Keller v. Marion County Ambulance Dist.

• Citation: 820 S.W.2d 301
• Decision Date: 17 December 1991
• Docket Number: No. 72979,72979
• Parties: George KELLER, et al., Respondents, v. MARION COUNTY AMBULANCE DISTRICT, et al., Appellant.
• Court: United States State Supreme Court of Missouri

Page 301

820 S.W.2d 301

George KELLER, et al., Respondents, v. MARION COUNTY AMBULANCE DISTRICT, et al., Appellant.

No. 72979.

Supreme Court of Missouri En Banc.

Dec. 17, 1991.

Rehearing Denied Jan. 28, 1992.

John Morthland, Hannibal, for appellant.

John E. Bardgett, Charles S. Kramer, St. Louis, for amicus curiae Mo. Assn. of Comm. Jr. Coll. & Jr. Coll. Districts.

Brandon L. Wood, Harry J. Mitchell, Palmyra, for respondents.

BENTON, Judge.

On November 4, 1980, the people of Missouri adopted an amendment, popularly known as the Hancock Amendment, to the Missouri Constitution. ¹ With the passage of this amendment, the people limited the power to raise taxes that they had traditionally given the governments of Missouri. Since that time, the courts of this state have frequently been called upon to clarify the resulting new relationships between the people, the state, and local governments. ² This Court, once again, undertakes this crucial task.

Appellant, Marion County Ambulance District ("the District"), was organized in 1974 in accordance with the Ambulance District Law, §§ 190.005-190.085 RSMo 1986. In 1986, the voters of the District approved, as required by the Hancock Amendment, doubling the property tax rate. At the time the 1986 tax increase passed, the District was in a poor financial condition. By January 1989, this problem had been reversed; the District was in strong financial condition. In January 1989, the District established a new schedule of charges, effective February 1, 1989, for its services. As with the previous charges, these charges were for actual services rendered, rather than a subscriber charge of all consumers in the service area. Most of these charges were increases over the previous charges, and none were submitted to the voters for approval. In addition, according to the circuit court, these increases were not needed to maintain the level of service in the District. Respondents--a group of taxpayers who live in the District--sued as a class claiming that these increases violated Article X, § 22(a) of the Missouri Constitution. The circuit court held that these charges qualified as "fees" as that term is used in § 22(a) and, as such, the increases are invalid. On appeal, the District contends that the circuit court's interpretation of the Hancock Amendment is erroneous. This Court agrees that the circuit court's interpretation is in error. The decision below is reversed, and the case is remanded.

Respondent taxpayers rely on the language of § 22(a) which provides: "Counties and other political subdivisions are hereby prohibited ... from increasing the current levy of an existing tax, license or fees ... without the approval of the required majority of the qualified voters of that ... political subdivision voting thereon." Respondents argue that the term "fees" includes the District's charges described above.

The fundamental purpose of constitutional construction is to give effect to the intent of the voters who adopted the Amendment. Boone County Court v. State, 631 S.W.2d 321, 324 (Mo. banc 1982). Traditional rules of construction dictate looking at words in the context of both the particular provision in which they are located and the entire amendment in which the provision is located. See McDermott v. Nations, 580 S.W.2d 249, 253 (Mo. banc) ("The meaning of a term must be determined from the context in which it is used and from the intention of its draftsmen.") cert. denied, 444 U.S. 901, 100 S.Ct. 213, 62 L.Ed.2d 138, cert. dismissed, 444 U.S. 958, 100 S.Ct. 441, 62 L.Ed.2d 331 (1979).

Context determines meaning. Consider this sentence: The batter flew out. Without knowing context, one cannot determine whether that sentence describes what happened when the cook tripped while carrying a bowl of cake mix, or the final act of a baseball game.

Article X, § 16 of the Missouri Constitution is the introductory and principal clause of the Hancock Amendment. It declares that "property taxes and other local taxes and state taxes and spending" cannot be increased without voter approval in accordance with the Missouri Constitution. Section 16 explicitly declares that the remaining provisions of the Amendment are "implementation" of section 16. Appellant District claims that the "spending" referenced in section 16 is only state spending while respondent taxpayers claim that it refers to both state and local spending. If the respondents were correct, then the terms of section 16 bolster the concept that § 22(a) is designed to place a limit on all revenue increases by local governments.

The remainder of the Amendment, however, supports the appellants' claim that the spending limit applies only to the state. Spending--in the context of total revenue--is mentioned in only four other sections. In two of the four, §§ 19 and 20, only state spending is mentioned. In the other two, §§ 18(d) and 21, local expenditures are relevant only if the state mandates new spending at the local level by either statute or constitutional amendment. See Boone County Court v. State, 631 S.W.2d 321, 326 (Mo. banc 1982) ("This [Hancock] Amendment contains no limit on the level of spending by county or local governments."). Thus, not all revenue increases by local governments are subject to the Hancock Amendment. See Zahner v. City of Perryville, 813 S.W.2d 855 (Mo. banc 1991) (special assessment for street work not subject to Hancock Amendment); Oswald v. City of Blue Springs, 635 S.W.2d 332 (Mo. banc 1982) (utility charges for operation and maintenance of sewer plant not subject to Hancock Amendment). These cases make it clear that there are two types of local revenue increases: those subject to the Hancock Amendment and those not subject to the Amendment.

The question becomes which revenue increases are subject to the Hancock Amendment. "License" and "fees" are mentioned in connection with revenue twice in the Amendment. The first time, in § 17(1), they are mentioned as part of the definition of total state revenue, and as alternatives to "general and special revenues." The second time, in § 22(a), "license" and "fees" are mentioned as alternatives to a "tax" in the list of prohibited increases by localities. ³ The difference between these two sections implies a narrower definition for the term "fees" in § 22(a). If the people of Missouri intended to prohibit localities from increasing any source of revenue without voter approval, a general term like "revenue" or "revenue increase" could have been used. Instead, the people of Missouri characterized "fees" in § 22(a) as an alternative to a "tax." This characterization suggests that what is prohibited are fee increases that are taxes in everything but name. ⁴ What is allowed are fee increases which are "general and special revenues" but not a "tax."

Additional support for this interpretation comes from the language of § 22 which prohibits "levying" or "increasing the current levy of" a "tax, license or fees." In ordinary usage, a tax is levied, but a fee is charged. See Webster's Third New International Dictionary 1301 (Unabr. ed. 1961); see also Black's Law Dictionary 907 (6th ed. 1990). Reading "levy" in this ordinary sense--as a term related to the power of government to impose a tax--it is clear that a "fee" can only be levied if the "fee" is actually a tax. This reading of the term "levy" is consistent with the remainder of § 22, which deals with alterations in the "levy" of various taxes when revenue from the items subject to the Hancock Amendment increases faster than the rate of inflation.

Respondent taxpayers argue that there is no difference between a "true" user fee and a nominal fee that is really a tax. ⁵ Just months ago, this Court restated its traditional distinction between "true" user fees and taxes denominated as fees:

Fees or charges prescribed by law to be paid by certain individuals to public officers for services rendered in connection with a specific purpose ordinarily are not taxes ... unless the object of the requirement is to raise revenue to be paid into the general fund of the government to defray customary governmental expenditures ... rather than compensation of public officers for particular services rendered....

Zahner v. City of Perryville, 813 S.W.2d 855, 859 (Mo. banc. 1991), citing Roberts v. McNary, 636 S.W.2d 332, 336 (Mo. banc. 1982), citing Craig v. City of Macon, 543 S.W.2d 772, 774 (Mo. banc 1976) (omitting citations), citing Leggett v. Missouri State Insurance Company, 342 S.W.2d 833, 875 (Mo. banc 1960).

In addition, the history and logic of the Hancock Amendment leads this Court to reject the contention that all fees--whether user fees or tax-fees--are subject to the Hancock Amendment.

Since the Great Depression, there has been a trend toward special districts or "quasi-governmental organizations." ⁶ While accomplishing noble purposes, each new district necessitates additional taxes for its operation. While some statutes give the people control over the tax rates of some of these organizations, the Hancock Amendment created a constitutional basis to control the tax rates of all these organizations. The Hancock Amendment, in order to keep the public burden of taxation under control, does not prohibit these organizations from shifting the burden to the private users of these services. ⁷ How much to charge users is for those elected to run the organizations. ⁸ If the decisions are unpopular, the directors may be voted out of office. ⁹ The only requirement placed on the directors by the Hancock Amendment is that any increase in taxes must be approved by the voters. ¹⁰

The case of Roberts v. McNary, 636 S.W.2d 332, 336 (Mo. banc 1982), suggests that all revenue increases, including "fee" increases, are subject to the Hancock Amendment. To the extent that this language constitutes the holding of Roberts, it has been overruled by this Court sub silentio in several cases. See Zahner v. City of...