Why won't the Arkansas AG approve a constitutional amendment requiring voter approval for any tax, fine, or fee increase?

Plain-English summary

David Dinwiddie of Pine Bluff submitted to the AG a proposed Arkansas constitutional amendment requiring direct voter approval for the creation or increase of "any tax, fine or fee," with abolitions and decreases allowed by either legislative process or voter approval.

AG Dustin McDaniel rejected the proposal under A.C.A. § 7-9-107(c), instructing Dinwiddie to "redesign" it. The rejection was not on the merits; the AG repeated three times that he takes no position on the policy. The problem was drafting clarity.

A page of the opinion is a checklist of ambiguities. Among them: the proposal did not say whether it covered fees by private parties or only government bodies, did not address improvement district assessments (sometimes "taxes" and sometimes not), did not handle ticket prices charged by public bodies like Pulaski County's Multipurpose Civic Center Facilities Board (owner of Verizon Arena), did not specify which voters had to approve a given charge (residents, taxpayers, users), did not specify the majority required, did not clarify whether the legislature could later amend a voter-approved tax (which Amendment 7 currently allows by two-thirds vote), and did not address Ark. Const. art. 5, § 38's emergency-tax provision or the Contracts Clause as it bears on bond covenants.

Without these clarifications, the AG could not summarize the proposal honestly in a ballot title.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What did the proposed amendment say?
A: "No tax, fine or fee may be created or increased without direct approval of the voters in a general or special election; however, taxes, fines and fees may be abolished or decreased by either legislative process or approval of the voters in a general or special election."

Q: Why did the AG reject it?
A: A series of drafting ambiguities. The biggest were scope (which charges count, and whose), procedure (who votes, by what majority, who pays for the election), and interaction with existing law (Amendment 7 already lets two-thirds of the legislature amend a voter-approved measure, and Article 5, § 38 allows emergency tax increases by three-fourths vote). A ballot title must "convey an intelligible idea of the scope and significance" of the change. Without resolved ambiguity, the AG said he could not write one.

Q: Would Verizon Arena ticket prices have been a "tax, fine or fee" under the proposal?
A: Unclear, which was the AG's point. The Pulaski County Multipurpose Civic Center Facilities Board owns and operates Verizon Arena. Its ticket prices could plausibly be called fees. As written, the amendment would arguably require a new election every time a new event was scheduled, which the AG said "probably would make such operations impossible in practical terms."

Q: What about improvement district assessments?
A: Also unclear. Rainwater v. Haynes, 244 Ark. 1191 (1968), distinguishes "taxes" from "special assessments" in the strict legal sense. But improvement district assessments are also commonly called "taxes" (Vimy Ridge Mun. Improvement Dist. No. 139 v. Ryles, 373 Ark. 366 (2008)). The proposal did not say which usage controlled.

Q: Could the legislature still amend a voter-approved tax under the proposal?
A: Unclear. Amendment 7 currently allows the General Assembly or a city council to amend or repeal an initiated measure by two-thirds vote. The proposal did not say whether it intended to repeal that part of Amendment 7 as applied to tax increases.

Q: What is the AG's role in reviewing ballot titles?
A: A.C.A. § 7-9-107 requires the AG to certify the popular name and ballot title before sponsors can circulate petitions. The AG can substitute a more suitable name and title, or reject the whole petition if the title is too misleading or the proposal too ambiguous to summarize. He cannot consider the policy merits. He takes no position on whether the underlying idea is wise.

Q: Can the sponsor try again?
A: Yes. A.C.A. § 7-9-107(c) requires the AG to instruct the sponsor to "redesign" the measure on rejection. The sponsor can resubmit as many revised versions as it wants until the AG either certifies or runs out of objections.

Background and statutory framework

Direct voter approval for tax increases is a recurring topic in Arkansas ballot proposals. Many states have variants of the idea, often called "taxpayer bill of rights" or TABOR-style measures. The Dinwiddie proposal was on the broad end of the spectrum because it applied not just to "taxes" but also to "fines" and "fees," and applied to creation as well as increase.

The legal framework for AG review is A.C.A. § 7-9-107. The Arkansas Supreme Court has developed a substantial body of case law on what makes a ballot title sufficient: an impartial summary giving the voter a fair understanding, inclusion of any "essential fact" that would give the voter "serious ground for reflection" (Bailey v. McCuen, 318 Ark. 277 (1994)), brevity that fits within the five-minute booth limit in A.C.A. § 7-5-522, no misleading tendency by amplification or omission, and an "intelligible idea of the scope and significance of a proposed change in the law." Roberts v. Priest, 341 Ark. 813 (2000), added that internal inconsistencies in the proposed amendment itself can be a basis for rejection because they make a clear ballot title impossible.

Several constitutional and statutory provisions form the legal backdrop for a tax-approval amendment. Amendment 7 governs initiative and referendum and contains the legislature's existing authority to amend voter-approved measures by two-thirds vote. Article 5, § 38 of the Arkansas Constitution allows the General Assembly to approve an emergency tax rate increase by three-fourths vote. Article 2, § 17 (state) and Article I, § 10 (federal) prohibit impairment of contracts and bear on bond covenants that promise minimum tax revenues. Many existing taxes are authorized but not yet levied (local sales and use taxes, county and city income taxes, school maintenance taxes, library and hospital millages). The proposal did not say whether levying an already-authorized tax counts as "creation" of a tax.

The AG also flagged a basic style point: the proposal capitalized "Tax," "Fine," and "Fee" without defining them. In legal writing, capitalized initial letters typically signal defined terms or terms of art. Without a definition, the capitalization was itself ambiguous.

The opinion ended with the standard A.C.A. § 7-9-107(c) redesign instruction. The AG also reminded Dinwiddie that "I am not your counsel in this matter and cannot advise you as to the substance of your proposal."

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS
THE ATTORNEY GENERAL
DUSTIN McDANIEL
Opinion No. 2014-003
January 28, 2014

David E. Dinwiddie
8608 Princeton Pike
Pine Bluff, Arkansas 71602

Dear Mr. Dinwiddie:

This is in response to your request for certification, pursuant to A.C.A. § 7-9-107 (Repl. 2013), of the following popular name and ballot title for a proposed constitutional amendment:

Popular Name: PROPOSED CONSTITUTIONAL AMENDMENT TO REQUIRE VOTER APPROVAL OF THE CREATION OR INCREASE OF ANY TAX, FINE OR FEE

Ballot Title: No tax, fine or fee may be created or increased without direct approval of the voters in a general or special election; however, taxes, fines and fees may be abolished or decreased by either legislative process or approval of the voters in a general or special election.

The Attorney General is required, pursuant to A.C.A. § 7-9-107, to certify the popular name and ballot title of all proposed initiative and referendum acts or amendments before the petitions are circulated for signature. The law provides that the Attorney General may substitute and certify a more suitable and correct popular name and ballot title, if he can do so, or if the proposed popular name and ballot title are sufficiently misleading, may reject the entire petition. Neither certification nor rejection of a popular name and ballot title reflects my view of the merits of the proposal. This Office has been given no authority to consider the merits of any measure.

Having analyzed your proposed amendment, as well as your proposed popular name and ballot title under the above precepts, it is my conclusion that I must reject your proposed popular name and ballot title due to ambiguities in the text of your proposed measure. A number of additions or changes to your ballot title are, in my view, necessary in order to more fully and correctly summarize your proposal. I cannot, however, at this time, fairly or completely summarize the effect of your proposed measure to the electorate in a popular name or ballot title without the resolution of the ambiguities. I am therefore unable to substitute and certify a more suitable and correct popular name and ballot title pursuant to A.C.A. § 7-9-107(b).

I note as a preliminary matter that your proposed ballot title makes no attempt to describe how the proposal will change current law. A person reading the proposed ballot title would not necessarily, for example, be aware that the law already provides that some taxes and tax increases must be the subject of elections. As stated above, a ballot title must convey an intelligible idea of the scope and significance of a proposed change in the law, and it cannot do so without providing relevant context about the current state of the law. Any resubmission must take this rule into account.

I refer to the following ambiguities:

• While your proposed ballot title indicates that your proposal applies to charges "by a state or local government body in Arkansas," the text of your proposal does not make clear its scope with respect to the bodies, state, local, governmental, quasi-governmental, whose charges will be subject to the proposal. Additionally, private bodies and individuals commonly charge "fees," and there is no indication that your proposal is not intended to apply to such persons' fees as well.

• The scope of the phrase "Tax, Fine or Fee" is uncertain and ambiguous. Your proposal does not make clear which charges, if any, are outside the proposal's scope. For example, Rainwater v. Haynes distinguishes "taxes" from improvement district "assessments," but improvement district assessments are also commonly referred to as "taxes." Also consider for example the Pulaski County Multipurpose Civic Center Facilities Board, which owns and operates Verizon Arena in North Little Rock. The Board sells tickets to entertainment and sports events held at the arena. The ticket price could be characterized as a fee, and therefore subject to your proposal. Application of your proposal to the arena's operations probably would make such operations impossible in practical terms. Each event would involve a new "fee" and presumably require a new election. It is not clear whether such application and result are intended.

• Your proposal is ambiguously vague with respect to the group of people whose approval by election is required in some instances. Improvement districts, for example, have boundaries but only owners of real property living within a district's boundaries are liable to pay assessments for improvements. Your proposal does not clearly indicate whether all residents of such a governmental unit or only those persons liable to pay some charge to such a unit may vote to implement or increase such a charge. Also consider for example a fee imposed by a local government for admission to a park it owns. The park is open to all who pay the fee, including those who do not live within the local government's boundaries. Your proposal does not make clear whether the fee could be increased by a vote of those who live within the local government's boundaries, those who live within the state, those who use the park, or some other group.

• Your proposal is ambiguous with respect to the vote needed for approval. Perhaps a bare majority is intended to be sufficient but it is not clear whether the majority would be of registered voters, voters voting on any question at the same election, or voters voting on the tax, fine, or fee question.

• Your proposal is ambiguous with respect to the identities of the parties who may or must call or bear the expense of the various elections the proposal contemplates, and the procedures and limitations of calling and conducting the elections.

• Your proposal is ambiguous with respect to whether its voter approval requirement can be complied with only by way of initiative or referendum under Amendment 7.

• Amendment 7 provides that the General Assembly or a city council may, by two-thirds vote, amend or repeal a measure approved by a vote of the people. Your proposal is ambiguous with respect to whether it is intended to repeal this part of Amendment 7 regarding a legislative body's amending an initiated tax measure by increasing the tax rate.

• Your proposal is ambiguous with respect to its intent, if any, regarding Arkansas Constitution article 5, section 38, and its vitality after your proposal is adopted, particularly with respect to whether your proposal would repeal the provision allowing the General Assembly to approve an emergency tax rate increase by a three-fourths vote.

• Your proposal uses "legislative process" and "approval of the voters" as alternatives with respect to the abolition or decrease of a tax, fine, or fee. The language is ambiguous in that citizens might initiate an act to abolish or decrease a charge, and such a procedure both involves "approval of the voters" and is a "legislative process."

• Your proposal is ambiguous with respect to whether the General Assembly or other legislative body may abolish or reduce a voter-approved tax or tax rate.

• Your use of the word "created" is unclear and may lead to voter confusion without clarification. Many kinds of taxes are currently authorized but not yet levied, such as various statutorily authorized local sales and use taxes, county and city income taxes, taxes for maintenance and operation of schools, and library and hospital millages. It is not clear whether your proposal would prohibit similar authorizing legislation absent an election even though such legislation did not purport to levy a tax. The proposal is similarly ambiguous with respect to whether the new levy of a tax under preexisting authorization would amount to "creation" of the tax.

• Your proposal is ambiguous in failing to clarify its relationship with Arkansas Constitution article 2, section 17, and United States Constitution article I, section 10, regarding impairment of contracts, in particular with respect to whether you intend your proposal to repeal the latter to the extent of bond covenants to maintain some specified minimum tax revenues and the like.

• Your proposal capitalizes the first letter of each of the words "tax," "fine," and "fee." In legal writing, capitalizing words' initial letters commonly indicates that the words are defined elsewhere in the writing, or are legal terms of art. Neither appears to be the case here. The usage is accordingly ambiguous. Your proposal also capitalizes the first letter of the word "however" for no apparent reason, which introduces more uncertainty.

I cannot certify a ballot title for your proposed amendment in the face of the ambiguities noted above. You must remedy these confusing and ambiguous points before I can perform my statutory duty.

My office, in the certification of ballot titles and popular names, does not concern itself with the merits, philosophy, or ideology of proposed measures. I have no constitutional role in the shaping or drafting of such measures. My statutory mandate is embodied only in A.C.A. § 7-9-107 and my duty is to the electorate. I am not your counsel in this matter and cannot advise you as to the substance of your proposal.

My statutory duty, under these circumstances, is to reject your proposed ballot title (for the foregoing reasons) and instruct you to "redesign" the proposed measure and ballot title. You may, after addressing the matters discussed above, resubmit your proposed amendment, along with a proposed popular name and ballot title, at your convenience. I anticipate, as noted above, that some changes or additions to your submitted popular name and ballot title may be necessary. I will be pleased to perform my statutory duties in this regard in a timely manner after resubmission.

Sincerely,
DUSTIN McDANIEL
Attorney General
DM/cyh