Alliance of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough

The issue before the Supreme Court in this case concerned the validity of two 2005 Kenai Peninsula Borough (Borough) ordinances: one enacted by the Borough Assembly and the second enacted by voter initiative. The Borough Assembly enacted an ordinance in June 2005 that increased the sales tax rate from two percent to three percent. In an October 2005 election, Borough voters passed an initiative that required prior voter approval for all Borough capital projects with a total cost of more than one million dollars. The Alliance for Concerned Taxpayers (ACT) challenged the sales tax increase and sought to enforce the capital projects voter approval requirement. The superior court granted summary judgment to the Borough on both matters: on the sales tax issue, reasoning that a 1964 voter action allowed the increase and the 2006 referendum defeat ratified it; and on the capital projects voter approval issue, reasoning that Proposition 4 was an unconstitutional use of the initiative power to appropriate a public asset. ACT appealed. Upon review, the Supreme Court affirmed the superior court's grant of summary judgment on the sales tax issue and the capital project voter approval issue, concluding the 1964 voter authorization of a three-percent sales tax preserved the Borough's right to raise the rate to three percent, and that the 2006 defeat of the referendum to repeal the rate increase constituted a ratification of the increase. On the voter approval issue, the Court concluded that allowing voters to veto any capital improvement projects of over $1 million had the effect of diluting the Borough Assembly's exclusive control over the budget and was therefore an impermissible appropriation. View "Alliance of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough" on Justia Law