The Honorable Art Givens State Representative 301 Brookwood Road Sherwood, AR 72116
Dear Representative Givens:
This is in response to your request for an opinion concerning the construction of baseball fields in the City of Sherwood. Specifically, you have enclosed a letter from the Mayor of Sherwood explaining that the people of the city passed a two percent hotel, motel, and restaurant tax for the purpose of building parks and baseball fields. (See generally Opinion No.89-211, a copy of which is enclosed.) The city expended a large sum of money to purchase a tract of land on which to construct the fields, but now has insufficient tax moneys to fund the construction. The mayor inquires as to the legality of using city general funds, rather than the two percent "hamburger tax" funds, to construct the ballpark, and then reimbursing the general fund as the "hamburger tax" funds are collected.
It is my opinion, although there is no precise Arkansas case law on point, that the scenario outlined above would most likely be violative of Arkansas Constitution Art. 16, 11, which provides as follows:
No tax shall be levied except in pursuance of law, and every law imposing a tax shall state distinctly the object of the same; and NO MONEYS ARISING FROM A TAX LEVIED FOR ONE PURPOSE SHALL BE USED FOR ANY OTHER PURPOSE. (Emphasis added.)
It is my opinion that the contemplated action explained by the mayor would constitute a technical violation of the section above. Under this plan, technically, the "hamburger tax" monies will go into the general fund and will be expended for any one of a number of purposes for which the general fund may be used. This is true even though the transfer of these monies into the general fund may be in repayment of an expenditure of general fund monies for a purpose for which the "hamburger tax" monies might have been expended.
We are not unmindful of the fact that the above conclusion appears to be overly Draconian. We are not, however, willing to conclude otherwise when to do so might expose the city to a successful illegal exaction suit under Arkansas Constitution, Art. 16. 13.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Elana L. Cunningham.