Board of Trustees of Policemen's and Firemen's Retirement Fund of City of Paducah v. City of Paducah

• Decision Date: 18 March 1960
• Citation: 333 S.W.2d 515
• Parties: BOARD OF TRUSTEES OF POLICEMEN'S & FIREMEN'S RETIREMENT FUND OF CITY OF PADUCAH, Kentucky, et al., Appellants, v. CITY OF PADUCAH, Kentucky, Appellee.
• Court: United States State Supreme Court — District of Kentucky

Page 515

333 S.W.2d 515

BOARD OF TRUSTEES OF POLICEMEN'S & FIREMEN'S RETIREMENT FUND OF CITY OF PADUCAH, Kentucky, et al., Appellants, v. CITY OF PADUCAH, Kentucky, Appellee.

Court of Appeals of Kentucky.

March 18, 1960.

Reed & Hines, Joseph S. Freeland, Paducah, for appellants.

H. Warren Middleton, Earle T. Shoup, Paducah, for appellee.

Wilson & Wilson, Owensboro, amicus curiae.

CULLEN, Commissioner.

The appeal is from a judgment holding unconstitutional an Act of the 1956 General Assembly (1956, c. 16; KRS 95.851 to 95.885) establishing a new form of retirement and pension system for the police and fire departments of cities of the second class. The Act is mandatory as to those second-class cities which prior to 1956 had established pension systems for police and firemen under former statutes (the appellee City of Paducah is in this category), and is optional as to other second-class cities. The Act requires the city to make contributions to the pension fund, upon an actuarially determined basis, out of the general fund of the city, and it is this provision that raises the question of constitutionality.

The opinion of the lower court was that the part of the Act relating to the police department, if standing alone, would not be unconstitutional, but that the part relating to the fire department was unconstitutional, and that the two parts could not be severed, so that the entire Act must be held invalid.

The holding that the Act was invalid as to the fire department was based upon City of Lexington v. Thompson, 113 Ky. 540, 68 S.W. 477, 57 L.R.A. 775; McDonald v. City of Louisville, 113 Ky. 425, 68 S.W. 413; and Campbell v. Board of Trustees, 235 Ky. 383, 31 S.W.2d 620. In the Thompson case (decided in 1902) the Court, in holding void an Act of the General Assembly fixing the compensation of members of the fire departments of second-class cities, adopted Judge Cooley's theory (as expressed in People ex rel. Board of Park Com'rs v. Common Council of Detroit, 28 Mich. 228, 15 Am.Rep. 202, and People ex rel. LeRoy v. Hurlbut, 24 Mich. 44, 9 Am.Rep. 103) that municipalities have the inherent right of self-government, free of state interference, in matters of purely local concern. In the McDonald case (also decided in 1902), the Court held invalid a legislative Act requiring cities of the first class to levy a tax to create a fund for pensioning firemen, basing its decision not only on Judge Cooley's theory but upon the view that Section 181 of the Kentucky Constitution, which provides in part that the General Assembly 'shall not impose taxes for the purposes of any county city, town or other municipal corporation,' prohibited the General Assembly from requiring a city to levy a tax for local purposes. The Court held that the maintenance of a city fire department was a matter of purely local or 'private' concern, within Cooley's theory, and was for a purely local purpose within the meaning of Section 181. In 1930, in the Campbell case, the Court again held unconstitutional a legislative Act requiring cities of the first class to levy a tax to create a firemen's pension fund. The Court raised some question as to the soundness of Cooley's theory and of the Thompson opinion, but decided to adhere to the view expressed in the McDonald case that the maintenance of a fire department was strictly a municipal purpose, and that under Section 181 the legislature could not require a city to levy a tax for that purpose.

As concerns police departments, the decisions of this Court took a different course. In 1907, in Ex parte City of Paducah, 125 Ky. 510, 101 S.W. 898, the Court upheld an Act fixing the number of policemen in cities of the second class. The opinion, after stating that the broad power conferred upon the General Assembly by Section 156 of the Constitution to define and provide for the organization and powers of cities has no limitation other than in 'principles announced by the courts' that the legislative power does not extend to functions performed by cities 'merely for the convenience and benefit of the inhabitants', proceeded to give lip service to Cooley's theory and the decision in the Thompson case, but then held that by reason of the general public concern with the preservation of peace and the protection of life and property, city police systems form a part of the state government and therefore are subject to legislative control. And in 1928, in Board of Trustees of Policemen's Pension Fund v. Schupp, 223 Ky. 269, 3 S.W.2d 606, the Court held valid a legislative Act which required that any city of the first class which previously had elected to establish a policemen's pension system, under permissive legislation, must pay increased benefits. While the opinion made reference to the Thompson case, and distinguished it the same as was done in Ex parte City of Paducah, the Court called attention to the fact that the rule expressed in the Thompson case had often been questioned and there were many decisions of other courts to the contrary, and the Court had this to say about Cooley's theory (3 S.W.2d 609):

'The theory that the right of local self-government inheres in the municipalities of this state is essentially unsound, and is based upon the now discarded doctrine that the Constitution of this state is a grant or delegation of power by the people of the state to the state government, and is not, as is now generally recognized, a limitation upon a power which, merely by virtue of its sovereignty, would otherwise be absolute. * * *'

As concerns Section 181 of the Constitution, the Schupp case again held, as in Ex parte City of Paducah, that the maintenance of a city police force is not a matter of purely municipal concern or purpose, but is a matter of general public concern. The Court said (3 S.W.2d 609):

'* * * the general public is interested in the maintenance of order in all municipalities of the commonwealth, and the General Assembly may by general laws, require municipal corporations to take such steps and to impose such taxes as will provide for the maintenance of order. * * *'

In the foregoing discussion, it has been made evident that there are two grounds of attack upon the constitutionality of the Act now in question, as it relates to firemen. One is that the Act infringes an inherent right of local self-government, and the other is that it violates Section 181 of the Constitution. We will first consider ground No. 1.

As hereinbefore pointed out, the validity of the theory of an inherent right of local self-government was severely questioned in Campbell v. Board of Trustees, 235 Ky. 383, 31 S.W.2d 620, and Board of Trustees of Policemen's Pension Fund v. Schupp, 223 Ky. 269, 3 S.W.2d 606. In the Schupp case, and in Warley v. Board of Park Commissioners, 233 Ky. 688, 26 S.W.2d 554, 555, the Court said that 'it is now established that the theory * * * is essentially unsound.'

In Callis v. Brown, 283 Ky. 759, 142 S.W.2d 675, at page 678, it was said:

'The general rule is that in the absence of a constitutional provision safeguarding it to them, municipalities have no right to self-government which is beyond the legislative control of the state. * * *'

In Allen v. Hollingsworth, 246 Ky. 812, 56 S.W.2d 530, at page 531, this statement was made:

'Apart from restraints of the organic law, the Legislature has plenary powers in respect to the establishment and regulation of the government of municipalities, and such divisions of government possess only those powers that the state, through the Legislature, has conferred upon them, expressly or impliedly, and those granted powers may be enlarged or diminished in the discretion of the superior body, for the municipalities are derivative creations. * * *'

In Klein v. City of Louisville, 224 Ky. 624, 6 S.W.2d 1104, 1106, the Court said that Section 156 of the Constitution gives the General Assembly the power to define and provide both for governmental functions of cities and for 'quasi private municipal functions.'

See also Adams v. Burke, 308 Ky. 722, 215 S.W.2d 531; Covington Bridge Commission v. City of Covington, 257 Ky. 813, 79 S.W.2d 216; Bosworth v. City of Lexington, 277 Ky. 90, 125 S.W.2d 995; and George v. City of Raceland, 279 Ky. 316, 130 S.W.2d 825.

In 37 Am.Jur., Municipal Corporations, sec. 77, pp. 690 to 692, it is stated that most jurisdictions have discarded the theory of an inherent right of local self-government, and hold that such right exists only to the extent conferred or recognized by express constitutional provisions or to the extent necessary to protect against the taking of property held in a private or proprietary capacity.

We have concluded that the time has come for this Court to reject, positively and unequivocally, the theory that a right of local self-government inheres in Kentucky municipalities. We now do so, and we overrule City of Lexington v. Thompson, 113 Ky. 540, 68 S.W. 477, 57 L.R.A. 775, and McDonald v. City of Louisville, 113 Ky. 425, 68 S.W. 413, and the cases that have followed them, to the extent that they have recognized the now rejected theory.

This brings us to a consideration of Section 181 of the Constitution, the introductory phrase of which is: 'The General Assembly shall not impose taxes for the purposes of any county, city, town or other municipal corporation * * *.' As previously indicated, this phrase has been construed to mean that the General Assembly cannot require a city to impose a city tax for strictly local purposes, but can require a city to impose a city tax for purposes of general public or state-wide concern. Whether this is the proper construction of the constitutional provision is a question about which we will have something to say at a later point in this opinion, but for the purposes of the decision of the particular issue in this case we may treat it as being the proper construction. We also will treat the constitutional provision as prohibiting not...