through 2006 based on the same 
alternative formula.  The BTA affirmed the apportionment but declined to 
consider East Liverpool’s constitutional claims as beyond the scope of its 
jurisdiction. 
{¶ 6} In this appeal, East Liverpool asserts that H.B. 329 on its face 
violates the Uniform-Operation and Retroactivity Clauses of the Ohio 
Constitution and the Equal Protection Clauses of the Ohio and United States 
Constitutions. 
{¶ 7} Beginning with the 2003 distribution year, the results from 
apportioning ULGF and ULGRAF by the alternative formula in Columbiana 
County differed significantly from those of preceding years.  Under earlier 
apportionment procedures, East Liverpool had received 26.9 percent of the funds 
each year pursuant to a 1990 agreement among political subdivisions, even 
though the city constitutes only about 12 percent of the county’s population.  See 
Columbiana Cty. Park Dist. v. Columbiana Cty. Budget Comm. (Dec. 19, 1994), 
B.T.A. No. 93-D-1174, 1994 WL 1711193. 
{¶ 8} Application of H.B. 329 changed that outcome.  The new 
alternative method of apportionment has reduced East Liverpool’s share of the 
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3 
local government funds to between five percent and six percent of the ULGF and 
ULGRAF during each of the distribution years at issue. 
{¶ 9} Each year, at least 24 out of the 31 townships and municipalities in 
Columbiana County, excluding East Liverpool, approved the new method of 
apportionment.  Moreover, those subdivisions represented at least 74 percent of 
all the county’s residents. 
H.B. 329 Amendments to R.C. 5747.53 and 5747.63 
{¶ 10} Ohio law mandates that a specified portion of various state taxes 
be placed in a “local government fund” and a “local government revenue 
assistance fund.”  R.C. 5747.03(A)(1) and 5747.61(B).  The Tax Commissioner 
distributes the funds to county treasurers, who credit the funds to the ULGF and 
the ULGRAF of each county, to be apportioned among the county’s political 
subdivisions.  R.C. 5747.50, 5747.501, 5747.51, and 5747.61.  
{¶ 11} There are two methods of apportioning these funds: a “statutory” 
method based on the relative need of each political subdivision, and an 
“alternative method or formula.”  R.C. 5747.51, 5747.62, 5747.53, and R.C. 
5747.63.  Prior to H.B. 329, in order to use the alternative method, the county had 
to obtain approval of the county commissioners, the legislative body of the most 
populous (hereinafter “largest”) city in the county,1 and a majority of the other 
political subdivisions in the county.  1991 Am.Sub.H.B. No. 298, 144 Ohio Laws, 
Part III, 3987, 4474, and 1989 Am.Sub.H.B. No. 111, 143 Ohio Laws, Part II, 
2331, 2636-2637.  See E. Liverpool v. Columbiana Cty. Budget Comm. (2000), 90 
Ohio St.3d 269, 270, 737 N.E.2d 44. 
{¶ 12} H.B. 329 changed the law by permitting certain counties to adopt 
an alternative method of apportionment without the largest city’s approval.  R.C. 
                                                 
1.  We use the term “largest city” as shorthand for the somewhat more complex term in the statute, 
“largest municipal corporation in the county,” which arises primarily from the fact that large cities 
sometimes include territory in more than one county, an issue not material to this case.  
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5747.53(C) and 5747.63(C) provide that “two or more participating political 
subdivisions” that together have the “majority of the [county’s] total population” 
may pass resolutions “to exclude the approval otherwise required” of the county’s 
largest city in order to adopt an alternative method of apportionment.  The county 
commissioners, along with a majority of the legislative authorities in the county 
“other than” those in the largest city, may then adopt the alternative method. 
{¶ 13} Pursuant to these provisions, certain political subdivisions of 
Columbiana County initially passed resolutions to “exclude the approval” of East 
Liverpool and then passed resolutions approving a new method of apportionment.  
In this appeal, East Liverpool’s constitutional challenges focus not on its 
exclusion, but rather on the fact that once excluded, it was not permitted to vote 
on the adoption of the alternative method.  Under H.B. 329, once the other 
political subdivisions exclude the largest city, that city has no voice in whether the 
new method is ultimately adopted.  East Liverpool argues that this feature of the 
statute is facially unconstitutional.  We conclude that contrary to East Liverpool’s 
contentions, the statute is not unconstitutional on its face.2 
H.B. 329 Does Not Violate the Constitutional 
Requirement of Uniform Operation 
{¶ 14} “All laws, of a general nature, shall have a uniform operation 
throughout the state.”   Section 26, Article II of the Ohio Constitution.  East 
Liverpool contends that the new procedure for adopting an alternative method of 
apportionment violates the Uniformity Clause because it is limited to “counties in 
which [the largest city] has a population of twenty thousand or less and a 
population that is less than fifteen per cent of the total population of the county.” 
                                                 
2.  Appellees suggest that our review is precluded by Satow v. Columbiana Cty. Budget Comm., 
Columbiana App. No. 04-CO-13, 2005-Ohio-5312, appeal not accepted, 108 Ohio St.3d 1475, 
2006-Ohio-665, 842 N.E.2d 1054.  Satow did not consider the constitutional issues that East 
Liverpool now asserts.   
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R.C. 5747.53(C) and 5747.63(C).  According to East Liverpool, this geographic 
limitation transforms H.B. 329 into a special law on a general subject matter. 
{¶ 15} This argument fails because the Uniformity Clause prohibits 
arbitrary geographic distinctions, not reasonable measures that have a geographic 
element or disparate geographic effect.  See State ex rel. Zupancic v. Limbach 
(1991), 58 Ohio St.3d 130, 568 N.E.2d 1206, paragraph one of the syllabus (if 
statute has disparate geographic results but “achieves a legitimate governmental 
purpose and operates equally on all persons or entities included within its 
provisions,” it satisfies the Uniformity Clause); Austintown Twp. Bd. of Trustees 
v. Tracy (1996), 76 Ohio St.3d 353, 357, 667 N.E.2d 1174.  Limiting the 
exclusion provision to certain counties based on population represents a rational 
balancing of political subdivision interests.  In large counties where the largest 
city contains a high percentage of the county’s inhabitants, the approval of the 
largest city is necessary to adopt an alternative method under current law.  
Otherwise, several smaller subdivisions that represent only a small fraction of the 
county’s population could determine the method of apportionment.  By contrast, 
the General Assembly could rationally conclude that in a small county in which 
few of the cities are of similar size, the interests of the largest city should not 
weigh more heavily than those of other political subdivisions in the county. 
{¶ 16} Moreover, a statute may set forth criteria that limit the statute’s 
operation to a few counties so long as “there are no limitations or restrictions that 
prevent other [geographic areas] from qualifying in the future.”  Kelleys Island 
Caddy Shack, Inc. v. Zaino, 96 Ohio St.3d 375, 2002-Ohio-4930, 775 N.E.2d 489, 
¶ 17.  The population thresholds of H.B. 329 are “open ended,” and any county 
may qualify under those thresholds “given a sufficient change in circumstances.”  
Id. at ¶ 19. 
{¶ 17} East Liverpool also argues that even if it is rational to exclude the 
necessity for the largest city’s approval, it is irrational to exclude the largest city 
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from voting on approval of the new method.  This argument does not state an 
objection that is cognizable under the Uniformity Clause because it does not relate 
to whether H.B. 329 is valid “general” legislation as opposed to improper 
“special” or “local” legislation.  The contention that a county’s largest city must 
have the same opportunity as other subdivisions to participate in adopting an 
alternative method does not, by itself, involve the kind of limitation that 
implicates the Uniformity Clause’s prohibition against special or local laws. 
{¶ 18} At oral argument, counsel for East Liverpool also contended that 
an arbitrary classification in a special law is an unconstitutional violation of the 
Uniformity Clause.  He asserted that “when a law uses a population threshold, 
that is the fingerprint of a special law,” while conceding that a “special law is not 
per se invalid under the Uniformity Clause.”  We find no support for East 
Liverpool’s approach.  As previously stated, H.B. 329 is a general law, and case 
law establishes that it has the requisite uniform operation throughout the state.  
Hixson v. Burson (1896), 54 Ohio St. 470, 482, 43 N.E. 1000. 
{¶ 19} Under Section 26, Article II of the Ohio Constitution, the General 
Assembly may pass a law that does not operate uniformly only if it is not a law 
“of a general nature.”  In this case, H.B. 329 plainly constitutes a law “of a 
general nature” because it addresses a “subject that does or may exist in, and 
affect the people of, every county in the state.”  Hixson, 54 Ohio St. at 481, 43 
N.E. 1000.  Because the population threshold in H.B. 329 bears a substantial 
relationship to the purpose of excluding the necessity for the largest city’s 
approval, we hold that H.B. 329 operates uniformly and satisfies the mandate of 
the Uniformity Clause. 
H.B. 329 Does Not Facially Violate the Guarantee of Equal Protection. 
{¶ 20} East Liverpool also argues that H.B. 329 violates the Equal 
Protection Clauses by depriving the largest city in certain counties of any voice in 
whether a new alternative method is adopted.  We have held that ordinarily, “[a] 
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political subdivision * * * receive[s] no protection from the Equal Protection or 
Due Process Clauses vis-a-vis its creating state.”  Avon Lake City School Dist. v. 
Limbach (1988), 35 Ohio St.3d 118, 122, 518 N.E.2d 1190.  But East Liverpool is 
not advancing equal protection rights for itself.  Rather, it is asserting the equal 
protection rights of its citizens and council members.  This claim raises the 
threshold issue of East Liverpool’s standing to assert the rights of third parties. 
A.  Standing  
{¶ 21} In general, a political subdivision lacks standing to assert the rights 
of a third party.  In State ex rel. Harrell v. Streetsboro City School Dist. Bd. of 
Edn. (1989), 46 Ohio St.3d 55, 63, 544 N.E.2d 924, we held that a school board 
lacked standing to raise on behalf of certain electors an equal protection challenge 
to statutes that prescribed procedures for transferring territory from one school 
district to another.  We reasoned that because the school district “is not a member 
of the class [i.e., the “qualified electors”] it identifies, it lacks standing to attack 
the statute’s constitutionality on the ground that it violates others’ rights to equal 
protection.”  Id. at 63, 544 N.E.2d 924.  In Bernardini v. Conneaut Area City 
School Dist. Bd. of Edn. (1979), 58 Ohio St.2d 1, 3, 12 O.O.3d 1, 387 N.E.2d 
1222, fn.1, we similarly denied standing to a school district trying to assert the 
equal protection rights of third parties.  We held that the school board was “not 
within the class allegedly discriminated against, [so] it lacks standing” to 
challenge the statute.  Id. 
{¶ 22} Nevertheless, we acknowledge that federal courts have recognized 
exceptions to this general rule when a claimant (i) suffers its own injury in fact, 
(ii) possesses a sufficiently “ ‘close’ relationship with the person who possesses 
the right,” and (iii) shows some “hindrance” that stands in the way of the claimant 
seeking relief.  Kowalski v. Tesmer (2004), 543 U.S. 125, 129-130, 125 S.Ct. 564, 
160 L.Ed.2d 519.  Given the nature of the equal protection claim in this case, East 
Liverpool satisfies these criteria. 
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{¶ 23} First, East Liverpool suffers a direct injury to its own treasury.  
Indeed, the equal protection interest of East Liverpool’s citizens concerns their 
interest in the city’s treasury:  if East Liverpool is deprived of its voice in 
determining the nature of the alternative method of apportionment, the city may 
have less money to furnish services to its citizens.  The injury claimed by East 
Liverpool is intertwined with the injury claimed by its citizens. 
{¶ 24} Second, there is a close relationship between East Liverpool and its 
citizens with respect to the equal protection claim.  The city and its citizens have 
an interdependent interest in the city’s treasury.   
 
{¶ 25} Third, efforts by East Liverpool’s citizens to assert their own 
claims have been hindered. Certain individual citizen/taxpayers of East Liverpool 
already tried to assert an equal protection claim, only to have it denied for lack of 
standing.  Satow v. Columbiana Cty. Budget Comm., Columbiana App. No. 04-
CO-13, 2005-Ohio-5312, ¶ 8, 20-22.  Specifically, the Seventh District Court of 
Appeals in Satow concluded that individual citizens of East Liverpool “merely 
allege injuries that harm the public generally and have failed to adduce personal 
injuries caused by the statute.”  Id. at ¶ 21. Therefore, we believe that East 
Liverpool is the appropriate claimant under these circumstances to assert the 
equal protection claim on behalf of its citizens.  See Craig v. Boren (1976), 429 
U.S. 190, 197, 97 S.Ct. 451, 50 L.Ed.2d 397.  See, also, Cincinnati City School 
Dist. v. State Bd. of Edn. (1996), 113 Ohio App.3d 305, 314, 680 N.E.2d 1061 
(permitting school district to challenge territory transfer based on equal protection 
rights of students); Washington v. Seattle School Dist. No. 1 (1982), 458 U.S. 457, 
102 S.Ct. 3187, 73 L.Ed.2d 896 (school district successfully challenged state 
ballot initiative as violating equal protection rights of students). 
{¶ 26} Finally, East Liverpool has statutory authority to represent and act 
on behalf of its citizens in connection with budget-commission and BTA 
proceedings.  R.C. 5705.37 and 5747.55.  We read this statutory authorization to 
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extend to constitutional claims that are based on rights of its citizens if those 
rights are “closely related” to the city’s own interests. 
 
B.  Equal Protection  
{¶ 27} East Liverpool asserts that H.B. 329 on its face violates the Equal 
Protection Clauses of the Fourteenth Amendment to the United States 
Constitution and Section 2, Article I of the Ohio Constitution because the 
distinction between the largest city and other subdivisions does not constitute a 
rational classification.  In particular, East Liverpool contends that both federal and 
state constitutions require that the largest city be counted in determining whether 
a majority of subdivisions has approved the new alternative method.3  East 
Liverpool’s arguments appear to parse the H.B. 329 amendments into two 
separate provisions:  the abolition of the largest city’s “veto” power, and the total 
disregard of the vote of the largest city against the proposed alternative method 
after the exclusion has occurred.  However, these two portions of the H.B. 329 
amendments are intimately connected and serve a rational objective when 
considered in context. See Fitzgerald v. Racing Assn. of Cent. Iowa (2003), 539 
U.S. 103, 108, 123 S.Ct. 2156, 156 L.Ed.2d 97 (provision held rational when 
legislation “seen as a whole”). 
{¶ 28} Indeed, the present case validates the General Assembly’s rationale 
for countywide consensus.  In each of the years at issue, the exclusion vote 
strongly paralleled the adoption vote.  During those years, the votes reflected the 
will of at least 74 percent of the county’s entire population.  Furthermore, East 
                                                 
3.  In its brief, East Liverpool states that there is a “colorable claim that H.B. 329 should be 
subject to strict scrutiny because it creates a statutory classification which adversely affects the 
fundamental right to vote.”  However, East Liverpool then argues that H.B. 329 fails under the 
rational-basis test.  In this case, the citizens do not vote on a method of apportionment; rather, this 
case involves the citizens’ generalized interest in receiving the benefits of government funds.  
Therefore, the rational-basis test is appropriate in this context.  See San Antonio Indep. School 
Dist. v. Rodriguez (1973), 411 U.S. 1, 40, 93 S.Ct. 1278, 36 L.Ed.2d 16; accord Cincinnati City 
School Dist. Bd. of Edn. v. Walter (1979), 58 Ohio St.2d 368, 375-376, 12 O.O.3d 327, 390 N.E. 
813.   
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Liverpool cannot complain of unfairness in the substance of the distribution 
formula, for it receives a share of the funds proportionate to its share of the 
county’s population and is thereby treated equally with other subdivisions. 
{¶ 29} Finally, it is significant that H.B. 329 requires annual approval if a 
county adopts an alternative method over the largest city’s objections.  R.C. 
5747.53(C) and 5747.63(C).  As a result, the largest city has the opportunity each 
year to enter meaningful discussions with other subdivisions and thereby 
participate in developing an alternative method of apportionment agreeable to 
other subdivisions. 
{¶ 30} East Liverpool’s facial challenge to H.B. 329 cannot succeed 
unless it “establish[es] that there exists no set of circumstances under which the 
statute would be valid.”  Harrold v. Collier, 107 Ohio St.3d 44, 2005-Ohio-5334, 
836 N.E.2d 1165, ¶ 37, citing United States v. Salerno (1987), 481 U.S. 739, 745, 
107 S.Ct. 2095, 95 L.Ed.2d 697.  We have determined that the statute may be 
rationally and constitutionally applied in this case; therefore, we deny East 
Liverpool’s facial challenge. 
H.B. 329 Has No Unconstitutionally Retroactive Effect. 
{¶ 31} Section 28, Article II of the Ohio Constitution mandates that the 
General Assembly shall possess “no power to pass retroactive laws.”  East 
Liverpool asserts that H.B. 329 violates this provision, but this claim fails because 
the statute has no retroactive effect in this case.  We have held that when the 
application of a statute to the case before us involves only a prospective operation, 
we will not entertain a retroactivity claim under Section 28, Article II.  State v. 
Hawkins (1999), 87 Ohio St.3d 311, 314, 720 N.E.2d 521.  That doctrine bars 
East Liverpool’s retroactivity claim. 
{¶ 32} East Liverpool relies on an uncodified section of H.B. 329 that 
permitted application of the H.B. 329 amendments to the 2003 distribution year.  
Even if we assume that this legislation constituted retroactivity for constitutional 
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11 
purposes, that distribution year is not before us.  We address only years 2004, 
2005, and 2006 in this appeal.  Thus, the statute operates only prospectively in 
this case. 
{¶ 33} East Liverpool also contends that the statute “permitted the 
retrospective extinguishment of East Liverpool’s * * * preexisting legal right 
under former R.C. 5747.53 and 5747.63 to vote to repeal the preexisting alternate 
formula and to participate in the vote of political subdivisions to approve an 
alternate formula.”  However, no one has a vested right in having the law remain 
the same over time.  If by “rely[ing] on existing law in arranging his affairs, [a 
citizen] were made secure against any change in legal rules, the whole body of 
our law would be ossified forever.”  State ex rel. Horvath v. State Teachers 
Retirement Bd. (1998), 83 Ohio St.3d 67, 72, 697 N.E.2d 644, citing Fuller, The 
Morality of Law (1964) 60.  We distinguish vested “rights” from a mere 
“privilege” conferred by statute “which could be exercised so long as the statute 
remained in effect.”  State ex rel. Core v. Green (1953), 160 Ohio St. 175, 181, 51 
O.O. 442, 115 N.E.2d 157.  East Liverpool’s former controlling vote on 
alternative apportionment in Columbiana County was a privilege that the 
legislature validly modified through the enactment of H.B. 329. 
{¶ 34} For these reasons, we reject the retroactivity claim. 
Conclusion 
{¶ 35} Because we hold that the H.B. 329 amendments do not facially 
violate the federal or state constitutions, we affirm the decision of the BTA. 
Decision affirmed. 
 
O’CONNOR, O’DONNELL, LANZINGER and CUPP, JJ., concur. 
 
PFEIFER, J., concurs in judgment only. 
 
MOYER, C.J., dissents. 
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Vorys, Sater, Seymour & Pease L.L.P., John Kulewicz, and John 
Varanese, for appellant. 
 
Roetzel & Andress and Stephen W. Funk, for appellees Columbiana 
County, Butler Township, Center Township, Elkrun Township, Fairfield 
Township, Franklin Township, Hanover Township, Knox Township, Liverpool 
Township, Madison Township, Middleton Township, Perry Township, Salem 
Township, St. Clair Township, Unity Township, Washington Township, Wayne 
Township, West Township, Yellow Creek Township. 
 
Robert L. Herron, Columbiana County Prosecuting Attorney, Andrew A. 
Beech, Assistant Prosecuting Attorney, for appellee Columbiana County Budget 
Commission. 
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