E. Liverpool v. Budget Comm., 2006-1129.
| Decision Date | 08 August 2007 |
| Docket Number | No. 2006-1129.,2006-1129. |
| Parties | CITY OF EAST LIVERPOOL, Appellant, v. COLUMBIANA COUNTY BUDGET COMMISSION et al., Appellees. |
| Court | Ohio Supreme Court |
Vorys, Sater, Seymour & Pease L.L.P., John Kulewicz, and John Varanese, Columbus, for appellant.
Roetzel & Andress and Stephen W. Funk, Akron, for appellees Columbiana County, Butler Township, Center Township, Elkrun Township, Fairfield Township, Franklin Township, Hanover Township, Knox Township, Liverpool Township, Madison Township, Middleton Township, Perry Township, Salem Township, St. Clair Township, Unity Township, Washington Township, Wayne Township, West Township, Yellow Creek Township.
Robert L. Herron, Columbiana County Prosecuting Attorney, Andrew A. Beech, Assistant Prosecuting Attorney, for appellee Columbiana County Budget Commission.
{¶ 1} The city of East Liverpool challenges the constitutionality of 2002 Sub. H.B. No. 329 ("H.B. 329"), which changed the procedures by which certain counties, including Columbiana County, may adopt an "alternative method" of apportioning the county's Undivided Local Government Fund ("ULGF") and the Undivided Local Government Revenue Assistance Fund ("ULGRAF") among the political subdivisions of the county. 149 Ohio Laws, Part IV, 7881.
{¶ 2} Because we hold that the H.B. 329 amendments do not violate the constitutional guarantees of uniformity and equal protection and the prohibition against retroactive legislation, we affirm the decision of the Board of Tax Appeals ("BTA").
{¶ 3} In 2002, the General Assembly passed H.B. 329, which amended R.C. 5747.53 and 5747.63 to allow ULGF and ULGRAF money to be distributed among subdivisions under an alternative apportionment scheme without the approval of the largest municipal corporation in the county. 149 Ohio Laws, Part IV, at 7884, 7887. In Columbiana County, the political subdivisions utilized the H.B. 329 procedures and adopted a new method of apportioning ULGF and the ULGRAF money for the distribution years 2003, 2004, 2005, and 2006.
{¶ 4} East Liverpool challenged the budget commission's August 2002 apportionment of funds for 2003. We upheld the apportionment and affirmed the BTA's decision in E. Liverpool v. Columbiana Cty. Budget Comm., 105 Ohio St.3d 410, 2005-Ohio-2283, 827 N.E.2d 310.
{¶ 5} Thereafter, East Liverpool also appealed from the budget commission's apportionment for the years 2004 through 2006 based on the same alternative formula. The BTA affirmed the apportionment but declined to consider East Liverpool's constitutional claims as beyond the scope of its jurisdiction.
{¶ 6} In this appeal, East Liverpool asserts that H.B. 329 on its face violates the Uniform-Operation and Retroactivity Clauses of the Ohio Constitution and the Equal Protection Clauses of the Ohio and United States Constitutions.
{¶ 7} Beginning with the 2003 distribution year, the results from apportioning ULGF and ULGRAF by the alternative formula in Columbiana County differed significantly from those of preceding years. Under earlier apportionment procedures, East Liverpool had received 26.9 percent of the funds each year pursuant to a 1990 agreement among political subdivisions, even though the city constitutes only about 12 percent of the county's population. See Columbiana Cty. Park Dist. v. Columbiana Cty. Budget Comm. (Dec. 19, 1994), B.T.A. No. 93-D-1174, 1994 WL 1711193.
{¶ 8} Application of H.B. 329 changed that outcome. The new alternative method of apportionment has reduced East Liverpool's share of the local government funds to between five percent and six percent of the ULGF and ULGRAF during each of the distribution years at issue.
{¶ 9} Each year, at least 24 out of the 31 townships and municipalities in Columbiana County, excluding East Liverpool, approved the new method of apportionment. Moreover, those subdivisions represented at least 74 percent of all the county's residents.
{¶ 10} Ohio law mandates that a specified portion of various state taxes be placed in a "local government fund" and a "local government revenue assistance fund." R.C. 5747.03(A)(1) and 5747.61(B). The Tax Commissioner distributes the funds to county treasurers, who credit the funds to the ULGF and the ULGRAF of each county, to be apportioned among the county's political subdivisions. R.C. 5747.50, 5747.501, 5747.51, and 5747.61.
{¶ 11} There are two methods of apportioning these funds: a "statutory" method based on the relative need of each political subdivision, and an "alternative method or formula." R.C. 5747.51, 5747.62, 5747.53, and R.C. 5747.63. Prior to H.B. 329, in order to use the alternative method, the county had to obtain approval of the county commissioners, the legislative body of the most populous (hereinafter "largest") city in the county,1 and a majority of the other political subdivisions in the county. 1991 Am.Sub.H.B. No. 298, 144 Ohio Laws, Part III, 3987, 4474, and 1989 Am.Sub. H.B. No. 111, 143 Ohio Laws, Part II, 2331, 2636-2637. See E. Liverpool v. Columbiana Cty. Budget Comm. (2000), 90 Ohio St.3d 269, 270, 737 N.E.2d 44.
{¶ 12} H.B. 329 changed the law by permitting certain counties to adopt an alternative method of apportionment without the largest city's approval. R.C. 5747.53(C) and 5747.63(C) provide that "two or more participating political subdivisions" that together have the "majority of the [county's] total population" may pass resolutions "to exclude the approval otherwise required" of the county's largest city in order to adopt an alternative method of apportionment. The county commissioners, along with a majority of the legislative authorities in the county "other than" those in the largest city, may then adopt the alternative method.
{¶ 13} Pursuant to these provisions, certain political subdivisions of Columbiana County initially passed resolutions to "exclude the approval" of East Liverpool and then passed resolutions approving a new method of apportionment. In this appeal, East Liverpool's constitutional challenges focus not on its exclusion, but rather on the fact that once excluded, it was not permitted to vote on the adoption of the alternative method. Under H.B. 329, once the other political subdivisions exclude the largest city, that city has no voice in whether the new method is ultimately adopted. East Liverpool argues that this feature of the statute is facially unconstitutional. We conclude that contrary to East Liverpool's contentions, the statute is not unconstitutional on its face.2
{¶ 14} "All laws, of a general nature, shall have a uniform operation throughout the state." Section 26, Article II of the Ohio Constitution. East Liverpool contends that the new procedure for adopting an alternative method of apportionment violates the Uniformity Clause because it is limited to "counties in which [the largest city] has a population of twenty thousand or less and a population that is less than fifteen per cent of the total population of the county." R.C. 5747.53(C) and 5747.63(C). According to East Liverpool, this geographic limitation transforms H.B. 329 into a special law on a general subject matter.
{¶ 15} This argument fails because the Uniformity Clause prohibits arbitrary geographic distinctions, not reasonable measures that have a geographic element or disparate geographic effect. See State ex rel. Zupancic v. Limbach (1991), 58 Ohio St.3d 130, 568 N.E.2d 1206, paragraph one of the syllabus (if statute has disparate geographic results but "achieves a legitimate governmental purpose and operates equally on all persons or entities included within its provisions," it satisfies the Uniformity Clause); Austintown Twp. Bd. of Trustees v. Tracy (1996), 76 Ohio St.3d 353, 357, 667 N.E.2d 1174. Limiting the exclusion provision to certain counties based on population represents a rational balancing of political subdivision interests. In large counties where the largest city contains a high percentage of the county's inhabitants, the approval of the largest city is necessary to adopt an alternative method under current law. Otherwise, several smaller subdivisions that represent only a small fraction of the county's population could determine the method of apportionment. By contrast, the General Assembly could rationally conclude that in a small county in which few of the cities are of similar size, the interests of the largest city should not weigh more heavily than those of other political subdivisions in the county.
{¶ 16} Moreover, a statute may set forth criteria that limit the statute's operation to a few counties so long as "there are no limitations or restrictions that prevent other [geographic areas] from qualifying in the future." Kelleys Island Caddy Shack, Inc. v. Zaino, 96 Ohio St.3d 375, 2002-Ohio-4930, 775 N.E.2d 489, ¶ 17. The population thresholds of H.B. 329 are "open ended," and any county may qualify under those thresholds "given a sufficient change in circumstances." Id. at ¶ 19.
{¶ 17} East Liverpool also argues that even if it is rational to exclude the necessity for the largest city's approval, it is irrational to exclude the largest city from voting on approval of the new method. This argument does not state an objection that is cognizable under the Uniformity Clause because it does not relate to whether H.B. 329 is valid "general" legislation as opposed to improper "special" or "local" legislation. The contention that a county's largest city must have the same opportunity as other subdivisions to participate in adopting an alternative method does not, by itself, involve the kind of limitation that implicates the Uniformity Clause's prohibition against special or local laws.
{¶ 18} At oral argument, counsel for East Liverpool also...
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