Sixth Circuit Court of Appeals Upholds City’s Use
of Tax Dollars to Defeat Referendum Election

Maria J. Armstrong
David M. Johnston
Bricker & Eckler LLP
September 2006

Highlights. The United States Court of Appeals for the Sixth Circuit recently confirmed that an Ohio municipality could use its tax dollars and resources to defend its legislation against a referendum challenge. When the City of Union Council passed an emergency ordinance establishing a joint fire and emergency management district, several citizens circulated and filed a referendum petition challenging the ordinance. Union defended its ordinance by using public resources to purchase banners and newspaper ads, and conduct mailings to urge voters to support the new fire department. Later, the City used its resources to urge voter support for a tax levy to fund the new fire district. Taxpayers filed suit against Union claiming that the use of taxpayer dollars to defeat the referendum violated the First Amendment of the United States Constitution. The courts rejected the suit and confirmed Union's ability to defend its ordinance against the referendum.

Read the case discussed in this article

On September 8, 2006, the Sixth Circuit United States Court of Appeals upheld the government's ability to use public resources, including tax dollars, to defend or oppose certain non-partisan ballot issues that affect the government. In Kidwell v. Union, 2006 FED App. 346P, (6th Cir. Ohio 2006), Case No. 04-4153, the Appellate Court affirmed the District Court’s ruling allowing the City of Union, Ohio (“Union”) to use public resources to defeat a referendum and subsequently to support a related levy issue. This important decision provides greater leeway to governmental entities to support or defend ballot issues within the scope of their governance functions, but does not provide unfettered authorization for governmental entities in this regard.

Facts. In 1997, the Union Council passed an emergency resolution establishing a joint fire and emergency management district effective January 1, 1998. Several citizens immediately challenged this action, and placed the issue on the November 1997 ballot for a referendum vote. A vigorous campaign was conducted on both sides of the issue, with the challenging taxpayers organizing a "Vote Yes" effort to defeat the council's ordinance via referendum. Union hung banners, mailed leaflets to residents, ran articles in the Union newsletter and advertised in local newspapers in an effort to defeat the referendum. At the ballot box, the voters defeated the referendum and ratified the Union Council's decision to create the fire and emergency management district.

Later in 1997, the Union Council authorized a separate tax levy to be placed before voters in a May 1998 special election to fund the newly created district. Another campaign resulted, with a citizen’s group working to defeat the tax levy. Union again used its resources to garner support for the levy, which passed.

During the course of these campaigns, several taxpayers filed suit in federal court challenging Union's ability to use taxpayer dollars and public resources to advocate a position on such ballot issues. The District Court dismissed the case, finding that spending tax dollars to defeat or support citizen initiatives and tax levies that were within the scope of its governance functions, such as emergency management, did not violate the First or Fourteenth Amendment. The taxpayers appealed.

The Legal Action. The taxpayers who brought suit raised two primary issues in their complaint before the federal court. First, they argued that it was unconstitutional for Union to deny them access to the Union newsletter and Union treasury, and claimed that others had been granted access to those two forums. The Court rejected this claim, holding that the Union newsletter was never opened up as a public forum and that even if it had been, the taxpayers had neither asked for access to the newsletter nor been denied access to this forum. The taxpayers, therefore, failed to present sufficient evidence to support their claim of unconstitutionality. Additionally, the court ruled a civic treasury is not a public forum either, and therefore not subject to regulation under the First Amendment to the United States Constitution, and overruled the taxpayers’ arguments as to use of the treasury.

The taxpayers further claimed that it was unconstitutional for Union to engage in “compelled speech” or, in other words, to force the citizens of Union to support positions with which they disagreed. The Court noted a series of United States Supreme Court cases finding that it may be unconstitutional for group to require its members to subside political speech with which they may not agree. The Court, however, distinguished these cases from instances where the government used public funds to support its own view point. The City of Union’s actions fell into the latter category because the government distributed the speech itself and the speech was related to a governmental purpose. The Court concluded that Union had the authority to support its own programs and policies, even if they were not universally accepted, and that using public resources and taxpayer dollars to do so was constitutional.

Finally, the Court pointed out that Ohio's home rule system made Union’s ordinances subject to acceptance or rejection through the referendum mechanism. Limiting governmental speech during such a referendum election would allow citizens to speak about the ordinance, but would silence the government on issues in which it had an interest and expertise. The Court concluded by finding that while some citizens will undoubtedly always be displeased by the stance that its government has taken, that displeasure does not necessarily equal an unconstitutional compulsion nor is it appropriate for First Amendment litigation. As such, the Court upheld Union's ability to use its resources to defeat the referendum and support the levy in this instance.

However, the Kidwell case does not provide free reign to government entities in this regard. For example, had the Union newsletter been found to be a public forum where community viewpoints in contrast to those of the city were regularly printed and had taxpayers provided more evidence to show that they were denied the use of the newsletter, the case may have been decided differently. In addition, the District Court rejected several arguments raised by the taxpayers because the taxpayers failed to exhaust their state court remedies first. Finally, the Union City Charter specifically permitted the Council to "authorize the expenditure of public funds to provide information to the members of the public in connection with elections on proposed tax levies and tax issues . . . and other issues affecting the Municipality and not involving the election of candidates for public office."

While the Court noted that language in its opinion, a taxpayer challenge related to the proper expenditure authorization was apparently dropped by the taxpayers in the course of litigation, and thus was not addressed by the Court. Political subdivisions without a clear authority to expend funds in this manner may face additional challenges if public resources are used in support of a ballot issue. While the Kidwell case serves as a valuable tool for political subdivisions that want to defend or oppose certain non-partisan ballot issues, political subdivisions should still be careful that the appropriate steps are taken before any expenditures are made.

Conclusion. The Kidwell case provides support to governmental entities that wish to spend their resources in support of or opposition to a ballot issue campaign or tax levy that falls within the scope of its governmental functions. While the Kidwell Opinion provides political subdivisions with support for these activities, government entities should still proceed with caution before spending public resources in this manner and be certain to follow all relevant expenditure procedures and consider whether they must provide equal access to anyone involved in a ballot issue campaign.