Opinion ID: 1796127
Heading Depth: 1
Heading Rank: 2

Heading: Effect of Daniel on Waters I

Text: Before we can address the issue of res judicata, it is imperative that we address the effect of Daniel on Waters I . As the appellees' counsel has agreed, the case rises or falls on whether Daniel overrules Waters I . Therefore, this court must determine precisely what Daniel held. In Daniel, 332 Ark. 489, 966 S.W.2d 226, the court concluded that the sales tax in White County was an illegal exaction because the ballot failed to disclose all the purposes to which the tax revenues were assigned. In addressing the argument that the voters should have known, ostensibly from statutory law, that the cities would be receiving their share of the taxes, the Daniel court examined Waters I , where the court had upheld the imposition of the use tax on the grounds that the General Assembly has the inherent authority to impose a tax and that there is no fundamental right of the citizens to vote on that issue. The Daniel court rejected the broad application of the holding in Waters I , by stating that where the General Assembly has established the right of the voters to approve the imposition of a tax, any consideration of the legislature's general power to tax is secondary to the voters' right to full disclosure of the nature of the tax and its proposed purposes. Id. at 502, 966 S.W.2d 226. Thus, where the General Assembly delegates its taxing authority to the counties and cities, fully informed voters in the affected areas are entitled to make the ultimate decision. The General Assembly has the inherent authority to either impose a tax directly or to delegate imposition of a tax, and where delegated, the voters' rights are paramount. Daniel did not, and could not, overrule the General Assembly's inherent authority to impose a tax directly. Finally, nothing in the law prohibits tying the imposition of a tax directly by the General Assembly to an existing tax that was delegated and approved by the affected voters. [1] That analysis of Waters I in Daniel was limited to the facts in Daniel . Like the tax found to be an illegal exaction in Ragan v. Venhaus, 289 Ark. 266, 711 S.W.2d 467, the illegal expenditure in Daniel was authorized by the General Assembly but imposed by the county government without a vote by the affected citizens. In neither case was the tax nor the purposes for the tax, respectively, fully disclosed to the voters through the ballot. In other words, to the extent that Waters I allowed county governments to impose a tax without an informed vote, even when authorized by the General Assembly, any tax so collected is an illegal exaction. We reaffirm the holding in Daniel , that when a ballot title states that specific funds will be spent in a certain way, the money must then be spent in that manner. See also Western Foods, Inc. v. Weiss, 338 Ark. 140, 992 S.W.2d 100 (1999); Maas v. City of Mountain Home, 338 Ark. 202, 992 S.W.2d 105 (1999). Waters I does hold that Act 31 is a valid exercise of legislative authority, and Act 31 was never at issue in Daniel .