State Ex Rel. Hawkins v. Oklahoma Tax Commission

McINERNEY, Justice

(dissenting).

I am unable to agree that the Constitution of Oklahoma either contemplates or permits the disbursement of public money collected from the levy of a revenue tax without the authority of an appropriation by law within two and one-half years preceding the disbursement.

Every act enacted by the Legislature levying a tax must specify the purpose for which the tax is levied, and to that extent is “earmarked”, or it is void. Art. 10, § 19, Const. Meyer et al. v. Lynde-Bowman-Darby Co. et al., 35 Okl. 480 , 130 P. 548 . While the levy of the tax is governed, in part, by Art. 10, § 19 (in addition to other provisions not applicable here), the appropriation of the revenues estimated for collection from taxes is limited by Art. 10, § 23, and the expenditure of the appropriations is controlled by Art. 5, § 55.

The gasoline excise tax and the sales tax are revenue laws whose principal object is the raising of revenue, Anderson v. Ritterbusch, 22 Okl. 761 , 98 P. 1002 , and the funds accumulated from these taxes are for general state purposes; highways, Art. 16, § 1, and welfare, Art. 25, § 1.

Since all acts levying a tax must specify the purpose, it seems to me that the designation of a depository account in the state treasury other than the general revenue fund depository account would not suffice *545 to remove the many constitutional and statutory restrictions imposed on the expenditure of revenue raised pursuant to the levy of a revenue tax. In my opinion, the designation of a depository account amounts to nothing more than a proper bookkeeping arrangement for the convenience of the Treasurer, the Legislature, and the State Board of Equalization. It assures an accurate record of the condition of the fund necessary to accomplish the purpose specified by the tax levy. In other words, I do not believe that the purpose authorizes the expenditure of the revenue, but merely serves to justify the tax levy.

The legislative effort to limit appropriations within existing revenues, thereby eliminating the practice of operating state government by the issuance of non-payable warrants and deficiency certificates, as noted in Draper v. State Board of Equalization, Okl., 414 P.2d 276, 278 , resulted in the adoption in 1941 of the constitutional amendment changing Art. 10, § 23. At the same session, the Legislature enacted the Budget Law of 1941, H.B. No. 461, S.L. 1941, page 273, vitalizing the “Budget Balancing Amendment, Art. 10, § 23”. Later, the Budget Law of 1947, also vitalizing Art. 10, § 23, was enacted, 62 O.S.1961, § 41.1 et seq., imposing even greater restrictions on the expenditure of public funds than those contained in the Budget Law of 1941.

The Budget Law of 1947, in addition to the requirement of Art. 10, § 23 limiting the total appropriations to the estimated revenue to be received from all tax sources, provides for the approval of the Budget Director for allotments of the appropriations to the “spending agency”, 62 O.S. 1961 , § 41.7, § 41.9, and the approval of claims against the allotted portions of the appropriation by the Division of Central Accounting and Reporting, 62 O.S.1961, § 41.10. The absence of a current appropriation, as contemplated by Art. S, § 55 and Art. 10, § 23, nullifies the thrust of Art. 10, § 23 and the Budget Laws, in my opinion, and leaves the amount of expenditure of public funds collected from these revenue laws to the discretion of the spending agencies.

The expenditure of public money is authorized in pursuance of an appropriation by law. The disbursement of appropriations is controlled, initially, by the Budget Law of 1947, pursuant to the mandate of Art. 10, § 23; ultimately, by Art. 5, § 55. I agree with the majority that the new Art. 10, § 23 removes any restraint on the Legislature transferring surpluses from one fund to another. But I do not agree that the mere existence of the fund, or depository account, legally justifies the disbursement of the fund without a current appropriation. In fact, the theory of a continuing appropriation would seem to contravene the mandate of Art. 10, § 23 that appropriations must be limited to the preceding year’s revenue since such a theory would necessarily permit the expenditure of growth revenue, (Draper v. State Board of Equalization, supra), and, consistent with legislative direction made mandatory by Art. 10, § 23, prevent the Budget Director from reducing appropriations proportionately when the estimated budget resources are insufficient (Art. 10, § 23; 62 O.S.1961, § 41.6). Re-enactment of the tax levy or enactment of an appropriation by law each two years would satisfy the restraint of Art. 5, § 55. Nothing more is required; nothing less should be permitted.

My views are limited in scope to the taxing statutes, and revenue collected therefrom, discussed in the majority opinion. Since the funds here are accumulated by the levy of a revenue tax of general application, we are not called upon to determine questions involving proprietary or trust funds derived from other than the levy of a tax whose principal object is the raising of revenue. I would apply the two and one-half years limitation of Art. 5, § 55 to the disbursement of revenues collected from the tax levied by the gasoline excise tax and the sales tax.

I respectfully dissent.

I am authorized to state that Justice HODGES joins in the views expressed herein.