Opinion ID: 1392493
Heading Depth: 4
Heading Rank: 3

Heading: The sales and use tax does have a public purpose.

Text: Keane also contends that the proposed tax violates article IX, section 6 of the Alaska Constitution, which provides in part that [n]o tax shall be levied ... except for a public purpose. Keane asserts that the three percent tax violates the public purpose clause because the Incorporators' petition anticipated the generation of fifty percent more revenue than needed to operate the city as well as the establishment of a permanent fund. [20] The LBC responds that (1) the DCRA considered the petitioner's anticipated revenues overly optimistic, and (2) even if a city has excess tax revenues it is not prohibited from establishing a savings account to draw on in less prosperous times. The phrase public purpose cannot be precisely defined; each case must be judged on its own particular facts and circumstances. DeArmond v. Alaska State Dev. Corp., 376 P.2d 717, 721 (Alaska 1962). [I]f the object is beneficial to the inhabitants and directly connected with the local government it will be considered with favor as a ... public purpose. .. . To justify a court in declaring a tax invalid on the ground that it was not imposed for a public purpose, the absence of a public interest must be clear and palpable. 16 Stephen M. Flanagan, McQuillin, Municipal Corporations § 44.35, at 114-15 (3rd ed. 1984). We conclude that establishment of a savings account for future public purposes appears to be a prudent decision with a public purpose.