Opinion ID: 1206449
Heading Depth: 1
Heading Rank: 11

Heading: the restricted excise-tax-concept

Text: I would say, with some emphasis, that I recognize the dangers inherent in using excise taxes to secure the payment of revenue bonds for public improvements. It would be, and has effectively been, argued that every time a public improvement is needed which would otherwise create a debt in excess of taxes for the current year, the legislature need only pass an excise tax to fund a revenue-bond-borrowing scheme, thereby obviating the need for a vote of the people. This  goes the argument  defeats the protection of such constitutional safeguards as contained in the Article 16 provisions. But this objection can be avoided by a restricted and accurate utilization of the special-fund doctrine. The evil which so many fear appears only when we ignore the traditional special-fund requirement of relating the purpose of the tax to the thing taxed. A rule contemplating this philosophy should have evolved from this case to the benefit of those who, in the future, have problems related to and solvable by the thing to be taxed  all according to the careful discretion of the legislature. The special-fund doctrine  whether it contemplates funding exclusively from the facility ( Laverents )  from the constitutionally authorized source ( Arnold ; and the gasoline tax in Banner )  or the coal tax of this case  could and should be put to do the people's work and made to answer their requirements in those situations where the thing to be taxed gives rise to or is in close relationship with the need for excise taxation. The suggested holding in this case would, therefore, say that new limited excise taxes, imposed upon those taxpayers creating the problem sought to be solved, may be committed to a special fund to be used for the payment of debts incurred to solve those problems, without constituting a debt in the constitutional sense. This would preclude the use of excise tax moneys to secure the bond issued for the financing of projects which are unrelated to the source of the tax. It would  in fact  have precluded the use of cigarette tax money to fund storm sewer bonds ( Banner ), but would have allowed the use of the gasoline tax in Banner because of its direct relation to the street and storm sewer facility. Such a concept would, of course, restrict the related excise tax special fund in a way which would be consistent with the debt concepts of Laverents. That is  the contract between the entity issuing its bonds and the bondholders would have to clearly provide that liability was limited to the fund created by the tax deposits, thereby precluding the exposure of the general credit of the State or political subdivision. In this case, we have a promise that a new coal tax and a portion of an additional mineral severance tax will be directly or contingently available for the payment of Authority bondholders. Neither of these commitments falls within the parameters of constitutional debt  as defined by this court in Laverents. (See Note 4) Here, the State has specifically rejected any and all obligations to in any manner be responsible for the Authority's indebtedness. The only promise is that the State will continue the taxes and deposit the income according to statutory agreement with the bondholders as long as there are bonds outstanding and the source of the tax available. The bondholders' sole remedy (in case of default) is an action against the special funds created thereby, and they have no call upon the general credit of the State of Wyoming. The State makes no promise that it will make up any deficits out of the State's existing general resources, and there is no promise that the State will levy a general tax, property or excise, to make up such deficits. In fact  any such possibility is specifically rejected when, on the face of the bond, the potential bond purchaser is noticed that the State will not be liable in any way under the bond contract. We have before us a commitment of only a limited, as opposed to a generally levied, excise tax. These taxes are levied only on mineral producers  who are the major source of impact problems. They are specific, limited excise taxes, levied for a specific purpose which is directly related to the objects of that taxation. We are not asked in this case to review the propriety of an obligation which commits general excise tax moneys  those levied on the public in general, such as sales, use, inheritance and cigarette taxes  totally unrelated to projects contemplated and existing as a revenue source for the State prior to the initiating legislation. We said in Stephenson v. Mitchell, Wyo., 569 P.2d 95, 97: ... [I]t is well settled that statutes are presumed to be constitutional unless affirmatively shown to be otherwise, and one who would deny the constitutionality of a statute has a heavy burden. The alleged unconstitutionality must be clearly and exactly shown beyond any reasonable doubt. Budd v. Bishop, Wyo. 1975, 543 P.2d 368; State v. Stern, Wyo. 1974, 526 P.2d 344; Johnson v. Schrader, Wyo. 1973, 507 P.2d 814; Constitutional Law, West's Wyoming Digest... . The State Constitution is a limitation, not a grant, of power, and, as a result, the legislature possesses all legislative authority except as restricted by the State Constitution, either expressly or by clear implication. State v. Snyder, 29 Wyo. 199, 212 P. 771; and 16 C.J.S. Constitutional Law § 70. Restrictions upon the use of excise tax moneys are not clearly implied by the language of Article 16, § 2, and there are certainly reasonable doubts as to the unconstitutionality of the statutes here considered, especially since we have this court's unrejected case authority ( Banner ) holding that excise taxes may be used for special-fund financing. I would say then  in summary  that the history of Article 16 provisions discloses that the constitutional framers were principally concerned with the protection of the general public, and particularly their property, from onerous financial obligations. We broadly embraced that principle in Banner and in Laverents. The use of excise taxes can be justified, within the debt-limitation framework, by reference to the above-mentioned historical setting or by an analysis of the intended parameters of the concept of debt. There are solid foundations from which the use of limited, new or additional excise taxes  levied for a specific and related purpose  can be justified. In my judgment, the majority commits grievous error  seriously hampering the ability of this State to cope with immediate social and economic problems  by failing to do so in this case. I would have held the act constitutional. I do not address other reserved questions as a dissenting Justice because the constitutional debt-limitation problem seems to be the most important issue and the only one which, under the majority opinion, actually prevents the Authority from functioning as it was statutorily intended to do.