Arata v. Louisiana Stadium and Exposition District

McCALEB, Justice

(dissenting).

Being of the view that the provisions of the lease herein obligating the State of Louisiana, as lessee, to pay “base rentals” annually in the amount required to pay the bonds issued by the Louisiana Stadium and Exposition District constitute an indirect, if not a direct, violation of the prohibition set forth in Paragraph (S), § 47 of Article 14 of the constitutional amendment, that “No bond issued under this amendment shall be secured by the faith and credit of the State”, I think the judgment of the trial court should be affirmed.

Actually, I perceive little difference, except as to the end result, between the views I entertain and those realistically expressed in the majority opinion. Preliminarily, that opinion would view the transactions between the State and its alter ego, the District, “ * * * superficially and in a technical sense,” and concludes that, when thus considered, the *613bonds are not secured by the faith and credit of the State for several reasons.

However, it is apparent from the opinion, if I read and understand it correctly, that the Court is unwilling to rest its decision upon superficial or technical considerations for, thereafter, the opinion considers the obligation of the State in its true light — that is, “* * * an obligation of the State securing the bonds, (at least to the extent of the difference between the payments required to service the bonds on one hand, and the revenue from the hotel occupancy tax plus the net income from the operation of the project on the other hand) * * In other words, as the Court later shows, this is a full faith and credit transaction, for the State is obligating itself unconditionally for the payment of these bonds as guarantor in the event the hotel occupancy tax and the Stadium’s yearly net income are insufficient to meet the obligation to the bondholders. In deducing that Paragraph (E) of § 47 of Article 14 of the Constitution plainly contemplates that the obligation of the State under the lease is a full faith and credit transaction, the Court states:

“Paragraph (E) grants the State of Louisiana the right and authority to lease the facilities of the District and ‘provide for the payment of the consideration therefor through the appropriation of funds or otherwise.’ It sets forth in plain and unambiguous language that ‘The obligations of the lessee (State) or lessees under any such lease shall constitute a charge against the revenues' of such lessee or lessees.’ (Parentheses added.)
“Thus, paragraph (E) embodies an authorization to the State to pay the consideration of the lease ‘through the appropriation of funds’, and it provides that the obligations of the State under the lease ‘shall constitute a charge against the revenues of such lessee (the State).’ (Parentheses added.) Under this authorization, because the State may ‘appropriate funds’ for the payment of the lease rentals and the obligations under the lease ‘constitute a charge against the revenues’ of the State, the authorization comprehends all those commitments which are components of a transaction involving the full faith and credit of the State.
“The right of the State to ‘appropriate funds’ to discharge an obligation is the right to commit itself unconditionally from its entire resources. In the same manner, when an obligation ‘constitutes a charge against the revenues’ of the State, it is in reality a full faith and credit transaction, for a State’s revenues are derived from many sources. Primarily revenue is obtained from the State’s general power of taxation, including property taxation. A charge against the State’s revenue is therefore a charge *615against its general taxing power. The definition of ‘full faith and credit’ makes it clear that when this taxing power is available to secure a transaction the essential element of a full faith and credit or general obligation transaction is satisfied.”

I am in accord with the above-quoted ■observations, but I do not subscribe to the ultimate conclusion of the majority that, because Paragraph (E) of § 47 vests the power to pledge the faith and credit of the State to secure the payment of the rental to be stipulated in the lease, this paragraph is necessarily inconsistent with Paragraph (S) and, therefore, it must prevail ■over the latter paragraph, which is rendered ineffective on the theory that Paragraph (E) is a special provision whereas Paragraph (S) is a general provision.

The issue here, as I see it, does not involve the question whether either Paragraph (E) or Paragraph (S) should prevail over the other. There is but one •constitutional amendment, and all of its provisions should be considered and read together in order to determine the intent •of the people. This Court is without authority to strike down any provision as unenforceable, unless it is impossible to give it effect. And, if there by any inconsistency as to the authority granted in one provision (Paragraph [E]), that authority must necessarily be curtailed when it is used in a manner so as to defeat the plainly-stated limitation contained in Paragraph (S), that “No bond issued under this amendment shall be secured by the faith and credit of the State.” (Italics mine.)

Paragraph (S) is not a general provision in my judgment; it is simply a special limitation under which no bonds issued by the District may be secured by the faith and credit of the State. Paragraph (E) is likewise a special provision, insofar as it authorizes the State to make a lease with the District, which of course is a hybrid sort of thing, as the District is nothing but an agency of the State. The provision that authorizes the State to pledge its faith and credit for the payment of the lease rental does not necessarily conflict with the prohibition contained in Paragraph (S), save and except, that .the State, by the lease contract it confected, has guaranteed payment of the bonds. Because of this pledge, the contract comes into collision with Paragraph (S) and, hence, the obligation is violative of the prohibitory provisions of the amendment.

In final analysis the decision today, in striking down Paragraph (S), thwarts, in my humble opinion, the will of the people who unquestionably adopted the constitutional amendment under the well-founded belief that no bond issued by the District would be secured by the faith and credit of the State.

*617I respectfully dissent.