ELIZABETHTOWN — Most of the state's public library systems could be forced to roll back their tax rates and collectively refund millions of dollars to local taxpayers under a pair of lawsuits heard Monday by the Kentucky Court of Appeals.
The suits, filed by taxpayers in Kenton and Campbell counties, argue that many library districts have improperly raised taxes for decades without the 51 percent voter approval required by a previously obscure 1964 state law.
"We the people own the library. Every dollar spent in that library comes from us. So we should have a voice," said Charlie Coleman, a Tea Party activist elected last month as a Campbell County commissioner.
Circuit judges in Northern Kentucky sided with the plaintiffs in April 2013. The Kenton and Campbell county libraries appealed, warning of calamitous budget cuts if the suits succeeded.
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Making their case Monday, the libraries' attorneys said a separate law, House Bill 44, enacted in 1979, was meant to include most libraries among the special taxing districts that are allowed to raise taxes by an amount that increases revenue up to 4 percent each year without voter approval. Libraries were advised to follow HB 44 by state revenue officials in Frankfort.
"No one objected to this for 30 years. Not one member of the General Assembly said to a library district, 'Hey, you're doing this the wrong way!'" Jeffrey Mando, attorney for the Campbell County library, told the three-judge appellate panel.
"To now say to the libraries, 'You've gotta go back ...' That would be devastating," Mando said. "More than a 50 percent funding loss for the Campbell County library system. An equal or greater funding loss for other libraries around the state. And these library districts did nothing but operate in good faith."
Similar lawsuits against the libraries in Anderson, Montgomery and Boone counties are on hold in their respective circuit courts, pending the outcome of the Court of Appeals' decision, which is expected in 30 to 60 days.
Libraries vulnerable to legal challenge include a majority of the 106 systems that were created by petition before the legislature passed HB 44 in 1979. The Lexington Public Library would not be affected because its board does not set tax rates; rather, it gets revenue collected for it by the Lexington-Fayette Urban County Government.
The Kentucky Department of Libraries and Archives estimates that 99 library systems could lose money if the tax suits prevail, with 70 of them losing half or more of their annual operating income as tax rates were forced back and refund checks were written. That would result in staff layoffs, library closures and widespread cuts across remaining programs, such as books acquisition, children's activities, computer access and bookmobiles, the state agency said.
Librarians and library volunteers from around the state packed the courtroom Monday to hear the arguments.
Brandon Voelker, lead attorney against the libraries, told the court the cases started when several Northern Kentucky taxpayers visited his law office to ask for help in opposing a Campbell County library ballot measure that would have raised taxes by a large sum to build a new branch library. Voters ultimately defeated the measure.
While researching the laws relevant to library taxation, Voelker said he found a 1964 statute that plainly required library districts created by petition to raise their tax rates by petitions signed by 51 percent of voters. Although library officials say that later legislation came to replace this 1964 statute, the original law is still on the books, Voelker said.
"It's a simple issue. Just go back to the people," said Voelker, who ran unsuccessfully this year as a Republican for an open Northern Kentucky state Senate seat. "This suit is about preserving the right of the people to decide their tax rates."
The lawyers told the court that, during the 2014 legislative session, House Democrats tried to stop the lawsuits by adding language to a state revenue bill that would have retroactively clarified the taxing authority of library districts. Senate Republicans insisted the language be removed so the libraries would have to face their day in court.
"So you're saying the legislature is letting the judiciary solve this problem so everyone can call us 'judicial activists,'" quipped Judge Jeff Taylor, who was assigned to the cases with Judges C. Shea Nickell and Kelly Thompson.
Outside the courtroom, the plaintiffs said they were not trying to wreck libraries. Coleman said that after last year's circuit court rulings in their favor, the plaintiffs tried to reach a deal with the libraries: We'll let you keep your current tax rate if you'll agree to submit to public petitions for all future revenue increases. The libraries rejected the offer, Coleman said.
"This isn't against libraries. Hell, my wife has a library card. I live, like, half a mile from a library," Voelker said. "The problem is, it's a matter of priorities. Libraries aren't bad, but in lean financial times, you can't be spending all your money on luxuries like libraries when you have other critical needs, like roads and jails."
Wayne Onkst, commissioner of the Kentucky Department of Libraries and Archives, standing a few feet away in the courthouse, bristled when he was asked whether libraries were a luxury.
"I don't think most people see libraries as a luxury," he said. "Not the people who need a library for their only Internet access. Not the little kids whose only literacy skills before kindergarten come from a library. Not the local government leaders who are trying to recruit companies that want a literate, educated work force. None of them consider libraries a luxury."