Could Sorrento use its senior-program tax for garbage fees and give workers a health-insurance allowance?

Plain-English summary

The Town of Sorrento asked about two uses of public money in Opinion 03-0127. First, could it use sales-tax proceeds dedicated in part to senior-citizen programs to pay monthly garbage charges for residents aged 60 or older and fund a Christmas program for the same age group? Second, could it replace its health-plan contribution for employees who opted out with an insurance allowance? Attorney General Richard Ieyoub answered yes to both questions as framed, with an additional ordinance step for elected officials.

For the tax, the AG said special-tax proceeds "can only be used for the purpose for which it was levied." The tax's stated purposes included senior-citizen programs, along with recreation and fire protection. The opinion read that wording broadly enough to include the two proposed programs benefiting seniors.

For health benefits, the AG said public funds could support pension and insurance contributions for public employees. He suggested making a set insurance allowance part of an opt-out employee's compensation. The town could do the same for elected officials, but if an official's salary was set by ordinance, the ordinance had to be amended to include health insurance and other benefits.

Currency note

This opinion was issued in 2003. 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.

What the opinion meant at issuance

Town officials administering the dedicated tax

The AG treated the proposed garbage-charge and Christmas programs for people aged 60 and over as uses within the tax's stated senior-citizen purpose. His reasoning depended on that dedication; the opinion did not describe the proceeds as unrestricted town money.

Municipal employees and benefits officers

The opinion allowed an insurance allowance for a worker who opted out of the town's Blue Cross contract and suggested including a set amount in that worker's compensation. It did not specify an allowance amount or require the town to adopt the option.

Elected officials

The AG said the town could offer elected officials the same kind of benefit, but added a condition when salary was set by ordinance: the ordinance had to be amended to include health insurance and any other benefits.

Common questions

Q: Could Sorrento use the dedicated tax to pay seniors' garbage collection charges?
A: Yes, for the program described. The AG said the tax was levied partly for senior-citizen programs and that a program benefiting residents aged 60 and over fit that purpose.

Q: Did the opinion also allow the proposed Christmas program for seniors?
A: Yes. The AG treated both proposed senior programs as appropriate uses of the proceeds because they served the tax's stated senior-citizen purpose.

Q: Could a worker who declined the town health plan receive a set insurance allowance instead?
A: The AG said the town could pay or reimburse health-insurance premiums and suggested a set allowance in the opt-out worker's compensation package.

Q: Was an elected official's allowance automatic?
A: No. The AG said that if an official's salary was set by ordinance, the town first had to amend that ordinance to include health insurance and any other benefits.

Background and statutory framework

One percent of Sorrento's sales tax was dedicated to benefiting senior citizens. The town proposed the two programs for everyone aged 60 or older. Separately, its existing health contract paid 80 percent of premiums for full-time employees and elected officials, with the remaining 20 percent paid by the employee. The AG cited La. R.S. 39:704 for the special-tax restriction and Article 7, Section 14 of the Louisiana Constitution for public contributions to employee pension and insurance programs. The exact day in the source's first-page date stamp is unreadable in the PDF transcription; the opinion number and stamp place it in 2003.

Citations and references

Authorities in the opinion: La. R.S. 39:704 (use of special-tax proceeds); Article 7, Section 14 of the Louisiana Constitution of 1974 (public insurance contributions, as cited by the AG).

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/03-0127

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

DEPARTMENT OF JUSTICE
One American Place
301 Main Street, Suite 600
CIVIL DIVISION
P.O. Box 9400S
BATON ROUGE
TEL.: (225) 342-7013
FAX: (22.$) 342-2090
RICHARD P. IEYOUB
70804-9005
ATTORNEY GENERAL

o p~mon 1.62003
Number 03-0127

54 Insurance
71 Municipalities
Honorable Camile J. Trahan
La. R.S. 39:704
Mayor, Town of Sorrento
Article 7, Section 14 of the Louisiana Constitution
P.O. Box 65
Town of Sorrento may use tax proceeds to benefit its
Sorrento, LA 70778
senior citizens and may provide for an insurance
allowance in its employees’ compensation packages.
Dear Mayor Trahan:

One percent of a sales tax in the Town of Sorrento is dedicated for the benefit of senior citizens. The town is considering two programs to benefit its senior citizens. One program will pay the monthly garbage collection service charge of all persons ages sixty and over. The second is a Christmas program again to benefit all persons ages sixty and over. The town questions if these programs are an appropriate use of the tax proceeds.

Additionally, the town currently provides health insurance to its full time employees and its elected officials through a contract with Blue Cross. The current contract provides that the town pay eighty percent of the premium with the remaining twenty percent being paid by the employee. The town questions if it may instead provide an insurance allowance to its employees provided they opt out of the town’s insurance contract. This would save the town a considerable amount of money but it questions if such a program is legal.

First, it is our opinion that the programs described in your request, designed to benefit the town’s senior citizens, are an appropriate use of the tax proceeds. The proceeds of a special tax can only be used for the purpose for which it was levied.1 The tax at issue was levied for the purpose of providing funds for recreation, fire protection, and senior citizens programs. This language is somewhat broad and certainly if the program is to benefit senior citizens, it is within the dedicated purpose of the tax.

Second, public funds may be used for contributions to pension and insurance programs for the benefit of public employees.2 We, therefore, believe that the town may pay or reimburse health insurance premiums on behalf of its employees and elected officials.
We suggest that the town simply include an insurance allowance, if the employee opts out of the town’s insurance contract, of a set amount as part of the employee’s

La. R. S. 39:704
Article 7, Section 14 of the Louisiana Constitution of 1974

Opinion Number 03-0127
Honorable Camile J. Trahan
Mayor, Town of Sorrento
Page -2-

compensation package. The town can do the same for its elected officials, however, if
the official’s salary is set by ordinance, the ordinance must be amended to include
health insurance and any other benefits.3

Yours very truly,

RICHARD P. IEYOUB
Attorney General

BY:
TINA VICARI GRANT
Assistant Attorney General

RPI/TVG/dam

Attorney General Opinion Number 02-0197