author: FINCH, Presiding Judge.

text:
    POLICE RETIREMENT SYSTEM of Kansas City, Missouri, et al., Respondents, v. KANSAS CITY, Missouri, and its Director of Finance, John M. Urie, Appellants.
    No. 58933.
    Supreme Court of Missouri, Division No. 2.
    Nov. 10, 1975.
    Motion for Rehearing or to Transfer Denied Dec. 8, 1975.

      Sam Mumma, Asst. City Atty., Kansas City, for appellants.
    John A. Layton, Kansas City, for respondents.
    William Gilmer, pro se.
   FINCH, Presiding Judge.

The single issue involved in this appeal is whether the Police Retirement System of Kansas City (hereinafter Retirement System) is prohibited by provisions of the Missouri Constitution from making cost-of-living adjustments in pensions paid to police officers who had retired prior to the effective date of § 86.441, V.A.M.S. (Laws of 1972, p. 607), the statute authorizing payment of such cost-of-living adjustments. We have jurisdiction because the attack on the right of the Retirement System to make such adjustments involves interpretation of provisions of the Constitution of Missouri.

This case was submitted on a stipulation of facts which was supplemented by testimony of actuaries and investment counselors. The trial court held that the Retirement System legally could make such payments. We reverse and remand with directions.

The Retirement System exists by virtue of §§ 86.370 to 86.497 inclusive of Chapter 86, most of which sections were enacted originally in 1945. These statutes create retirement systems for all cities of 300,000 to 700,000 population, establish formulas for pensions to be paid, and provide for actuarial studies and computations to determine contributions required to fund the system. The amount of contributions to be made by member policemen and by the city are fixed from time to time by the board of the Retirement System within those limits authorized by the statute. Presently, members contribute 7 per cent of their salaries and the City contributes 13 per cent of salaries paid. Policemen cease to contribute when they retire.

In 1972 the General Assembly amended Chapter 86 by adopting a new § 86.441, effective August 13, 1972. That section authorized cost-of-living adjustments, beginning January 1, 1972, to base pensions, including those being paid to members who had already retired.

Pursuant to authorization in § 86.441, the board of the Retirement System adopted rules and regulations for computation and payment of cost-of-living adjustments to base pensions as of January 1, 1973, including those being paid to members who had retired prior to August 13, 1972, and their surviving spouses. No change was made in the percentage being deducted from salaries of members or in the percentage being contributed by the City. Persons already retired were not required to make any financial contribution in order to qualify for this cost-of-living adjustment.

Although the board of the Retirement System did not request the City to increase its contribution for the purpose of covering these cost-of-living increases, defendant Urie, on advice of counsel that payments to persons already retired were of doubtful legality, began to withhold and continues to withhold from the City’s contribution to the retirement fund an amount said to be approximately equal to the sums the retirement fund would pay as cost-of-living adjustments to those who had retired prior to August 13, 1972.

Subsequently, the Retirement System (later joined as plaintiffs by retired officers Gilmer and Harris as representative members of a class consisting of all persons who had retired prior to August 13, 1972, and were receiving benefits on that date) instituted this declaratory judgment action, seeking a determination that payment to members who retired before August 13, 1972, of cost-of-living adjustments in accordance with § 86.441 are lawful and not violative of provisions of the Constitution of Missouri. When the City filed its answer thereto, it tendered into court the funds being withheld but the trial court ordered the City instead to retain said funds in a segregated account pending final disposition of this case.

We consider first the contention of defendants that the proposed post-retirement cost-of-living adjustments to those officers who had retired prior to August 13, 1972, would violate Art. VI, § 25, Mo.Const., which provides as follows:

“No county, city or other political corporation or subdivision of the state, shall be authorized to lend its credit or grant public money or property to any private individual, association or corporation * * * except that the general assembly may authorize any * * * city * * * to provide for the retirement or pensioning of its officers and employees * *

In advancing this argument, the defendants assume that pensions are gratuities rather than compensation' for services performed. Plaintiffs agree with that premise. Defendants base this characterization of pensions on cases such as State ex rel. Heaven v. Ziegenhein, 144 Mo. 283, 45 S.W. 1099 (banc 1898), and State ex rel. Wander v. Kimmel, 256 Mo. 611, 165 S.W. 1067 (1914), in both of which pensions were held to be gratuities. For example, in Zieg-enhein this court considered the constitutionality of an act which required pensioning of an officer with twenty years service when the officer was injured in line of duty (and of his family when death resulted). The court held that such pensions were gratuities rather than a part of compensation for services rendered before retirement and that such gratuities were prohibited under Art. IV, § 47, Mo.Const.1875.

Art. VI, § 25, of the present Constitution, contains essentially the same language as appeared in Art. IV, § 47, Mo. Const.1875, except that a clause expressly authorizing the General Assembly to permit cities to provide for retirement or pensioning of its officers and employees has been added. Plaintiffs argue that the proposed post-retirement cost-of-living increases in pensions to previously retired policemen fall within that clause in Art. VI, § 25 authorizing city pensions. We disagree. The exception in Art. VI, § 25 speaks in terms of officers and employees, not retired officers and employees. When the officers in question retired from the police department, their pensions were determined and fixed in accordance with the then established applicable formulas. Atchison v. Retirement Board of Police Retirement System of Kansas City, 343 S.W.2d 25, 34 (Mo.1960). Assuming that such pensions constituted gratuities, additions thereto after their retirement, in the absence of a provision in Art. VI, § 25 or elsewhere in the Constitution which would authorize the establishment of pensions or of increases therein for employees already retired, Art. VI, § 25 is applicable and the granting of the proposed cost-of-living adjustments to such persons is prohibited by it. Such a conclusion is in accord with the prevailing rule as shown by the following quotation from an annotation in 142 A.L.R. 938, 939 (1943):

“By the weight of authority, statutes or ordinances, so far as they attempt to grant pensions to persons who, at the time of their enactment, have already retired from public office, are unconstitutional as amounting to gratuities for private purposes.”

As previously noted, the conclusion that pensions granted to previously retired employees are prohibited by Art. VI, § 25, is based on the premise that pensions are gratuities as held in Ziegenhein. However, there is authority for the proposition that pensions constitute deferred compensation for services previously performed and are not gratuities. In 60 Am.Jur.2d Pensions § 2, it is stated:

“ * * * by modern usage, the term ‘pension’ is not restricted to pure gratuities. Thus, it has been held that a pension paid a governmental employee for long and efficient service is not an emolument, the payment of which is barred by a state constitutional provision, but is a deferred portion of the compensation earned for services rendered.”

Certain Missouri cases have recognized that there is confusion as to the nature of interests created by retirement and pension plans. See State ex rel. Breshears v. Missouri State Employees’ Retirement System, 362 S.W.2d 571, 575 (Mo. banc 1962); State ex rel. Phillip v. Public School Retirement System, 364 Mo. 395, 262 S.W.2d 569, 576 (Mo. banc 1953); Atchison v. Retirement Board of Police Retirement System of Kansas City, 343 S.W.2d 25, 34 (Mo.1960). Recognizing that pensions are sometimes classified as deferred compensation, defendants assert that even if so treated, the proposed post-retirement cost-of-living adjustments for those who had retired before August 13, 1972, would violate Art. Ill, § 39(3), which states as follows:

“The general assembly shall not have power: * * * (3) to grant or to authorize any county or municipal authority to grant any extra compensation, fee or allowance to a public officer, agent, servant or contractor after service has been rendered or a contract has been entered into and performed in whole or in part;

Defendants point out that these proposed adjustments contemplate no additional services from the petitioners but will have as their sole justification those services which were rendered during their prior employment which has been terminated and for which these former employees’ pension benefits have been fixed. Consequently, say defendants, such adjustments amount to “extra” or “add on” compensation for services previously rendered and violate Art. Ill, § 39(3). This issue was recognized but not resolved in State ex rel. Breshears v. Missouri State Employees’ Retirement System, supra, for the reason that the court disposed of the case by holding that the proposed increase in pensions there contemplated was invalid under the provisions of Art. I, § 13, Mo.Const.

While not expressly ruled upon in any earlier Missouri case, the issue of whether increasing the pension of previously retired employees violates constitutional restrictions on granting additional compensation for services previously rendered has been considered in cases from other jurisdictions. In Sonnabend v. City of Spokane, 53 Wash.2d 362, 333 P.2d 918 (Wash. banc 1958), the court held that because Washington holds that retirement pensions paid to police officers constitute deferred compensation, an attempt by a 1957 statute to raise those pensions after retirement was unconstitutional as granting extra compensation for services previously rendered.

In State ex rel. Thomson v. Giessel, 262 Wis. 51, 52 N.W.2d 726 (1952), the court denied a writ of mandamus seeking to compel payment of additional retirement benefits to previously retired teachers, such a refusal being based on the proposition that such payment would violate a constitutional prohibition against extra compensation for services previously rendered.. The fact that the retirees would contribute an additional $100 to the retirement fund did not alter the result.

In Jameson v. City of Pittsburgh, 381 Pa. 366, 113 A.2d 454 (1955), taxpayers sought to enjoin any action pursuant to a statute which allowed payment of additional annuities to persons previously retired in exchange for a payment by the retiree of $200. The court held that when the employees retired, their contract rights as to annuities vested and those rights did not include entitlement to subsequent cost-of-living increases. Consequently, the payment thereof would constitute extra compensation for services previously rendered and was unconstitutional.

The conclusions reached in the foregoing Washington, Wisconsin and Pennsylvania cases are in harmony with the reasoning by this court in Kizior v. City of St. Joseph, 329 S.W.2d 605 (Mo.1959), wherein the City of St. Joseph had contracted with a garbage collection company to collect garbage for a ten year period at a stated annual fee. Thereafter, after a part of the ten year term had passed, the garbage collection company indicated that it would need more compensation and the City, by ordinance, sought to increase the annual fee to be paid without any real increase in duties or services to be performed. This court held that the proposed increase amounted to a grant of extra compensation under a contract previously executed and partially performed and was violative of Art. Ill, § 39(3). Similarly, if pensions are, in fact, deferred compensation, then adding thereto after retirement, in the absence of express authority therefor, constitutes “extra” or “add on” compensation and violates Art. Ill, § 39(3).

In this connection see also the observation in the nature of a caveat in State ex rel. Sanders v. Cervantes, 480 S.W.2d 888, 893 (Mo. banc 1972), as follows:

“ * * * We find no constitutional barrier to relators’ exercise of the power delegated to it by the general assembly as found in subparagraph 4 of paragraph 5 of Section 84.160 in so far as such action pertains to those officers and employees retiring after the effective date of Section 84.160. Relators have not asked that we consider the validity of providing similar benefits to those having retired prior to such effective date. In that connection we mention Kizior v. City of St. Joseph, Mo., 329 S.W.2d 605; Atchison v. Retirement Board of Police Retire. System, Mo., 343 S.W.2d 25; State ex rel. Breshears v. Missouri State Employees’ Retirement System, Mo., En Banc, 362 S.W.2d 571, and the Constitution of Missouri, 1945, Article III, Section 39, paragraph 3.” (Emphasis supplied.)

Plaintiffs seek to avoid application of Art. VI, § 25 and Art. Ill, § 39(3) by arguing that the cost-of-living adjustments do not increase the pensions of those previously retired but seek only to offset inflation and its erosionary effect on the value of pensions by making limited cost-of-living adjustments to maintain the status quo and keep pensions at parity. Similar contentions were advanced in Sonnabend, Giessel, and Jameson, the Washington, Wisconsin and Pennsylvania cases previously discussed, but were rejected on the basis that the pensions or annuities previously granted and being paid were cast in terms of dollars, not purchasing power, and that proposed increases therein constituted extra compensation in violation of constitutional restrictions comparable to Art. Ill, § 39(3). We agree. To hold otherwise would mean that similar claims for adjustments in previously awarded contracts could and would be asserted on the basis that inflation authorized increases in contract price to compensate for inflationary factors. Such an increase was not upheld in Kizior and is not permissible here.

Plaintiffs next assert that Art. VI, § 25 and Art. Ill, § 39(3) are inapplicable on the basis that funds contributed to the Retirement System lose their identity as public funds when paid over to the Retirement System and commingled with its funds and assets and that payments therefrom are not from public funds. The rule is to the contrary. Such funds continue to be public funds to which the constitutional provisions in question are applicable. See State ex rel. King v. Board of Trustees of Firemen’s Pension Fund of Kansas City, 192 Mo.App. 583, 184 S.W. 929, 933 (1916); MacLeod v. Fernandez, 101 F.2d 20, 25 (1st Cir. 1938); State ex rel. Risch v. Board of Trustees Policemen’s Pension Fund, 121 Wis. 44, 98 N.W. 954, 956 (1954).

We hold that § 86.441, insofar as it applies to persons already retired on August 13, 1972, is unconstitutional and payments thereunder to persons already retired on that date are prohibited. In so holding, we need not and do not resolve the question of whether pensions are gratuities or deferred compensation. The parties have not undertaken to brief thoroughly the question of how pensions should be characterized and it is better to leave that issue until such time as it becomes a litigated issue. For purposes of deciding this case, it makes no difference which way they are characterized. If they are gratuities, the proposed adjustments violate Art. VI, § 25. If they are deferred compensation, they violate Art. Ill, § 39(3). Thus, in either event, the post-retirement payments attempted in this instance are not permissible.

We take note of the fact that both plaintiffs and defendants offered considerable testimony with reference to the economic situation, present and prospective, and whether income of the Retirement System from higher interest and dividend rates would be sufficient to pay proposed adjustments to previously retired persons without impairing obligations due other persons retiring. This evidence was offered for the purpose of establishing that this case is not governed by State ex rel. Breshears v. Missouri State Employees’ Retirement System, supra, in which this court held that increasing pensions to persons previously retired adversely affected the rights of others entitled to pensions and violated Art. I, § 13. We do not undertake to resolve that question in this case, or to decide whether the evidence offered would sustain a different result than in Breshears, because it would make no difference in the outcome of this case.

In the prayer in their answer, plaintiffs ask that the impounded funds be returned to the City. They are not entitled to that relief because the sums withheld were taken from the 13 per cent of salaries which the City was obligated to contribute to the Retirement System before the question of post-retirement adjustments arose. Hence, the Retirement System is entitled to have such withheld funds distributed to it. Under our decision, they may not be utilized to pay adjustments which we hold to be impermissible.

The judgment is reversed and the cause remanded for entry of a judgment in accordance with the views herein expressed.

All of the Judges concur.

      . All statutory references are to RSMo 1969 unless otherwise indicated.

      . The full text of § 86.441 is as follows:
      “1. Any member who is retired or who retires on a pension subsequent to August 13, 1972, may receive each year, beginning January 1, 1972, in addition to his base pension, a cost-of-living adjustment in an amount not to exceed three percent of his base pension during any one year.
      “2. The cost-of-living adjustment shall be an increase or decrease computed on the base pension amount by using the consumer price index to determine the percentage of increase or decrease; provided, however, in no event shall the adjustment reduce the pension to an amount less than the base pension. The retirement board shall utilize the consumer price index for urban wage earners and clerical workers for Kansas City, Missouri, published by the Bureau of Labor Statistics, United States Department of Labor, in determining the percentage increment for such cost-of-living adjustment or, in the event such index is or becomes unavailable, the retirement board may select such other index as it in its discretion determines to be satisfactory.
      “3. In determining and granting the cost-of-living adjustments, the retirement board shall adopt such rules and regulations that may be necessary to effectuate the purposes of this section including provisions for the manner of computation of such adjustments and the effective dates thereof. The retirement board shall provide for such adjustments to be determined once each year and granted on a date or dates to be chosen by the board and may apply such adjustments in full to members who have retired during the year prior to such adjustments but who have not been retired for one full year.
      “4. ‘Base pension ’ as used in this cost-of-living adjustment section shall mean the pension computed under the provisions of the law as of the date of retirement of the member without regard to cost-of-living adjustment. ‘Member’, as used in this section shall include surviving spouse. Added by Laws 1972, p. 607, H.B. No. 1307, § 1.”

      . By testimony offered at the trial, the Retirement System sought to show that earnings and projected earnings of the fund, resulting from higher interest rates, would be ample to fund the cost-of-living adjustments which would be payable to members who retired prior to August 13, 1972.

      . Defendants City and Urie have made no attack on cost-of-living adjustments in pensions to members retiring after August 13, 1972, or the right of the Retirement System to make such adjustments and have not deducted any sums with reference thereto.

      . Cases so holding include Hooker v. Hoey, 27 F.Supp. 489, 490 (S.D.N.Y.1939); Ledwith v. Bankers Life Ins. Co., 156 Neb. 107, 54 N.W.2d 409, 417 (1952); Retirement Bd. of Allegheny County v. McGovern, 316 Pa. 161, 174 A. 400, 404 (1934). It also should be noted that payments from contributory pension systems are treated as payments for past services, not gratuities for tax purposes. Heard v. Comm'r of Internal Revenue, 326 F.2d 962 (8th Cir. 1964); Miller v. Comm’r of Internal Revenue, 144 F.2d 287 (4th Cir. 1944).

      . In 1958 a constitutional amendment permitting raises in pensions previously granted was approved. See Luders v. City of Spokane, 57 Wash.2d 162, 356 P.2d 331 (Wash. banc 1960).


source: Caselaw Access Project

author: BARDGETT, Judge.

license: Public Domain

text:
    McKAY BUICK, INC., a corporation, et al., Respondents, v. James R. SPRADLING, Director of the Department of Revenue of the State of Missouri, et al., Appellants.
    No. 59174.
    Supreme Court of Missouri, En Banc.
    Nov. 10, 1975.

      John C. Danforth, Atty. Gen., Clarence Thomas, Asst. Atty. Gen., for appellants.
    David V. G. Brydon and James C. Swear-engen, Jefferson City (Hawkins, Brydon & Swearengen), Jefferson City, for respondents.
   BARDGETT, Judge.

In this declaratory judgment case the circuit court of Cole County upheld the constitutionality of Senate Bill 402 (§ 150.010, RSMo 1969, as amended 1974) enacted by the 77th general assembly in 1974 as against the contentions of appellants, director of revenue of Missouri and the tax commission of Missouri, that the act violated Art. X, § 4(a), (b), Mo.Const., as amended. In addition to § 150.010 being a revenue law of this state, this appeal involves the construction of the Constitution of Missouri and, therefore, this court has jurisdiction of the appeal. Art. V, § 3, Mo.Const., as amended.

Plaintiffs-respondents are motor vehicle dealers in Missouri and instituted this suit in circuit court seeking a declaration that § 150.010, as amended by Senate Bill 402 in 1974, is constitutional, and an order directing defendants-appellants to proceed with the taxation of respondents’ motor vehicles and their goods, wares and merchandise held for use and sale in accordance with the provisions of § 150.010, as amended, and to enjoin said appellants from proceeding to tax respondents under the provisions of § 150.010 as it existed prior to the 1974 amendment.

Prior to the adoption of the 1974 amendment, § 150.010 provided:

150.010. Definition of merchant
Every person, corporation, copartnership or association of persons, who shall deal in the selling of goods, wares and merchandise at any store, stand or place occupied for that purpose, is declared to be a merchant. Every person, corporation, copartnership or association of persons doing business in this state who shall, as a practice in the conduct of such business, make or cause to be made any wholesale or retail sales of goods, wares and merchandise to any person, corporation, copartnership or association of persons, shall be deemed to be a merchant whether said sales be accommodation sales, whether they be made from a stock of goods on hand or by ordering goods from another source, and whether the subject of said sales be similar or different types of goods than the type, if any, regularly manufactured, processed or sold by said seller.

Motor vehicle dealers were subject to the same ad valorem property tax as other merchants and the tax on their motor vehicles and their stock of goods, wares and merchandise was computed in accordance with § 150.040 which provides:

150.040. Amount of tax to be paid
Merchants shall pay an ad valorem tax equal to that which is levied upon real estate, on the highest amount of all goods, wares and merchandise which they may have in their possession or under their control, whether owned by them or consigned to them for sale, at any time between the first Monday in January and the first Monday in April in each year; provided, that no commission merchant shall be required to pay any tax on any unmanufactured article, the growth or produce of this or any other state, which may have been consigned for sale, and in which he has no ownership or interest other than his commission.

The phrase “amount of all goods, wares and merchandise” as used in 150.040 means the value in money of those items. That percentage of the value in money which becomes the base against which the tax rate or levy is applied is the “assessed valuation”. Under the provisions of § 137.115, RSMo 1969, as amended 1973 (Laws of Mo. 1973, p. 213), the assessed valuation of real and personal property is a sum equal to 33½% of its true value in money.

In 1974 the general assembly repealed 150.010 and enacted in lieu thereof § 150.-010 (Senate Bill 402) referred to herein as the 1974 amendment. Senate Bill 402, as truly agreed to and finally passed, is set forth in footnote one below.

Article X, §§ 3, 4(a) and 4(b), Mo.Const., provides:

Section 3. Limitation of taxation to public purposes — uniformity—general laws — time for payment of taxes — valuation. Taxes may be levied and collected for public purposes only, and shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax. All taxes shall be levied and collected by general laws and shall be payable during the fiscal or calendar year in which the property is assessed. Except as otherwise provided in this constitution, the methods of determining the value of property for taxation shall be fixed by law.
Section 4(a). Classification of taxable property — taxes on franchises, incomes, excises and licenses. All taxable property shall be classified for tax purposes as follows: class 1, real property; class 2, tangible personal property; class 3, intangible personal property. The general assembly, by general law, may provide for further classification within classes 2 and 3, based solely on the nature and characteristics of the property, and not on the nature, residence or business of the owner, or the amount owned. Nothing in this section shall prevent the taxing of franchises, privileges or incomes, or the levying of excise or motor vehicle license taxes, or any other taxes of the same or different types. ■
Section 4(b). Basis of assessment of tangible property — taxation of intangibles — limitation. Property in classes 1 and 2 and subclasses of class 2, shall be assessed for tax purposes at its value or such percentage of its value as may be fixed by law for each class and for each subclass of class 2. Property in class 3 and its subclasses shall be taxed only to the extent authorized and at the rate
fixed by law for each class and subclass, and the tax shall be based on the annual yield and shall not exceed eight percent thereof. [Emphasis added.]

Article X, § 8, limits the state tax on real and tangible personal property, except for that necessary to pay any bonded debt of the state to ten cents on each hundred dollars assessed valuation. Article X, § 11(b), limits municipalities and counties and school districts to various rates or levies on each one hundred dollars assessed valuation. Article X, § 14, requires the general assembly to establish a commission (state tax commission) to equalize assessments as between counties and to hear appeals from local boards in individual cases and, on appeal, to correct any assessment which is shown to be unlawful, unfair, arbitrary, or capricious.

The constitutional and statutory provisions set forth above are not exhaustive of all laws relating to taxation in this state but are set forth because these provisions bear directly on the issue in this case and because the court is fully aware of the caution set forth in Hull v. Baumann, 345 Mo. 159, 131 S.W.2d 721 (1939), where the court, in construing the validity of a taxing statute said at 726: “An act of the Legislature should not be declared unconstitutional unless it appears beyond a reasonable doubt that it is in contravention of the Constitution.”

All taxes are not subject to the same constitutional limitations or inhibitions. It is, therefore, necessary that the nature of the tax imposed by the 1974 amendment be determined. In Powell v. Gleason, 50 Ariz. 542, 74 P.2d 47, 114 A.L.R. 838 (1937), the court said at 50: “Taxes fall into many different classes, and the tests as to their validity frequently differ in accordance with their nature. The three principal forms now in use are ad valorem property, excise, and income taxes. The phrase ‘ad valorem’ means, literally, ‘according to the value,’ and is used in taxation to designate an assessment of taxes against property at a certain rate upon its value. ... An ad valorem property tax is invariably based upon ownership of property, and is payable regardless of whether it be used or not, although of course the value may vary in accordance with such factor. ... It, for many years, has been the chief, and frequently the only, method of securing revenue for the states and their local subdivisions. An excise tax, on the other hand, is a direct tax laid on merchandise or commodities, ... It may or may not have an ad valorem factor therein. Scholey v. Rew, 23 Wall. (90 U.S.) 331, 23 L.Ed. 99. Income taxes are precisely what the name signifies; taxes based on income in money, gross or net. . . .”

In General American Life Ins. Co. v. Bates, 363 Mo. 143, 249 S.W.2d 458, 462 (1952), this court, in considering the nature of the tax there involved, said: “The instant case involves a property tax, expressly so designated in the constitution, Art. 10, § 4, . . . and made subject to specific constitutional inhibitions. Excises include “‘. . . every form of taxation which is not a burden laid directly upon persons or property; in other words, excises include every form of charge imposed by public authority for the purpose of raising revenue upon the performance of an act, the enjoyment of a privilege, or the engaging in an occupation.” ’ [citing cases.] Excises are not subject to all the constitutional inhibitions applicable to taxes on property. They are valid as revenue measures if they operate alike upon all within the same class of subjects.”

The 1974 amendment, on its face, declares itself to be a property tax on motor vehicles. It undertakes to tax “as a separate class of personal property” motor vehicles and the stock of goods, wares, and merchandise held for use and sale by motor vehicle dealers. It declares that the value of such personal property “is fixed” and assesses a “motor vehicle property tax” at $2.43 on new motor vehicles; $1.50 on used motor vehicles, and $0.57 on goods, wares, and merchandise other than motor vehicles. The tax is imposed at the time of sale or transfer of each motor vehicle. The payment of the tax is to be evidenced by “motor vehicle property tax stamps” affixed to the application for title. All revenues collected under the 1974 amendment are to be apportioned to the appropriate taxing authorities (county, school district, state, etc.), the same as if the revenue were ad valorem property tax revenues, less certain collection costs.

The legislative declaration in the 1974 amendment that the tax imposed thereby is a property tax, and the other provisions of that amendment reflecting the same purpose, makes it clear beyond doubt that it was the intent of the legislature to impose a property tax on the designated tangible personal property. Indeed, one of respondents’ points is that the 1974 amendment can be upheld as a true ad valorem property tax.

The court holds that the 1974 amendment imposes a property tax on the tangible personal property described in the statute.

Because the tax in question is a tax upon property designated as class 2 in Art. X, § 4(a), of our constitution, the tax is governed by the provisions of Art. X, § 4(b), relating to class 2 property (tangible personal property) and subclasses thereof.

Article X, § 4(b) requires that tangible personal property be assessed for tax (property tax) purposes at its value or such percentage of its value as may be fixed by law.

Other provisions of our constitution noted supra place a limitation on the levy or rate that can be legally adopted by the state and other political subdivisions. That limitation is expressed in dollars and cents per one hundred dollars of assessed valuation.

The assessed valuation is a variable which may differ as between various items of taxable personal property, but whatever figure in money that is finally determined to be the assessed valuation, that figure becomes the base against which the levy or rate is applied with the result being the dollar amount of the tax due.

The constitutional scheme for the taxation of property as set forth through Art. X of the constitution requires that there be- a valuation factor, for it is that valuation factor that the taxpayer is entitled to challenge in the local boards of equalization or adjustment and in the constitutionally mandated state tax commission. Art. X, § 14.

In short, Art. X requires that when tangible personal property is taxed there must be an assessed valuation placed upon the property. And, if there is no assessed valuation placed upon the property, then the tax is constitutionally invalid as a direct tax upon tangible personal property under Art. X, § 4(b), of the constitution.

In Robert Williams & Co., Inc., v. State Tax Commission of Mo., 498 S.W.2d 527 (Mo.1973), the court said at 528: “Mo.Const. Art. X, §§ 3 and 4(b), V.A.M.S., which control taxation of all property in Missouri, Boonville National Bank v. Schlotzhauer, 317 Mo. 1298, 298 S.W. 732, 737 (1927), require that all real and tangible personal property be assessed for tax purposes at its value or such percentage of its value as may be fixed by law. This has been held to mean that such property must be assessed on the basis of ‘actual or real value.’ [citing cases.]”

Respondents argue that the designation of motor vehicles held for sale in the usual course of business as a subclass of personal property is authorized by Art. X, § 4(a), (b), and that the legislature itself fixed the value of the property to be taxed in the 1974 amendment. The amendment provides that the property designated therein is “hereby classified as a separate class of personal property and in lieu of ad valorem personal property taxes thereon, the value thereof is fixed and a motor vehicle property tax is imposed thereon as follows . .” (Emphasis added.)

The legislature’s designation of motor vehicles held for sale in the usual course of business as a subclass of class 2 personal property under Art. X, § 4(a), (b), finds general support, in Walters v. City of St. Louis, 364 Mo. 56, 259 S.W.2d 377 (1953), Hull v. Baumann, supra, and Barhorst v. City of St. Louis, 423 S.W.2d 843 (Mo. banc 1967). In other jurisdictions the subclassifi-cation for ad valorem property tax purposes of motor vehicles held for sale by motor vehicle dealers has been upheld. See Wheir v. Dye, 105 Mont. 347, 73 P.2d 209 (1937); Powell v. Gleason, supra, 50 Ariz. 542, 74 P.2d 47, 114 A.L.R. 838, and annotation at 847. .

However, as pointed out in Powell v. Gleason, supra, 74 P.2d at 50, “[i]t is, of course, elementary that in levying a tax having the actual value of certain property as one of its factors, whether it be strictly what is known as a direct property or an excise tax, the owner thereof must, at some time before the tax is irrevocably fixed, have an opportunity, as a matter of right and not of grace, to appear and be heard on the question of valuation before some tribunal which has the jurisdiction to determine the true value of the property. Londoner v. Denver, 210 U.S. 373, 28 S.Ct. 708, 52 L.Ed. 1103; Yuma County v. Arizona & Swansea R. R. Co., 30 Ariz. 27, 243 P. 907, 909.” See also John Calvin Manor, Inc., v. Aylward, 517 S.W.2d 59, 63 (Mo.1974), and 72 Am. Jur.2d, State & Local Taxation § 782.

Under the 1974 amendment, one must recognize that all new and used motor vehicles held for sale by motor vehicle dealers are taxed the same at the time of sale regardless of value. The same tax is assessed against a new 1976 Rolls-Royce as is levied against a new Pinto. The same tax is levied against a 20-year-old-used car with 150,000 miles on it as is levied on a 6-month-old-used car having been driven only 500 miles. Nor does the amount of tax due bear any relationship to the yield or revenue accruing to the business by the sale or use of motor vehicles. The declaration contained in the 1974 amendment that “the value thereof is fixed” sets no value at all.

To fix the value of something must mean that there is a value in money attributed to it. Here, there is no value in money attributed to the property taxed nor is any method set forth to arrive at a value or money base for the computation of the tax. Because there is no money value attributed to the property taxed by the 1974 amendment, the court is not called upon to decide whether the legislature can constitutionally set a fixed dollar amount as the money value of an entire class of property or whether the legislature is restricted by Art. X, §§ 3 and 4(b), to providing the method of determining the value of the property for tax purposes and setting the percentage of the value to be taxed.

The court holds that the 1974 amendment eliminates the value factor from what it declares to be a property tax and is, therefore, constitutionally invalid as a property tax under Art. X, § 4(b).

Respondents seek to uphold the 1974 amendment as a tax “in lieu” of the tangible personal property tax or as a tax of the “same or different” type under Art. X, § 4(a).

In support of their position that the 1974 amendment is valid as a taxing statute “in lieu” of the tax on tangible personal property, respondents rely upon William A. Straub, Inc., v. City of St. Louis, 506 S.W.2d 377 (Mo.1974). In Straub the question decided was whether the city of St. Louis could levy an ad valorem tangible personal property tax on the lessees of certain equipment which equipment was owned by the American National Bank in St. Louis where the bank had paid the taxes assessed against it under § 148.030, RSMo 1969. Section 148.030 imposed a tax of 7% of the bank’s net income and § 148.110 provided that the tax imposed by 148.010 to 148.110 is in substitution for all taxes on tangible and intangible personal property and for all property taxes on the shares of such banking institution. The case did not directly involve the constitutional validity of chapter 148, the Bank Tax Act of 1946, as it applied to banks. In General American Life Ins. Co. v. Bates, 363 Mo. 143, 249 S.W.2d 458 (1952), the court struck down as unconstitutional an “in lieu” statute on the grounds that it exempted all intangible personal property owned by insurance companies from taxation contrary to the provisions of Art. X, § 6, Mo.Const. In the course of deciding the General American case, the court, at 465, set forth the rationale underlying Art. X, § 4(c), Mo.Const., the provision specifically directed to the taxation of banks. In short, the separate provisions in our constitution reference taxation of banks was necessitated by federal laws relating to national banks. This court said that Art. X, § 4(c), recognized that situation and “is not an assumption of the existence of general authority in the lawmakers to enact substitute tax legislation in contravention of specific constitutional inhibitions.”

Straub, when considered in the light of Art. X, § 4(c), Mo.Const., and General American Life Ins. Co. v. Bates, supra, does not support respondents’ position in this case.

Respondents point to the “Private Car Tax”, chapter 152, RSMo Supp.1973, which imposes a tax of 3% on the total amount received for the rental of certain railroad cars in Missouri, as an example of a tax in lieu of a tangible personal property tax. The constitutionality of chapter 152 is not before the court in this case. Nevertheless, it is to be observed that chapter 152 provides a method of arriving at a value in money base for personal property, railroad cars, which is representative of the value of the use of those cars in Missouri to the taxpayer and sets the rate to be applied against that base.

In other words, the legislature, acting pursuant to Art. X, § 3, has provided the method of determining the value of the property (railroad cars) for taxation purposes.

The 1974 amendment to § 150.010 provides no method for determining the value of the property for taxation but simply eliminates the value factor altogether from a tax denominated a motor vehicle property tax. This is not permissible under Art. X, § 4(b).

If the 1974 amendment is a tax “in lieu” of the property tax, then it is not a property tax. The same is true if it is a tax of a different type.

The 1974 amendment must stand or fall as a property tax on motor vehicles. This is so because of other parts of the 1974 amendment set forth supra wherein the legislature clearly mandated that the proceeds of this tax are to be apportioned to the appropriate taxing authorities of the county and the state on the same basis as if the revenue were ad valorem taxes.

All parties agree and the 1974 amendment makes clear that the tax imposed thereby is a tax upon motor vehicles.

Art. IV, § 30(b), Mo.Const., as amended in 1962, provides in part:

Section 30(b). Source and application of state highway funds. For the purpose of constructing and maintaining an adequate system of connected state highways all state revenue derived from highway users as an incident to their use or right to use the highways of the state, including aII state license fees and taxes upon motor vehicles, trailers and motor vehicle fuels, and upon, with respect to, or on the privilege of the manufacture, receipt, storage, distribution, sale or use thereof (excepting the sales tax on motor vehicles and trailers, and all property taxes), . . . shall be credited to a special fund and stand appropriated without legislative action for the following purposes, and no other . . . . [Emphasis added.]

If the tax imposed by the 1974 amendment is not a constitutionally valid property tax, and the court has held supra that it is not, and if it is not a sales tax, which it obviously is not, then the revenue derived from this tax on motor vehicles constitutionally stands appropriated to the state highway fund for the designated highway-related purposes set forth in Art. IV, § 30(b) of our constitution. Those purposes do not include the general support of the various taxing authorities or the state of Missouri. Therefore, even if the taxing portion of the 1974 amendment could be upheld as a type of tax other than a property tax, the legislative scheme set forth in the 1974 amendment as to the distribution of the revenues derived therefrom could not be accomplished in view of Art. IV, § 30(b), Mo.Const., as amended. If the 1974 amendment were a constitutionally valid property tax, the provisions of the act with respect to the allocation of the revenues would present no problem for property and sales taxes are excepted from the requirements of Art. IV, § 30(b), supra.

The legislature designated the tax imposed by the 1974 amendment to be a property tax on a subclass of tangible personal property (certain motor vehicles). The court holds that the tax imposed is unconstitutional as a property, tax under Art. X, § 4(b), Mo.Const., for the reasons stated supra.

The tax cannot be upheld as some other type of tax and at the same time give effect to the other provisions of the 1974 amendment, reference distribution of the revenues, in view of Art. IV, § 30(b), Mo. Const., as amended.

There is no basis upon which it could be said that the legislature would have repealed § 150.010 as it existed prior to the 1974 amendment and have enacted the taxing portion of the amendment without also requiring that the revenues be distributed to the same taxing authorities which receive the revenues from ad valorem tangible personal property taxes.

Respondents argue that there are gross inequities in the assessment of new and used cars and the stock of goods, wares, and merchandise held for use and sale by motor vehicle dealers. Whatever the inequities may be, they cannot be corrected by unconstitutional means.

The judgment is reversed and the cause is remanded to the circuit court with directions to vacate its judgment and orders previously entered and to enter judgment holding Senate Bill 402 of the 77th general assembly, the 1974 amendment to § 150.010, RSMo 1969, unconstitutional in its entirety.

All concur.

      . Be it enacted by the General Assembly of the State of Missouri, as follows :

      Section A. Section 150.010 RSMo 1969, is repealed and two new sections enacted in lieu thereof to be known as sections 150.010 section 1 and section 2.
      150.010. 1. Every person, corporation, copartnership or association of persons, except motor vehicle dealers as defined in this act, who shall deal in the selling of goods, wares and merchandise at any store, stand or place occupied for that purpose, is declared to be a merchant. Every person, corporation, copartnership or association of persons doing business in this state shall, as a practice in the conduct of such business, make or cause to be made any wholesale or retail sales of goods, wares and merchandise to any person, corporation, copartnership or association of persons, shall be deemed to be a merchant whether said sales be accommodation sales, whether they be made from a stock pf goods on hand or by ordering goods from another source, and whether the subject of said sales be similar or different types of goods than the type, if any, regularly manufactured, processed or sold by said seller.
      2. The term “merchant” includes motor vehicle dealers as defined in this act, but motor vehicle dealers shall not be subject to any ad valorem tax on his stock of goods, wares and merchandise, as otherwise prescribed by this chapter and a motor vehicle property tax as prescribed by this act shall be levied in lieu of such ad valorem tax.

        Section 1. As used in this act, unless the context clearly requires otherwise, the following terms mean:
      (1) “Motor vehicle dealer” any person, firm, corporation, copartnership or association of persons primarily engaged in the business of selling motor vehicles, except farm tractors.
      (2) “Motor vehicle” any vehicle propelled by an internal combustion engine and licensed for operation or operated upon the highways, but shall not include farm tractors.
      (3) “Dealer” any person, firm, corporation, copartnership or association of persons or their agents or subagents engaged in the sale or exchange of new, used or reconstructed motor vehicles.
      2. Motor vehicles and the stock of goods, wares and merchandise held for use and sale by motor vehicle dealers in the ordinary course of their business are hereby classified as a separate class of personal property and in lieu of ad valorem personal property taxes thereon, the value thereof is fixed and a motor vehicle property tax is imposed thereon as follows:
      (1) New motor vehicles
      2.43 Dollars, ($2.43).
      (2) Used motor vehicles
      1.50 Dollars, ($1.50).
      (3) Goods, wares, and merchandise other than motor vehicles
      0.57$ Dollars, ($0.57).
      3. (1) The tax on new motor vehicle and on goods, wares and merchandise, other than motor vehicles, shall be imposed at the time of sale or transfer of each new motor vehicle. The tax on used motor vehicles shall be imposed at the time of sale or transfer of each used motor vehicle.
      (2) No tax shall be imposed on the sale or transfer of any motor vehicle from one dealer to another dealer.
      (3) The tax computed by Subparagraph 3 of Subsection 2 of Section 1, above, is a per unit tax on each new motor vehicle.
      4. The tax imposed shall be paid by the motor vehicle dealer and shall not be charged directly to the purchaser.
      5. The payment of the motor vehicle property tax imposed by this act shall be evidenced by a tax stamp which shall be affixed by the dealer to each application for title at the time of sale, and no motor vehicle purchased in this state from a dealer licensed in this state may be registered with the department of revenue unless the tax stamp is so affixed.
      6. (1) The motor vehicle property tax stamps required by this act shall be purchased or manufactured by the director of the department of revenue in the required amounts. The stamps shall be of such design, color combination and material as the director shall deem necessary and he shall provide how the stamps shall be affixed to the application for title. The director may require any manufacturer of the stamps to furnish a bond in any amount he deems necessary.
      (2) The director of revenue shall distribute the motor vehicle property tax stamps to the county collector of each county and the license collector of the city of St. Louis, taking such receipt therefore as may be necessary, and the county collector and the license collector of the city of St. Louis shall have the responsibility of the custody and sale of the stamps and shall have the duty of accounting for the stamps to their respective counties.
      (3) All motor vehicle dealers shall purchase the motor vehicle property tax stamps from the county collector of the county and the license collector of the city of St. Louis where the dealer’s place of business is located.
      7. The county collector and the license collector of the city of St. Louis shall, at the end of each month apportion all collections from the sale of the motor vehicle property tax stamps to the appropriate taxing authorities within his county and to those of the state of Missouri on the same basis as if the revenue were ad valorem tax revenues minus two percent which shall be remitted to the department of revenue to reimburse the state for the cost of the stamps and enforcement involved, and minus two percent which shall be retained by is office for the cost of handling the transactions required to administer this tax.
      8. All revenues collected by the county collectors and the license collector of the city of St. Louis under the provision of this act, less two percent which is to be returned to the department of revenue to reimburse the state for the cost of the stamps, and less two percent which shall be released by the county collector and the license collector of the city of St. Louis for handling the stamps and the tax, shall be deposited by him in the county treasury. On or before January first of each year the county collector and the license collector of the city of St. Louis shall submit a statement to the county treasurers and the treasurer of the city of St. Louis of the exact amount due each political subdivision and to the state of Missouri as determined by applying the local rates of property tax levy to the revenues collected taking into account the proportion each tax rate bears to all others within the county. The several county treasurers and the treasurer of St. Louis city are hereby directed to distribute, prior to February 1 of each year, all amounts so received from the county collector and the license collector of the city of St. Louis according to the allocations made in his statement.
      Section B. The Director of Revenue shall have the power to revoke or suspend the license of any dealer who willfully fails or refuses to affix the tax stamps herein provided to the application for title in the manner provided in Section 301.430, RSMo, and shall provide by regulation the manner in which an application for title shall be processed should a dealer fail, refuse or neglect to affix said tax stamps.
      Section C. The provisions of this act shall become effective on January 1, 1975. [Emphasis added.]

      . Sec. 137.115, RSMo 1969, as amended 1973, now provides for the assessment of real and tangible personal property to be 33 ‘/3% of its true value in money.

      . Sec. 148.110 was amended in 1972 so as to permit to taxation of tangible personal property held for lease or rental to others. Straub involved an assessment for the year 1970.


author: PER CURIAM:

text:
    Kay DREY et al., Appellants, v. Gene McNARY, St. Louis County Supervisor, et al., Respondents.
    No. 58867.
    Supreme Court of Missouri, En Banc.
    Nov. 10, 1975.
    Rehearing Denied Dec. 8, 1975.

      Lewis C. Green, St. Louis, for appellants.
    Thomas Wehrle and Morton Golder, and George W. Lang, II, Wayne B. Wright, Clayton, for respondents.
   PER CURIAM:

In this action plaintiffs sought both a declaratory judgment and an injunction relative to (1) the use that may be made of the proceeds of general obligation bonds and revenue bonds approved by the people of St. Louis county for public parks and recreational facilities purposes; and (2) the validity of pledges by the County of (a) specified revenues to payment of the revenue bonds, and (b) other revenue in general to payment of the cost of operating and maintaining the recreational facilities. The trial court granted part of the relief requested, but denied other parts and from that part of the judgment plaintiffs appealed to the Court of Appeals, St. Louis District. The case was transferred to this court for review after an opinion had been filed in the court of appeals. We utilize parts of the opinion of that court.

Plaintiffs are residents, property owners and taxpayers of St. Louis county and active members in organizations interested in preserving open space and parks in the county. The defendants are the Supervisor, the Director of Parks and Recreation, and the members of the County Council of St. Louis County.

In early 1969 plaintiffs and defendants were allies actively supporting the approval of two bond issues by the voters of St. Louis county. Those bond issues, approved at an election held June 3, 1969, were for the purpose of acquiring new park sites in the county and the erection of certain new recreational facilities. One proposition authorized general obligation bonds; the other revenue bonds. As submitted to the voters, the two bond issues were:

PROPOSITION NO. 2
Proposition to issue the bonds of St. Louis County, Missouri, to the amount of NINETEEN MILLION, THREE HUNDRED EIGHTY THOUSAND DOLLARS ($19,380,000) to provide funds for the purpose of purchasing, improving, and equipping lots, tracts and parcels of ground, and land to be used as public parks and playgrounds and for recreational purposes.
PROPOSITION NO. 3
Proposition to issue Public Recreation System Revenue Bonds of St. Louis County to the amount of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) to provide funds for the purpose of establishing, equipping and developing a system of public recreation, including parks and other recreational grounds, playgrounds, recreational centers, swimming pools and any and all other recreational areas, facilities and activities; said bonds to be payable, both principal and interest, from revenues to be derived from the facilities acquired through the issuance of said bonds.

The route by which these propositions reached the ballot is pertinent. Under the St. Louis County Charter the Supervisor is required to submit to the County Council a budget, a capital program and an accompanying message. The capital program “shall contain at least (1) a clear, general summary of the program, (2) the capital improvements pending and proposed to be undertaken during the five fiscal years next ensuing, together with the estimated cost of each improvement and the pending or proposed method of financing it, * * *.” (Emphasis supplied.)

Pursuant to this directive, the Supervisor on March 27, 1969, submitted to the County Council a summary of the proposed St. Louis County Capital Improvement Program for the years (presumably fiscal) 1970 through 1974. Under the proposals for parks and recreational facilities was a recommendation for $19,348,734 in general obligation bonds to (1) acquire seven new parks ($11,278,950), (2) acquire approximately 800 acres of land to be utilized for three eighteen-hole golf courses ($4,305,-779), and (3) improve existing parks ($3,764,005). Also included was the statement: “To develop these golf courses, plus three ice-skating/hockey rinks, and three swimming pools for all the people of St. Louis County, an issue of $5,484,060 in revenue bonds is proposed. The people who use these facilities would pay the cost of the bonds with ‘user-fees.’ ” Listed among the “New Parks” was what is known as the Queeny Tract. Listed as a proposed public golf course was the Northwest Golf Course site (to include golf course, swimming pool, ice-skating/hockey rink) located some considerable distance north and east of the Queeny Tract.

In the letter of transmittal accompanying the summary the Supervisor recommended that the “County Council take the necessary legislative action” to place the proposed bond issues on the June 3, 1969, ballot. This letter of transmittal again delineated between the general obligation bonds of $19,380,000 for acquisition of new parks and land for recreational complexes and the revenue bonds of $5,500,000 to develop golf, ice-skating/hockey rink and swimming pool facilities on land acquired with the general obligation bonds.

On April 24, 1969, the County Council, pursuant to the Charter, passed ordinance 5040 which called a special election on June 3, 1969, to authorize the general obligation and revenue bond indebtedness. The first paragraph of that ordinance begins:

“WHEREAS, the County Supervisor in a report dated March 27, 1969, recommended to the County Council that an election be held in said County to authorize the incurring of indebtedness and the issuance of General Obligation bonds of said County in the following amounts for the following purposes, to-wit: .
“NINETEEN MILLION, THREE HUNDRED EIGHTY THOUSAND DOLLARS ($19,380,000) to provide funds for the purpose of purchasing, improving, and equipping lots, tracts and parcels of ground, and land to be used as public parks and playgrounds and for recreational purposes.”

The second paragraph read in part:

“WHEREAS, the aforesaid report of the County Supervisor recommended that at an election to be held in said County a proposal be submitted to authorize the issuance of Public Recreation System Revenue Bonds of said County in the following amount for the following purpose, to-wit:
“FIVE MILLION, FIVE HUNDRED THOUSAND DOLLARS ($5,500,000) to provide funds for the purpose of establishing, equipping and developing a system of public recreation . . .

Plaintiffs introduced voluminous evidence that prior to the election an extensive publicity campaign was conducted in support of the bond issues. Citizens groups, environmental groups and county officials were part of this campaign. We need not review the evidence in detail other than noting that Proposition 2 was treated in the campaign as bonds for the acquisition of land for parks and improvement of existing parks. Proposition 3 was treated as bonds for development of three ice-skating/hockey rinks, three golf courses and three swimming pools to be paid for by users at “no cost to taxpayer.”

Following the election a feasibility study of the potential market for the revenue bonds was made. The results were discouraging at best. It was determined that the market for revenue bonds backed only by the income from county recreational facilities was poor and, if salable at all, required a high rate of return. The record warrants the conclusion, that faced with this financial picture and cognizant of the desires of the electorate as evidenced by the election, the county administration sought ways to improve the marketability of the bonds by increasing their security. The ultimate result encompassed several proposals.

The Queeny Tract of 569 acres was acquired by the county with general obligation bond money. A master plan for the development of that site had been prepared for the county by Sverdrup and Parcel and Associates, Inc., engineers, architects and planners. That plan called for development on the Queeny Tract of a family recreational center. Included would be an 18-hole golf course, an ice-skating arena, a swimming pool, clubhouse, children’s play area, tennis courts and parking. In addition a large area of the tract containing a hardwood forest would be left in its natural state for hiking, picnicking, and other similar activities. In contemplation of development of the site in accord with the master plan of Sverdrup and Parcel, and conditioned upon such development, Mrs. Edgar Queeny entered into a contract for gift with St. Louis County: In exchange for her gift of $1,000,000 the county promised (1) to name the park after the donor’s husband, (2) to procure from another donor at least $1,000,000 to defray development costs, and (3) to appropriate from the 1969 Park Bond Issue Fund (the general obligation bonds) $1,800,000 as the county’s portion of the costs of development of Phase I of the master plan. The second $1,000,000 gift was obtained from the private Greensfelder Foundation. The recreational complex in Queeny Park would take the place of one of the three recreational centers originally proposed in the Capital Improvement plan.

Thereafter, the County Administration developed a prospectus relating to the proposed sale of the $5,500,000 in revenue bonds authorized by Proposition 3, which prospectus was furnished to potential bidders on the bonds. Contained therein are the following statements:

(1) “All costs of . engineering, and architectural fees [for the three recreational complexes] have been paid or will be paid from the General Obligation bonds (2) “The County will pay for the construction and operating costs of the ice rink and swimming pool facilities . . ” at Queeny Park; (3) “the gross revenues of all three golf, ice and swimming facilities will be pledged for the payment . . . ” of the revenue bonds; (4) “The County will make up any deficit from other funds available”; (5) as to Queeny Park “Architectural and engineering fees of $265,000, equipment costing $200,000 and an estimated $2,800,000 for constructing the ice rink, swimming facilities, tennis courts and an elaborate creative children’s playground are being provided from General Obligation bond proceeds and contributions”; and (6) “The Queeny County Park Ice Rink and Swimming Pool will require no Revenue Bond monies for construction; the county will also pay the operating expenses for these facilities out of the regular Operating Fund (Park Maintenance Fund) * * * The revenues from the ice rink and swimming pool, however, will be used to service the debt on the $5,500,000 Revenue Bond Issue, * *

The ordinance embodying the scheme of financing and authorizing issuance and sale of the revenue bonds, drafted by its attorneys for adoption by the County Council (and which we may conclude would have been adopted but for this suit), provided that the county covenanted with the purchasers (1) that it would operate and maintain these recreational facilities as long as any of the bonds were outstanding and unpaid; and (2) that it would pay the cost of operating and maintaining these facilities from any county funds (including tax monies) available for that purpose, it having pledged the gross revenues produced by these facilities to payment of principal of and interest on the bonds.

A brief analysis of the original plan submitted to the voters and a statement of the nature of general obligation and revenue bonds may be useful.

As initially proposed the citizens were to vote on two separate but related proposals. The first was for the acquisition of extensive park land and certain improvements to existing parks. This land and those improvements were to be financed by general obligation bonds of the County which in turn imposed upon the electorate an increase in taxes to service and retire the bonds. The Capital Improvements Program, the Supervisor’s letter, and the publicity listed the proposed land to be acquired and the improvements to be made. All evidenced the concern that available space for park sites was rapidly disappearing in St. Louis county and that such space had to be acquired immediately or it would be forever lost. Included in this proposal was the land for development of three family recreational areas, the sites of which were not specifically described but were indicated as additional to the park sites specifically described. The Queeny site was listed as a park site specifically described.

The second proposition was for the development of the three recreational areas proposed to be built upon land acquired through the first proposition. These developments were each to include a swimming pool, skating rink and golf course. Whereas, the parks were intended to be free to the public, the pools, rinks and golf courses were not. It was therefore contemplated that those facilities would be constructed with revenue bonds which would be retired from the fees charged the users of those facilities. The Capital Improvement Program, the Supervisor’s letter, and the publicity before the election indicated that development of these facilities would be at no cost to the taxpayer. While the proposals were related they were not interdependent; the electorate could adopt both, neither or either. Adoption of the general obligation bond proposal would authorize acquisition of the park sites even though development of recreational complexes on some of them were rejected by defeat of the revenue bond issue. Adoption of the revenue bond issue would authorize development of recreational complexes upon whatever land was available to the county even if the acquisition proposal were defeated.

General obligation bonds are just what the term implies: general obligations of the governmental body issuing them. They, place the general credit of the sovereign behind them and are an indebtedness of that sovereign within the meaning of Mo.Const. Art. VI, § 26, restricting the limits of debt which a county may incur. They require tax money to service and retire them. Revenue bonds do not have these characteristics. Their repayment is dependent upon revenue from the facility which they are issued to create. They do not rely upon the general credit or tax money of the sovereign and they are not indebtedness within the limitations of the constitution. State ex rel. City of Hannibal v. Smith, 335 Mo. 825, 74 S.W.2d 367 (1934); City of Lebanon v. Schneider, 349 Mo. 712, 163 S.W.2d 588 (1942).

There are at least two practical reasons why a political subdivision may select revenue bonds rather than general obligation bonds to finance a given project. One is the indebtedness limitation of the constitution. The other is the greater willingness of the electorate to approve projects where no increase in taxes will occur as a result. For this latter reason projects which are of lesser urgency, value or use to substantial portions of the electorate can be created through user-fee revenue bonds, when they would be unable to command sufficient electoral support if financed by all taxpayers.

Plaintiffs’ major contentions are: (1) placing a recreation center in Queeny Park is unlawful; (2) development of the swimming pool and skating arena in Queeny Park with general obligation bond money is unlawful; (3) the pledge of the park maintenance fund (tax monies) to operate and maintain the pool and rink at Queeny Park is unlawful; (4) the pledge of gross revenues of all three recreational facilities (including those at Queeny) to the payment of the revenue bonds and any pledge to pay the cost of operating and maintaining these facilities from the park maintenance fund so long as any of the revenue bonds are outstanding is unlawful.

We are unable to conclude that the proposal to locate a recreational center in Queeny Park is contrary to law or that it is contrary to the propositions voted by the people. It is true that the original plans called for acquisition of a site other than Queeny Park for the location of a recreational center. But Proposition 2 as submitted to the voters did not specify what land would be acquired; nor did Proposition 3 specify the location of the recreational sites. There is no evidence of fraud or misrepresentation or that the original plans did not represent the intentions of the County Administration at the time they were prepared or the election was held. It is unrealistic to require that every facet of a proposed plan for the expenditure of bond issue money be inflexibly adhered to, unless that facet is specifically submitted as a part of the proposition itself upon which the people vote. Inflation, unavailability of a particular tract, excessive land costs, unexpected gifts, relocation of access roads, industrial, commercial or residential development, or many other causes may make the original plans impractical, unfeasible, impossible or simply not the best plan when implementation actually begins. The courts have not required inflexibility so long as the purposes for which the bonds were voted are adhered to. St. Louis County v. State Highway Commission, 409 S.W.2d 149 (Mo.1966); Petition of the City of St. Louis, 363 S.W.2d 612 (Mo. banc 1963); Thompson v. City of St. Louis, 253 S.W. 969 (Mo.1923).

Proposition 2 provided for the acquisition of land for use as parks and playgrounds and for recreational purposes. The Queeny Tract was acquired from the proceeds of that bond issue for those purposes. Proposition 3 provided for development of recreational facilities, without regard to location, of the type now proposed for Quee-ny. Location of such a complex in Queeny is not contrary to either proposition. The two million dollars in gifts upon location of these recreational facilities in Queeny represented a benefit to the citizens of the county which the administration was bound to consider. The master plan for the development of Queeny proposes a park with a far broader range of recreational facilities than simply leaving the park in its natural state as plaintiffs apparently suggest. Much of the park is to be left in its natural state for those citizens who want that type of recreation. But the County Administration may properly consider that not all, and maybe not even most, of its citizens are interested in the type of recreation plaintiffs are. Golf courses, swimming pools, ice-skating rinks, tennis courts and children’s play areas are also recreational facilities which by common knowledge are frequently found in municipal and county parks. To include them in Queeny is not, as plaintiffs contend, to deprive the people of their regional park.

Nor do we find any merit to plaintiffs’ contention that the proposed plan is to develop a country club for the wealthy. Aside from the fact that the wealthy are also taxpayers and citizens, there is no fact basis for plaintiffs’ conclusion. Queeny is located in a section of the county which has a higher than average per capita income. But plaintiffs are not quarreling with the acquisition of Queeny as a park site; in fact, they wholeheartedly favor it. The area is readily accessible by major highways which connect with arterial highways servicing the entire county. The facilities objected to will be available at costs comparable to those at other public facilities. There is no basis to conclude that the development will be used by any limited segment of the county population. The development of Queeny as proposed is within the scope of the propositions submitted, and is a permissible development of the land acquired.

The use of the general obligation bond money is limited to the purposes for which it was voted. Such money is similar to trust money and may be utilized within the scope of the proposition approved by the people but not beyond. Thompson v. City of St. Louis, supra. Respondents urge us to look to the wording of Proposition 2 alone and conclude that it is sufficiently broad to encompass the building or development of skating rinks or swimming pools. Proposition 2 provides funds for “purchasing, improving and equipping” land for “parks, playgrounds and for recreational purposes.” Whether this language, standing alpne, would authorize use of general obligation bond money for development of the swimming pool or skating rink we need not decide. We cannot ignore the fact that Proposition 2 and Proposition 3 were submitted to the people together. Grossman v. Public Water Supply Dist. No. 1 of Clay County, 339 Mo. 344, 96 S.W.2d 701 (1936). In construing the meaning of Proposition 2, not only is the existence of Proposition 3 relevant, but the legislative history which resulted in the propositions being placed on the ballot is also relevant. City of St. Louis v. Pope, 344 Mo. 479, 126 S.W.2d 1201 (1938). The ultimate question is what did the voters approve and any doubts must be resolved in favor of the taxpayers. State ex rel. State Building Commission v. Smith, 336 Mo. 810, 81 S.W.2d 613 (1935).

We conclude that the propositions as submitted did not contemplate the use of general obligation bond money to construct swimming pools, skating rinks or golf courses. While the language of Proposition 2 is broad the words “improve” and “equip” connote a lesser expenditure than the word “develop” used in Proposition 3. Proposition 2 deals predominantly with the acquisition of land for parks. Proposition 3 deals with the development of a “system of public recreation” including specifically “swimming pools.” Because it contemplated revenue bonds to be paid from the facilities acquired, Proposition 3 obviously dealt with a type of facility where a charge for use would be imposed. The record demonstrates that the county was not in a position where it was required to issue revenue rather than general obligation bonds because of constitutional limitations on its indebtedness. The record rather supports the conclusion that revenue bonds were proposed because the facilities contemplated were of the type for which general taxpayer support is difficult to achieve unless the cost is borne by those using the facilities. The Supervisor’s Capital Improvement Plan and his transmittal letter requesting the election clearly evidenced the intention that the proposed golf courses, pools and rinks were to be financed through user-fees, not by taxes. These documents also evidenced the intention that the general obligation bonds were to finance land acquisition and limited improvements to the land acquired and to existing parks. The facilities acquired through the general obligation bonds were, by their very nature, the type in which revenue financing would be improbable, if not impossible. These documents furnished by the Supervisor were specifically referred to in the ordinance submitting the bonds to the electorate, and the amounts of bonds covered by each proposition were the same as those proposed by the Supervisor. The publicity campaign, which is a part of the history of the election (See City of St. Louis v. Pope, supra) clearly indicated that the pools, rinks and golf courses were to be built with Proposition 3 money at no cost to the taxpayer. There is no serious contention that at the time of the election this was not the plan.

However broadly the language of Proposition 2 was worded, the legislative history and the wording of Proposition 3 clearly establish that the golf courses, rinks and pools were not included within Proposition 2. Funds from that Proposition were not for those purposes and may not now be so used. We cannot speculate nor presume that the voters would have approved Proposition 2 had they believed or had reason to believe that their taxes would be used to construct these facilities.

The provisions of our constitution and statutes requiring voter approval before certain substantial increases in taxes can be effected, serve a salutary purpose and reflect the intention of the people to retain to themselves a control over taxing power. It is imperative that when voters are asked to levy taxes against themselves they understand that the taxing body and the courts will limit use of funds to the purpose voted. The conclusion is inescapable that the pools, rinks and golf courses were not to be built with Proposition 2 money and the tax increase approved under that Proposition was for purposes other than those three items. Perhaps unnecessarily, we emphasize the distinction between a change of plans to effect the purpose (the issue presented in the first contention) and a change of the purpose itself (the issue presented in the second contention).

Plaintiffs seek to enjoin the use of general obligation funds to create the recreational facility at Queeny. This record does not support such relief, for it does not establish that use is proposed or contemplated. We must point out that all we have held is that Proposition 2 money is not usable to construct a rink, pool or golf course. We, of course, have in no way held that such pool or rink must be built solely with Proposition 3 funds; only that it cannot be built with Proposition 2 money. Nor have we held that Proposition 2 money may not be used to improve or equip Queeny (or any other park) with facilities other than the three (rink, pool and golf course) specifically exempted from Proposition 2 by the legislative history and Proposition 3. Both propositions are broadly worded and it may well be that certain types of recreational facilities can be created under either or both. The Queeny Contract for Gift and the Prospectus both indicate that the County proposes to use the two million dollars in gifts and some additional general obligation funds for development of the park site in accordance with Phase I of the master plan. Phase I contemplates more than the pool, rink and golf course. It also includes items not exclusively covered under Proposition 3 such as tennis courts, parking, roads, etc. The gifts are not Proposition 2 funds and may be used for whatever public purpose their donors direct, including a pool and rink. We have no basis on the record before us for determining that general obligation funds will be used for the rink or pool rather than for other permissible equipment or improvements.

Plaintiffs’ contentions (3) and (4) are closely related and may be considered together. They present the ultimate question of whether without the approval of the electorate the County may, in support of the revenue bond issue, obligate itself now to pay from tax funds in future years any part of the cost of operating and maintaining the recreational facilities (golf course, ice-skating/hockey rink and swimming pool) at the three parks during the life of the bonds.

Plaintiffs do not contend that the revenue bond issue is invalid for these reasons and they do not ask that it be declared void or that the sale be enjoined; they ask merely for a declaratory judgment as to the validity and enforceability of this pledge or obligation in support of the revenue bond issue.

Plaintiffs argue that this obligation of tax funds violates Mo.Const. Art. VI, § 26(a). We agree. This provision of the constitution authorizes the obligation of current revenues to the extent of the income during the year a debt is created, but it prohibits the anticipation of the revenues of any subsequent years without authority from the electorate. Trask v. Livingston County, 210 Mo. 582, 109 S.W. 656, 659 (1908). An undertaking by the county to operate and maintain these facilities with its general revenue for the life of these bonds would create a present indebtedness and obligate the county to levy taxes in subsequent years for its payment. It is not a contingent obligation. For these reasons the provision in the ordinance that the county agrees to pay the cost of operating and maintaining these recreational facilities so long as any of the bonds are outstanding and unpaid is void and unenforceable. Scroggs v. Kansas City, 499 S.W.2d 500 (Mo.1973); Wunderlich v. City of St. Louis, 511 S.W.2d 753, 756[1] (Mo. banc 1974).

Plaintiffs raise several other points which will be discussed briefly. We cannot find objectionable the use of general obligation bond money for architectural and engineering studies on the recreational sites. Those sites were acquired with general obligation bond money and part of the development may well include items other than the pools, rinks and golf course. Use of that money is not contrary to the propositions voted.

Plaintiffs have leveled an attack upon the motives and good faith of the county administration. Such an attack is wholly unsupported by the record. The use and financing of bond issue projects is certainly not free from doubt legally. The record here warrants only the conclusion that the county administration, faced with an economic picture detrimental to the revenue bond project, attempted to carry out the expressed will of the electorate to build the recreational centers.

Plaintiffs ask also that the court issue a broad direction concerning availability of public records. Such an order is beyond the scope of this proceeding and would be an advisory opinion. If violations of § 109.180 RSMo 1969 should occur at some time in the future, there are courts and remedies available.

Respondents’ motion to dismiss appeal, taken with the case, is overruled.

Plaintiffs’ contention that they are entitled to recover taxable costs both on appeal and in the trial court has merit. The suit was filed by plaintiffs in the public interest on behalf of themselves and all other citizens and taxpayers of the county interested in the development and financing of public parks. The trial court, recognizing that plaintiffs had prevailed in that court on a small portion of the major issues, apportioned the costs, one-fourth against defendants and three-fourths against plaintiffs. As a result of review by the court of appeals and by this court, plaintiffs have prevailed in all but one of the major issues presented by them. Plaintiffs are the prevailing parties within the meaning and intent of §§ 514.060 and 514.160, RSMo 1969, and should recover all the taxable costs, the amount thereof to be determined by the trial court and expressed in the judgment entered upon remand of this case. Underwood v. Oregon County, 320 Mo. 514, 8 S.W.2d 597, 598[3] (1928); Hart v. T. L. Wright Lumber Co., 355 Mo. 397, 196 S.W.2d 272, 278[6, 7] (1946).

The judgment that “the recreational center as now proposed may be built within the confines of Queeny Park” is affirmed; the remainder of the judgment, except the two parts not appealed from by defendants (referred to in footnote 2), is reversed. The cause is remanded with directions that the trial court enter judgment consistent with this opinion.

All concur.

      . We take judicial notice of the Charter. See Giers Imp. Corp. v. Investment Service, Inc., 361 Mo. 504, 235 S.W.2d 355, 358[4] (1950); State ex rel. Union Electric Co. v. University City, 449 S.W.2d 894 (Mo.App.1970).

      . The trial court ordered stricken this and any like representations pledging the general credit of the county to the revenue bonds. The County has not appealed from this part of the decree.
      The decree also ordered that plaintiffs have the right to inspect at reasonable times the feasibility study and prospectus pertaining to the revenue bonds and referred to in the pleadings and evidence. The County also has not appealed from this part of the decree.

      . The record is unclear of what this $2,800,-000 is composed. Under the Queeny gift $1,000,000 was to be from Mrs. Queeny, $1,000,000 from another donor (Greensfelder) and $1,800,000 from proposition 2 bonds or a total of $3,800,000. ■

      . There is no contention that the county intends to utilize general obligation bond money for the Queeny Park golf course so we deal specifically only with the rink and pool.