Board of Ed. of Madison County v. Wagers

• Decision Date: 16 February 1951
• Citation: 239 S.W.2d 48
• Parties: BOARD OF EDUCATION OF MADISON COUNTY et al. v. WAGERS, Sheriff-Tax Collector, et al.
• Court: United States State Supreme Court — District of Kentucky

Page 48

239 S.W.2d 48

BOARD OF EDUCATION OF MADISON COUNTY et al. v. WAGERS, Sheriff-Tax Collector, et al.

Court of Appeals of Kentucky.

Feb. 16, 1951.

Rehearing Denied May 29, 1951.

Clay Shackelford, A. R. Burnam, III, Shackelford & Burnam and George T. Ross, all of Richmond, for appellants.

A. E. Funk, Atty. Gen., John Noland, Richmond, John Y. Brown, Lexington, Rodes K. Myers, Bowling Green, Salem Moody, County Atty., Richmond, for appellees.

CLAY, Commissioner.

This declaratory judgment action questions the authority of the Sheriff of Madison County to retain as compensation for the collection of local school taxes an amount greater than one percent thereof. The Chancellor adjudged the Sheriff was entitled to the statutory allowance of four percent, fixed by KRS 160.500, and denied an injunction sought by appellants to enjoin him from receiving a fee in excess of that amount.

The fundamental question in the case is whether or not the retention by the Sheriff of a fee of four percent of the amount of local school taxes collected (admittedly authorized by KRS 160.500), will be an unconstitutional diversion of school taxes. Appellants' position is that such a sum is greatly in excess of the cost of collecting school taxes in Madison County, and that to permit the Sheriff to use this fund for the general operating expenses of his office will constitute an improper expenditure of school funds in violation of Sections 180 and 184 of the Kentucky Constitution.

The second sentence of Section 180 provides: 'Every act enacted by the General Assembly, and every ordinance and resolution passed by any county, city, town or municipal board or local legislative body, levying a tax, shall specify distinctly the purpose for which said tax is levied, and no tax levied and collected for one purpose shall ever be devoted to another purpose.' (Italics ours.)

The second sentence of Section 184 provides: 'The interest and dividends of said fund, together with any sum which may be produced by taxation or otherwise for purposes of common school education, shall be appropriated to the common schools, and to no other purpose.' (Italics ours.)

Prior to 1920 the cost of collecting school taxes was paid out of the county's general fund. In that year the Legislature authorized the county sheriff to receive a commission for collecting this tax, not to exceed one percent thereof. In upholding this act in Ross, Sheriff, etc. v. County Board of Education, etc., 196 Ky. 366, at page 375, 244 S.W. 793, at page 797, this Court said: 'To require the proceeds of a tax levied and collected under chapter 36, supra, for purposes of common school education, to bear the costs of its collection, is not violative of either section 180 or 184 of the Constitution, as it is not the appropriation of a tax levied for one purpose to another purpose, for the taxes must be collected, and some one must be paid for it.'

In 1946 the statute (now KRS 160.500), was amended to allow the tax collector 'a fee at the rate of four percent for the collection of school taxes.'

We had before us the 1946 amendment in Dickson, Sheriff, et al. v. Jefferson County Board of Education et al., 311 Ky. 781, 225 S.W.2d 672. That case came up from Jefferson County. The pleadings and proof showed that a fee of one percent was amply sufficient 'to cover the costs of collecting the local school tax,' and that to allow the sheriff an additional three percent would amount to an excess of between $50,000 and $60,000 a year. It was proposed that this excess be paid into the general fund of the city. We said, 311 Ky. at page 786, 225 S.W.2d at page 675: 'There is an element of cost involved in the collection of any tax. We think no violence is done to either Section 180 or 184 of the Constitution when a reasonable charge is made against a local school tax for its collection. However, the express mandates of those sections must not be overlooked when a school tax is under consideration, because under them a tax cannot be levied for school purposes and then used for other purposes. Under the facts presented in this case, it is shown that the additional three percent allowed the Sheriff of Jefferson County under the 1946 Act for the collection of the Jefferson County School taxes will result in a diversion of more than $50,000 annually to purposes other than school purposes. This we believe to be in violation of both Sections 180 and 184 of the Constitution.'

The history of our decisions indicates this Court has jealously guarded school funds from diversion, even for laudable purposes. See Halbert v. Sparks, 9 Bush. 259, ...