February 16, 2018

Kentucky Library District Gets Temporary Tax Reprieve

Jeff Mando

Jeff Mando, attorney for the Campbell County Public Library

A northern Kentucky library district won at least a temporary reprieve from wholesale budget cuts last week, after a judge ruled that its tax rate can stay the same until an ongoing lawsuit—which is being watched closely by libraries across the state—winds its way through the appeals process.

In April, a circuit court judge agreed with a challenge brought by members of the Northern Kentucky Tea Party, finding that Campbell County had improperly set its library tax rate for more than three decades. Plaintiffs argued that Campbell County’s library tax rate should drop from 7.7 cents per $100 of assessed value to 3 cents, the same amount taxpayers were charged when the district was created in 1978, and asked for this 55 percent spending rollback to take effect almost immediately. Lawyers for the Campbell County library appealed the decision.

The Sept. 17 decision in no way addressed the merits of the case, but it does allow Campbell County’s three-branch library system to maintain its current operating budget. “It certainly provides clarity and stability in the short term,” Jeff Mando, the attorney for Campbell County Public Library (CCPL), told LJ this week.

“The Library argues that it will suffer immediate and irreparable injury if it is required to reset its tax rates and utilize reserve funds to operate pending appeal. We agree,” Judge Glenn E. Acree, chief judge of the Kentucky Court of Appeals, wrote in his four-page order.

Library Director J.C. Morgan said the Sept. 17 ruling will basically allow his district to remain intact while the appeals process continues. “It’s very good news,” he said this week. “To be able to continue providing the level of service that people enjoy is very important to us.”

Morgan said lowering the tax rate to 3 cents would mean paring staff from 83 to 35 employees, shutting at least one branch, and cutting weekly hours from 70 to 50 at each branch.

Acree also granted Mando’s motion to advance the appeal, and lawyers for both sides must file briefs by the end of 2013. The Court of Appeals will then decide if it wants to hear oral arguments on the matter, which Mando said could take place by “late winter.”

Brandon Voelker, the attorney representing plaintiffs in the Campbell County matter, did not return calls seeking comment this week. Voelker had previously told LJ that he did not object to Mando’s motion asking the appeals court to expedite the process.


A state-wide situation

The Sept. 17 decision allows CCPL officials some breathing room for now, but if the legal reverse of five months earlier is upheld, it will not only impact Campbell County, but threatens to significantly alter the way libraries around the state collect revenue. Similar lawsuits are pending in four other Kentucky library districts: so far, lawsuits have been filed against five Kentucky library districts, all challenging their status as special taxing districts. Plaintiffs in Campbell, Kenton and Boone counties are all members of the Northern Kentucky Tea Party. A member of Citizens for Fair Taxation, a conservative-leaning organization, filed a lawsuit against the Montgomery County library system. A fifth suit was filed in Anderson County. Voelker represents plaintiffs in all five cases.

But since 79 of Kentucky’s 106 library districts were created by a petition drive, literally collecting signatures from registered voters, the appellate decision could have statewide ramifications beyond the districts currently in litigation.

On April 2, Campbell County Circuit Court Judge Julie Reinhardt Ward ruled that because the county’s library district was created this way in 1978, under a statute known as KRS 173.790, it is not entitled to raise tax revenue except through a similar petition signed by 51 percent of voters.

Mando argued that a separate state law passed in 1979, House Bill 44, made Campbell County a special taxing district, permitting limited annual tax increases not subject to voter approval. Ward ruled that HB 44 did not cancel out KRS 173.790, in effect declaring that 34 years of library tax rates in Campbell County were invalid.

Voelker dismissed charges that his clients are anti-library or even anti-tax; he says Campbell County is certainly free to charge whatever tax rate it wants, provided the district collects enough signatures to demonstrate voter approval. “It’s about a rule of law,” Voelker told LJ in April. “Whether it’s a library or a fire department, there are certain rules that govern how you set a tax rate and they should be followed.”