Court Opinion

ID: 3841635
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:10:56.963233+00
Date Added: 2024-06-11T07:40:37.478905
License: Public Domain

The constitution of this state, by article XI, section 7, provides:
"The legislative assembly shall not lend the credit of the state nor in any manner create any debt or liabilities which shall singly or in the aggregate with previous debts or liabilities exceed the sum of $50,000, * * *"
except in certain cases not material here.
The acts of the legislature now under consideration purport to authorize the state to borrow large sums of money in excess of the constitutional limitation and to undertake their repayment from a fund to be later created and to be known as the "State Unemployment Relief Fund", which is to consist wholly of future profits expected to be realized by the state from its conduct of the liquor traffic. The amount appropriated for the relief purposes specified in the act is three million dollars. The moneys so appropriated are not now in existence but are to be realized wholly in the future from the profits of the business. Under the provisions of these acts, none of the moneys to be borrowed are to be used to enable the state to engage in the business and no part of the expected profits will be derived from the use of the borrowed money. The state is already engaged in the traffic and has furnished money from its own funds for that purpose. In other words, the incurring of the debt will neither add to nor decrease the amount of the profits which the state will realize from such traffic since the state is already engaged in the business and all past and future expenses of such business either have been or will be paid by the state from other state funds.
It is obvious, therefore, that these anticipated profits, when obtained, will be as much the property *Page 195 
of the state as any other of its future state revenues, whether such state revenues are derived from taxation or otherwise. The debt, therefore, will not be created for the purpose of earning revenue for the state, or of increasing the revenue of the state, for those revenues will be earned whether the money is borrowed or not. When the debts are incurred, they will be paid wholly and alone with moneys belonging to the state and this is true whether the debt is paid from the general fund or from a special fund created for that purpose.
The inhibition of the constitution is not against the appropriation of three million dollars but is against the incurring of the debt. Had the legislature appropriated that much money for the purposes stated in the act and had provided that it should be expended only when and as earned and had not authorized the incurring of the debt, the objection now urged against the act would have been obviated. But such is not the case. The money is to be first borrowed, then expended in relief work, and later is to be repaid by the state from moneys belonging to the state but out of a particular fund created by the state and consisting wholly of state money.
Under such circumstances, the fact that the debt is not to be paid from the general fund but is to be paid from a special fund is of no importance, unless we are to attach to the words "special fund" some magical effect which they do not possess.
If this act is constitutional, then it is within the power of the legislature to authorize the borrowing of any amount of money in excess of the constitutional limitation by merely providing that some part of the future revenues of the state, when received, shall be *Page 196 
set apart in a special fund from which the debt shall be paid and also providing that the same shall be paid from the special fund and not from the general fund. Such a doctrine will mean the entire abolition of all constitutional provisions restricting the borrowing of money by the state.
For these reasons, I am compelled to dissent from the majority opinion of the court. *Page 197