|Legal Opinion: |
Text of Document: April 16, 2003
Re: Ordinance no. 4 and taxation in general
Your Management Consultant provided me with a copy of Ordinance no. 4 passed by the Board of Mayor and Aldermen of the City in 1991, and asked whether the ordinance is valid. I have also been asked to explain the power of the City to levy taxes in general.
Ordinance no. 4, which provides that no tax shall be levied by the City unless approved by referendum, is invalid and should be repealed by the board. There are two reasons this ordinance is invalid: 1) it is in direct conflict with the Charter for the City; and, 2) it is in conflict with the general laws of the state of Tennessee.
The City Charter is a general law, mayor aldermanic charter. Section 6-2-201(1) provides that the City has the power to “assess, levy and collect taxes for all general and special purposes on all subjects or objects of taxation, and privileges taxable by law for state, county or municipal purposes.” The power of the City to levy taxes is therefore only limited by the general law provisions of the state code.
Ordinances of a city are subordinate to the charter provisions. The Supreme Court declared in Marshall & Bruce Co. v. City of Nashville, 71 S.W. 815, 819 (Tenn. 1903):
The provisions of the charter are mandatory, and must be obeyed by the city and its agents; and, if in conflict with an ordinance, the charter must prevail. (Emphasis added)
The ordinance is therefore invalid, and cannot be relied upon by the City or its residents to limit the power of the City to levy and collect taxes.
The ordinance is also invalid due to its conflict with the general laws of the state. In Tennessee, there “is no right to hold an election, including a referendum, absent an express grant of power by the legislature.” McPherson v. Everett, 594 S.W.2d 677, 680 (Tenn. 1980). The ability to decide issues through referendum is quite limited. Those matters which may be submitted to the voters through referendum are specified in statutes, and include decisions to legalize sales of liquor by the drink and to adopt a home rule charter under the Tennessee Constitution. There is no provision in the tax code which permits a referendum.
I hope this information is helpful.
Thank you for consulting with MTAS.
Melissa A. Ashburn