Opinion ID: 2540016
Heading Depth: 3
Heading Rank: 3

Heading: The Keller Factors Provide an Aid in Distinguishing a User Fee From a Hidden Tax

Text: This Court derives several lessons from the discussions in Keller and Beatty. First, it is axiomatic that the Hancock Amendment is intended to prohibit municipal fee increases that are taxes in everything but name; true user fees simply are not subject to section 22(a). Indeed, Arbor's brief itself recognizes that it would be unworkable to require the voters to determine whether a city snack stand can increase its charges for food when its own food service cost rises, or whether other true user fees can be increased in response to the increased price of gasoline, and agrees that such increases are not and should not be required to be submitted to the voters under section 22(a). But, Arbor says, even if this means utility charges otherwise would be true user fees, they should be treated differently and increases in them be made subject to the Hancock Amendment because the city has a monopoly on utility services. At another point, it suggests that the Keller factors should apply only to a new fee for service, and not for an increase in such a fee. These attempted distinctions fly in the face of Keller and the Hancock Amendment itself. As Keller held, the Hancock Amendment is intended to preclude an increase in taxes, including taxes masquerading as fees, without a public vote. This Court must decide the questions before it based on this law, not on what is argued to be a better policy. Nothing in the text of the amendment or in this Court's prior cases would permit treating as taxes any increase in fees, or at least doing so if a municipality is the sole provider of the services in question, while considering newly imposed fees, at least if those fees are for non-exclusive services, actually to be fees. [5] User fees are not taxes and are not subject to the Hancock Amendment. Second, while the five factors set out in Keller's footnote 10 are those this Court believes are most likely to assist courts in determining the tax versus fee issue, they are not intended to be exhaustive. Keller itself cautioned that the factors are helpful, but that no one criteria is controlling and that evaluating the criteria together can determine whether a charge is closer to a true user fee or a tax. 820 S.W.2d at 304 n. 10. In other words, consideration of the Keller factors is a necessary step, but the purpose of their use is not because an arithmetic score will be determined that decides whether the particular charges in question pass or fail but rather is to assist the courts in determining the ultimate issue of whether the charge is a user fee or a disguised tax. [6] For these reasons, while a court should first consider the five Keller factors and while in most cases they will be dispositive, when the balance is a close one other factors also may need to be considered. In Beatty, that included the fact that any unpaid charges became a lien on the estate, making the charges more in the nature of taxes than fees.