The Honorable Jim Holland State Representative Route 1 Knobel, AR 72435-9801
Dear Representative Holland:
This is in response to your request for an opinion regarding whether $85,000 collected pursuant to a one-cent tax for hospital operation may be spent for a public complex for the area from which the tax was collected and, if so, what steps should be taken to get the money released? It is my understanding that the money in question was collected pursuant to a one-cent sales tax approved by the voters of the City of Corning to support the Corning Community Hospital. The hospital apparently went into bankruptcy and is no longer in existence, but the city still has $85,000 in surplus money raised by the tax. Your question is whether this money may be used to help pay for a public complex/community center that serves the city and surrounding area.
It appears that the use of this same surplus money was considered in Opinion No. 92-355, issued about a year ago (copy enclosed). In that opinion, I pointed out the prohibition contained in Article 16, Section 11 of the Arkansas Constitution against using tax moneys that were levied for one purpose for any other purpose, and concluded that the surplus money probably could not be used to provide other health related services to the City of Corning, such as the recruitment of physicians, and the providing of medical facilities. It is my opinion that this constitutional provision would likewise prohibit the use of the surplus money for the purpose you have proposed, which appears to be unrelated either to the operation of a hospital or to health care in general. As I noted in Opinion No. 92-355, however, holding another election might be an appropriate method of determining the purposes for which the surplus money may be used. See also Op. No. 89-117, a copy of which is enclosed. As I also noted in Op. No. 92-355, failing the redirection of the funds by another election, the case of Bell v. Crawford County, 287 Ark. 251, 697 S.W.2d 910 (1985), would appear to require a refund of the surplus to the taxpayers, to the extent such refund is possible.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Catherine Templeton.
Sincerely, WINSTON BRYANT Attorney General
WB:cyh
Enclosure