Lonoke County justices of the peace wrestled Thursday, at a special meeting, with the dilemma of either revising the voluntary taxes for various groups or simply ending the option.
The Joint Legislative Audit Service, on two annual audits, has faulted the collection of voluntary taxes for 11 organizations in the county as unconstitutional.
County Judge Doug Erwin said the challenge is to meet the requirements of the law, “while helping as much as possible.”
District 6 Justice of the Peace Alexis Malham, though, called for the tax to be stopped. “This is just adding another layer of bureaucracy,” she said of options presented at the special meeting.
Erwin and justices of the peace Malham, Joe Farrer, Jannette Minton, Larry Odom, Tim Lemons, Barry Weathers, Claude Irwin, Richard Lynch, Mike Dolan, Bill Ryker and Sonny Moery attended the meeting.
Little Rock attorney Mike Rainwater explained the restrictions imposed by the state Constitution, and the requirements established by law in voluntary taxes. Rainwater acts as an adviser to the Association of Arkansas counties.
“I learned a long time ago that it is not my job to go to some county and tell them how they ought to run county business,” Rainwater said. “It is your job to decide how you want to operate the affairs of Lonoke County,” he said.
The affairs of the county have to stay between two lines — legal and constitutional, Rainwater said. “You can’t do anything illegal, and you can’t do anything that’s unconstitutional,” he said.
But, between those two limits there is wide latitude in what can be done, Rainwater said.
Collection of a voluntary tax is permissible as long as it meets three conditions, Rainwater said. The tax must be for a public entity, for a public service and for the general public, he said.
“There is nothing inherently wrong with a voluntary tax,” Rainwater said. But the state Constitution prohibits the county from collecting money for a private entity, he said.
The collection of a voluntary tax for the sheriff’s drug enforcement efforts, and the voluntary tax for the soil and water conservation district for beaver control are proper because those are public entities, Rainwater said.
But the collection for private entities is prohibited, he repeated.
Auditors have faulted Lonoke County for collecting taxes for 11 organizations. Those are, and the taxes collected so far in 2012: Lonoke County Council on Aging, $3,956; the Lonoke Exceptional School, $3,956; Lonoke County Fair, $4,625; Lonoke County Humane Society, $3,239; Lonoke County Cares, $1,107; Open Arms Shelter, $12,484; Wade Knox Children’s Advocacy Center, $7,457; A Woman’s Place Pregnancy Center, $7,292; Court Appointed Special Advocates of Lonoke County, $7,341; Carver Alumni Association, $7,224; and the Lonoke County Museum, $7,342.
Erwin pointed out that the same faulting of the county for the voluntary taxes that was noted in the 2010 joint legislative audit of the county has been repeated in the 2011 audit. County audits are of the previous year’s records.
In September, Erwin was summoned to answer to the Joint Legislative Audit Committee about the county’s collection of the voluntary taxes.
On Thursday, Rainwater said the two issues are — who collects the money and who gets to use the money.
“There is nothing wrong with the county choosing to enter an agreement with a private entity, for a public purpose, to benefit the public generally,” Rainwater said.
“It is not the collection [of voluntary taxes], but who it is collected for,” Rainwater said.
Arkansas Code Annotated 14-14-802 lists the services that a county, through the quorum court, may provide.
The list is extensive and includes agricultural, home economic, and community development extension services; fairs and livestock shows; livestock inspection and protection services; rodent, predator, and vertebrate control services; economic development services;
Watercourse, drainage, irrigation, and flood control services; animal control; consumer education and protection services; libraries, museums, civic center auditoriums, and historical, cultural, or natural site services; fire prevention and protection services;
Child care, youth, and senior citizen services; public health and hospital services; social and rehabilitative services; and solid waste and recycling services.
The key, Rainwater said, is that taxes must go to a public entity; taxes cannot be collected for a private entity.
Rainwater outlined several means by which the tax could be collected for a public entity, such as a county administrative board, which would then use the revenue to obtain permitted services from a private group.
With an administrative board, there must be regular meeting times; there may be special meetings called by two board members, the chairman cannot operate alone; the option would be, “Going from simple to complex,” he said.
Malham railed against the panels, boards and other controlling measures. “Remember that these [board members] are not elected, they are appointed. The people did not elect them; they are appointed by somebody,“ Malham said.
“This is just creating more government,” Malham remarked.
After about an hour of discussion, in a vote on a motion by Malham to end the collection, the Quorum Court chose to continue collecting the tax, but as a special agencies fund. Distribution of the revenue is to be discussed at another meeting.