Can a Florida city amend its charter to cap its own operating expenditures by referendum?

Plain-English summary

The City of Marco Island's charter contained an operating-expenditure limitation, and the city council wanted to know whether it could keep amending that cap. The city attorney posed three questions: whether the original charter limit was valid, whether a 2002 amendment to it was valid, and whether the city could make further amendments by referendum without affecting the existing limitation.

Attorney General Bill McCollum declined to address the first two questions. The Attorney General's office does not opine on the constitutionality of a duly enacted law, charter, or code provision; it must presume such provisions valid until a court rules otherwise. So the opinion answered only the third, more general question: may a Florida city amend its charter to impose operating-expenditure limits at all? The answer was yes. Florida municipalities have broad home rule powers, and section 166.031 lets a city amend any part of its charter (except its boundaries) by referendum. Earlier opinions had approved charter amendments restricting capital spending, utility-revenue transfers, and bond issuance. Because no general law forbids a charter limit on operating expenditures, the AG concluded the city may amend its charter, subject to Chapter 166, to address operating-expenditure limitations. One firm boundary: a charter may not limit the governing body's authority to levy ad valorem or utility-service taxes, which section 195.207 forbids.

Currency note

This opinion was issued in 2010. 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: Why wouldn't the AG say whether Marco Island's existing cap was valid?
A: Because the office does not rule on the constitutionality or validity of an enacted charter provision. That is a job for the courts, and the AG presumes such provisions valid unless and until a court of competent jurisdiction says otherwise. The opinion answered only the general question about the city's authority going forward.

Q: Where does a city get the power to cap its own spending by charter?
A: From home rule. Article VIII, section 2 of the Florida Constitution and section 166.021 give municipalities power to act for municipal purposes unless expressly prohibited, and section 166.031 lets a city amend any part of its charter (except its boundaries) by referendum. A city can use that power to restrict its own exercise of authority.

Q: Are there limits on what a charter cap can reach?
A: Yes. A charter cannot prohibit or limit the governing body's authority to levy ad valorem taxes or utility-service taxes; section 195.207 nullifies any such charter provision. The opinion also distinguished county budgets, where Florida courts have struck local caps because Chapters 129 and 200 set the framework counties must follow; municipal budget statutes are less extensive.

Q: Did the AG distinguish city budgets from county budgets?
A: Yes. Drawing on AGO 2009-12, the opinion noted that the statutes governing municipal budgets are not as detailed as those for counties. Section 166.241 simply requires a municipality to adopt a budget by ordinance or resolution "unless otherwise specified in the respective municipality's charter," which suggests a charter may shape how the budget is adopted.

Background and statutory framework

Florida municipalities operate under broad home rule. Article VIII, section 2(b) of the state constitution lets them "exercise any power for municipal purposes, except when expressly prohibited by law," and section 166.021 codifies that grant. Section 166.031 authorizes charter amendment by referendum as to any part of the charter except the description of boundaries. The AG drew a line of prior opinions showing the breadth of that amendment power: a charter could be amended to require referendum approval for large capital projects (AGO 2009-12), to restrict transfers of utility revenue to the general fund (AGO 82-101), and to require referendum approval for issuing municipal bonds (AGO 90-38). The recurring limit is taxation: a charter may not bar the levy of ad valorem taxes without referendum, and section 195.207 expressly forbids charter limits on ad valorem and utility-service taxes (AGO 86-89).

The opinion also separated municipal budgets from county budgets. In AGO 2001-04 the office had said a county charter could not cap annual operating-budget increases, because Florida courts have struck such local provisions as conflicting with the statutory budget-and-millage framework in Chapters 129 and 200 (Board of County Commissioners of Marion County v. McKeever; Board of County Commissioners of Dade County v. Wilson; Charlotte County Board of County Commissioners v. Taylor). Municipal budgeting under section 166.241 is less prescriptive, requiring adoption by ordinance or resolution "unless otherwise specified in the respective municipality's charter." Given that flexibility and the absence of a general law forbidding it, the AG concluded a city may amend its charter, subject to Chapter 166, to limit operating expenditures.

Citations and references

Constitution and statutes:

• Art. VIII, s. 2, Fla. Const. (municipal establishment, charters, and home rule)
• s. 166.021 and s. 166.031, Fla. Stat. (home rule powers; charter amendment by referendum)
• s. 166.241, Fla. Stat. (adoption of municipal budget)
• s. 195.207, Fla. Stat. (no charter limit on ad valorem or utility-service taxes)

Cases:

• Belk-James, Inc. v. Nuzum, 358 So. 2d 174 (Fla. 1978)
• Board of County Commissioners of Marion County v. McKeever, 436 So. 2d 299 (Fla. 5th DCA 1983)
• Board of County Commissioners of Dade County v. Wilson, 386 So. 2d 556 (Fla. 1980)
• Charlotte County Board of County Commissioners v. Taylor, 650 So. 2d 146 (Fla. 2d DCA 1995)

Subject

Municipal Charter, limitation of expenditures

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/municipal-charter-limitation-of-expenditures
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/1725

Original opinion text

Mr. Alan L. Gabriel

City Attorney

City of Marco Island

200 East Broward Boulevard

Suite 1900

Fort Lauderdale, Florida 33301

RE: MUNICIPALITIES – MUNICIPAL CHARTERS – MUNICIPAL HOME RULE POWERS – amendment of charter to limit expenditures. ss. 166.021 and 166.031, Fla. Stat.

Dear Mr. Gabriel:

On behalf of a majority of the members of the City of Marco Island City Council, you ask the following questions:

1. Was an operating expenditure limitation in the city’s original charter created by special act of the Legislature and approved by referendum, valid and constitutional?

2. If so, was a 2002 amendment to the operating expenditure limitation passed by the city council and approved by referendum valid and constitutional?

3. May the city make additional amendments to the operating expenditure limitation subject to referendum approval without affecting the constitutionality and validity of the existing operating expenditure limitation?

Initially, it should be noted that this office will not comment upon the constitutionality of any duly enacted law, charter or code provision, but must presume that such legislation is valid and constitutional unless and until a court of competent jurisdiction declares otherwise.[1] Accordingly, the following discussion will only address your third question in relation to the city’s ability to impose operating expenditure limitations by amendment of the city charter.

Section 2(a), Article VIII of the Florida Constitution, provides that "[m]unicipalities may be established or abolished and their charters amended pursuant to general or special law." (e.s.) Moreover, municipalities have broad home rule powers granted by Article VIII, section 2(b) of the Florida Constitution to "exercise any power for municipal purposes, except when expressly prohibited by law."[2] The Legislature has stated its intent "to extend to municipalities the exercise of powers for municipal governmental, corporate, or proprietary purposes not expressly prohibited by the constitution, general or special law, or county charter[.]"[3]

In Attorney General Opinion 2009-12, this office was asked whether a city's charter could be amended to require referendum approval for any capital improvement project exceeding $500,000, without conflicting with the city’s home rule powers. The opinion discusses whether a city’s charter may be amended to impose restrictions on the exercise of municipal powers, noting that section 166.031(1), Florida Statutes, authorizes the amendment of a city charter by referendum approval "to any part or to all of said charter except that part describing the boundaries of such municipality." (e.s.) A municipal charter or charter amendment, however, may not prohibit the levy of ad valorem taxes without referendum approval.[4] The opinion concludes, absent a general law relating to the expenditure of municipal funds for a specific capital project, that the city could amend its charter to restrict the expenditure of capital outlays pursuant to section 166.031, Florida Statutes.

Previous opinions of this office have similarly considered the limitations on the amendment of a city's charter. For example, in Attorney General Opinion 82-101, this office was asked whether a city could amend its charter to limit or restrict the exercise of specific corporate, legislative, and governmental powers. In that opinion, citizens opposed the transfer of utility revenues to the city’s general fund for general operating purposes. Based upon the home rule powers of the city and the explicit authority to amend the charter pursuant to section 166.031, Florida Statutes, this office concluded that the city’s charter could be amended to restrict the transfer of utility revenues to the city’s general fund, thereby limiting the city’s power.

In Attorney General Opinion 90-38, this office concluded that a city charter could be amended to require referendum approval for the issuance of municipal bonds. However, in Attorney General Opinion 86-89, this office stated that an attempt to amend a charter to provide that no ad valorem taxes on real and personal property could be imposed without referendum approval would violate section 195.207, Florida Statutes, prohibiting a municipal charter provision limiting the governing body’s authority to levy ad valorem taxes.[5]

While this office determined in Attorney General Opinion 2001-04 that a county charter could not be amended to place a cap on the annual increase in the county’s operating budget,[6] Attorney General Opinion 2009-12 recognized that the statutes governing the adoption of a municipality’s budget are not as extensive as those governing county budgets. Section 166.241, Florida Statutes, merely requires a municipality for each fiscal year to adopt a budget which "must be adopted by ordinance or resolution unless otherwise specified in the respective municipality's charter."[7] (e.s.) This language would suggest that a municipality’s charter may affect the method by which a municipality’s budget may be adopted.

This office has commented informally on whether an amendment to a municipal charter may require referendum approval of capital projects, appropriations, taxes, and salaries of municipal officers and employees.[8] While finding no general laws prohibiting a charter provision requiring referendum approval of municipal salaries, the opinion noted that the propriety of requiring a citizens’ vote for capital projects may depend upon the particular project and any general laws providing for such projects.

In light of the discussion above and absent a general law prohibiting the amendment of a charter to limit expenditures, it would appear that the city’s charter may be amended to impose limitations on the operating expenditures of the city. Accordingly, it is my opinion that the city may amend its charter, subject to the provisions in Chapter 166, Florida Statutes, to address operating expenditure limitations.

Sincerely,

Bill McCollum

Attorney General

BM/tals

[1] See, e.g., Ops. Att'y Gen. Fla. 02-79 (2002) and 95-32 (1995); cf. Belk-James, Inc., v. Nuzum, 358 So. 2d 174 (Fla. 1978); Pickerill v. Schott, 55 So. 2d 716 (Fla. 1951); and State ex rel. Atlantic Coast Line Railroad Company v. State Board of Equalizers, 94 So. 681 (Fla. 1922). As discussed in this office’s statement regarding Attorney General Opinions, "[i]n order not to intrude upon the constitutional prerogative of the judicial branch, opinions generally are not rendered on questions pending before the courts or on questions requiring a determination of the constitutionality of an existing statute or ordinance."

[2] Section 166.021, Fla. Stat.

[3] Section 166.021(4), Fla. Stat.

[4] See Op. Att'y Gen. Fla. 86-89 (1986) citing to s. 195.207, Fla. Stat., expressly forbidding charter limitations upon a municipality’s authority to levy ad valorem taxes or utility services taxes. Section 7.01, Marco Island City Charter, provides that the charter may be amended in accordance with the provisions for charter amendment in Chapter 166, Florida Statutes, or as otherwise provided by general law.

[5] Section 195.207, Fla. Stat., provides:

"No municipal charter may prohibit or limit the authority of the governing body to levy ad valorem taxes or utility service taxes authorized under s. 167.431. Any word, sentence, phrase, or provision, of any special act, municipal charter, or other law, that prohibits or limits a municipality from levying ad valorem taxes within the millage limits fixed by s. 9, Art. VII of the State Constitution, or prohibits or limits a municipality from levying utility service taxes within the limits fixed by s. 167.431, is hereby nullified and repealed."

[6] The opinion recognizes that Florida courts have stricken local provisions seeking to limit a county commission’s discretion in setting an annual budget and millage rate in contravention of Chapters 129 and 200, Florida Statutes, which set forth the statutory framework by which counties must establish their budgets and millage rates. See Board of County Commissioners of Marion County v. McKeever, 436 So. 2d 299 (Fla. 5th DCA 1983), pet. for rev. den., 446 So. 2d 99 (Fla. 1984); Board of County Commissioners of Dade County v. Wilson, 386 So. 2d 556 (Fla. 1980); Charlotte County Board of County Commissioners v. Taylor, 650 So. 2d 146 (Fla. 2d DCA 1995).

[7] Section 166.241(2), Fla. Stat.

[8] Informal Op. to Mr. Kirk S. Warren, October 16, 2007.