Opinion ID: 1206449
Heading Depth: 1
Heading Rank: 9

Heading: only the use of property taxes creates constitutional debts (coal excise tax)

Text: The contingency authority of Banner does not, however, reach to solve the constitutional-debt issue raised by the coal tax and with which the majority expresses its greatest concern. The coal tax funds, under the facts here, and as authorized by the Community Development Authority Act, are utilized as direct grants to the Highway Commission and the subdivisions issuing bonds for purchase by the Authority. This money becomes a part of the committed security for the loan or bond purchase given and made by the Authority to its borrower or bond-debtor. The question then is  can the State of Wyoming  in the face of Article 16, § 2  exact an excise tax which directly funds and secures the Authority's revenue bonds? In my judgment, Banner v. City of Laramie also settles this issue. In the Banner decision, we felt it necessary to bolster the court's position with respect to the part that excise taxes play within the confines of the special-fund doctrine. To do this, we cited with approval the following: In annotation, 100 A.L.R. 900, 901, it is stated: `Although the cases are not entirely in accord and dissenting opinions have been frequent, it has generally been held that an obligation payable exclusively from a special fund created by the imposition of fees, penalties, or excise taxes, and for the payment of which the general credit of the state or municipality is not pledged and resort may not be had to property taxation, is not a debt within the meaning of constitutional debt limitations.' [Emphasis supplied] Oregon and Florida have constitutional-debt provisions similar to our §§ 2 and 4, with the exception that their provisions refer to a specific amount which may not be exceeded, while ours refer to taxes for the current year. In Oregon, new excise taxes  unrelated to the object of their levy  obtained for a specific purpose, may be credited to a special fund to be used as security for the redemption of certificates of indebtedness ( Moses v. Meier, 148 Or. 185, 35 P.2d 981), even though an unrelated, pre-existing fund may not be utilized for such purposes. Terry v. Multnomah County, 27 Or. App. 15, 554 P.2d 1017. In Florida, any new or pre-existing excise tax source may be used for such purposes. State v. Tampa Sports Authority, Fla., 188 So.2d 795. The purpose in setting forth these constructions of state constitutional debt limitations in the realm of excise taxation is not to suggest that they represent the universally accepted rule, but rather to lend support for the principles embraced by this court in Banner, supra. Therefore  for me  Banner  as applied to this case  stands for these two propositions: 1. Since a sum payable upon a contingency cannot structure a constitutional debt, it follows that the funding of the Authority's bonds with mineral excise taxes which can only be called upon when other sources are inadequate (and which may never be called upon) is not constitutionally prohibited. 2. Since the coal tax is an excise tax assigned to a special fund for the payment of bonds sold to solve the mineral-impact problem, and since the credit of the State of Wyoming is not exposed and, in case of default, the bondholders are required to seek redress solely from the fund  the obligation thereby created is not a debt in the constitutional sense of the word. Banner and Laverents, supra. The conclusion embraced by No. 2 above is more sure-footedly reached with the acceptance of the proposition that Article 16 of the Wyoming Constitution only applies to the use of property  and not excise taxes. Banner, supra. The Banner opinion, incorporating the debt definitions of Laverents (Note 4), made it clear that Article 16 limitations on indebtedness apply only to the use of property taxes. We said: It may be noted that under Article 16, Section 5 of the constitution of Wyoming, the limitation there prescribed is according to the last preceding general assessment. In State ex rel. Capitol Addition Bldg. Comm. v. Connelly, 39 N.M. 312, 46 P.2d 1097, 100 A.L.R. 878, the court said that a debt contemplated by the constitutional limitation was one for the payment of which the general faith and credit of the state or municipality was pledged, and to retire which the levy of a general property tax rather than an excise tax was contemplated, in view of the constitutional provisions limiting the indebtedness to a percentage of the assessed valuation of all property as shown by the last preceding general assessment. This holding was approved in the case of Stone v. City of Hobbs, 54 N.M. 237, 220 P.2d 704, in which case the revolving fund was created out of gasoline taxes collected by the city. The statute providing for this was upheld as valid. The case cites Calerdine v. Freiberg, 129 Ohio St. 453, 195 N.W. 854, 858. 289 P.2d at 928. [Emphasis supplied] The court, in Capitol Addition Bldg. Comm. v. Connelly, supra, further held: Certainly, when the Constitution framers in section 8 limited the amount of any such debt as they had in mind to 1 per centum of the assessed valuation of all property subject to taxation in the state, `as shown by the preceding general assessment,' or when in sections 10 and 12 they enjoined payment of a property tax during the preceding year as a condition of the right to vote, they must have conceived that said assessment bore some relationship to the debt. Could the thought have been other than this, that such assessment roll and the property there listed would be resorted to from year to year by the general taxing power as the source of funds for repayment of the debt so created?... 46 P.2d at 1101. [Emphasis supplied] [5] It should be noted that while Section 5 (and Sections 1 and 3) make reference to property, Section 4 (and Section 2) do not. However, we held in Banner that both Sections 4 and 5 were not violated through the use of excise taxes to secure a special-improvement fund principally financed through facility assessments. This holding is consistent with the rule that constitutional provisions such as these should be read in pari materia. See Powers v. City of Cheyenne, Wyo., 435 P.2d 448; Uhls v. State ex rel. City of Cheyenne, Wyo., 429 P.2d 74; and Laverents, supra.