In the past month there have been several legal issues regarding the use of referenda in municipalities. The following articles demonstrate the various uses of referenda by the voters, including actions which may be taken pursuant to voter referenda and the effect of referenda passed by the voters in view of Illinois Constitutional provisions controlling the subject.

Most recently the Court of Appeals for the Second District reviewed two trial court decisions from the City of Rockford. The facts were similar in each of the cases in that the sole issue for consideration was whether taxes enacted pursuant to home rule powers continue to remain effective even though a referendum to repeal the city's home rule status is subsequently passed by the voters. In the first case, Royal Liquor Mart, Inc. v. City of Rockford, 479 N.E.2d 485, 88 Ill. Dec. 872 (1985), certain retail store owners filed an action to prevent the city from collecting its 1% sales tax which was enacted under home rule powers. The store owners contended that because the voters approved a referendum repealing the city's home rule powers, taxes enacted pursuant to home rule were also repealed.

In response the City filed a counter claim contending that elimination of the 1% sales tax would impair contractual obligations of the City since some of the tax was earmarked to fund "any operating deficit" of the Rockford "Metro Centre," an exposition building which was to be constructed. (The Expo Authority had issued bonds to fund development and the City agreed to enact the 1% sales tax pursuant to the terms of an inter-governmental agreement between the City and the Expo Authority.) The trial court ruled in favor of the defendant city and upheld collection of the tax. The store owners appealed and the Court of Appeals concluded that the referendum by the voters which repealed the City's home rule powers did not, in effect, also repeal the City's 1% sales tax passed pursuant to the City's home rule powers. The Court reasoned,

"if a referendum repealing home rule status is viewed as repealing all the ordinances and commitments made by the municipality during the time of its home rule status, then the municipality could not make long-term commitments, and the electorate could not rely upon home rule solutions to problems without fear that the solution will be invalidated at some point in the future. The concept of home rule would certainly he altered and much weakened" (Royal Liquor Mart, Inc. v. City of Rockford, 4-9 N.E.2d 485, 88 Ill.Dec. S72 at 877 [1985]).

The Court also distinguished the authoritative act of "levying a tax" from that of "collecting the tax". The Court found that because the tax was levied at a time when the City of Rockford had the authority to levy there is no reason to presume that the subsequent referendum repealing home rule authority invalidates future collection of the tax. In the Courts' opinion, the vague language of the ordinance which allowed the City to find other sources of revenue to fund operating deficits if the sales tax were ever declared invalid, "infers that the City has some unlimited source of revenue which it can tap into to replace the revenues it would have collected from the sales tax". The Court reasoned that the opposite would occur since loss of home rule status would severely curtail the city's ability to raise tax revenue. Furthermore, the Court held that since the sales tax was created to fund the operating deficit of the Rockford Metro Centre, elimination of the tax would impair contractual bond obligations of the authority

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and the bond holder under the United States and Illinois Constitutions.

In the second decision, Midwest Petroleum Marketers Assoc., et al. v. City of Rockford (Ill.App.2nd Dist. No. 83-1090,1985), which involved nearly identical claims as the Royal Liquor Mart case, (i.e. retailers challenge to city's levy of 1cent gasoline and fuel tax after the city's home rule powers were repealed by referendum) the Court reiterated its holding in Royal Liquor Mart. The Court concluded that "because the tax was levied at a time when the City of Rockford had the authority to levy, there is no reason to presume that the subsequent referendum repealing home rule authority invalidates the future collection of the tax".

Unlike Royal Liquor Mart, however, retailers in Midwest contended that the tax was invalid since it was not tied to any bond indebtedness. The Court dismissed this argument because the recommendation for a one-cent per gallon gas and diesel fuel tax came at the same time as an ordinance was read providing for borrowing money and issuing corporate purpose bonds. In the Court's opinion, this indicated that the tax and the bonds were linked from their inception.

Although these two decisions are on appeal to the Illinois Supreme Court they do provide some indication to municipalities in the interim that in certain circumstances actions taken pursuant to home rule powers will not be held invalid by a subsequent referendum repealing home rule status of the municipality.

George W. Dunn, President of the Board of Commissioners of Cook County, obtained a declaratory judgment in the Circuit Court of Cook County holding against the implementation of a county ordinance which reduced from 4/5's to 3/5's the majority necessary to override a veto by the President was unconstitutional. The Circuit Court reasoned that the ordinance purported to alter the county's form of government without referendum and was violative of Article VII, Sec. 6(f), of the 1970 Illinois Constitution. A divided Appellate Court affirmed.

Upon appeal to the Supreme Court the sole issue for consideration was whether enactment of the ordinance under the county's home rule authority (Ill. Const. 1970, Art. VII,Sec.6(a)) effected an alteration in the "form of government" without approval by referendum as contemplated in Article VII, Sec. 6(f) of the Constitution, which provides in pertinent part, "A home rule unit shall have the power subject to approval by referendum to adopt, alter or repeal a form of government provided by law***" (Ill. Const. 1970, Art. VII, Sec. 6(f)). In response to this issue the Court referred to the proceedings of the Sixth Illinois Constitutional Convention and noted that the meaning of "form of government" includes relative powers and functions of the County Board and the Chief Executive Officer of the County. In the Court's opinion, "reducing the vote

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necessary to override the President's veto from 4/5's to 3/5's effects a diminution of the power of the President and an augmentation of the power of the Board".

The Court further stated, "it is difficult to hypothesize a purported exercise of home rule authority which more clearly alters 'the relative powers' between the 'County Board and the Chief Executive Officer of the County'."

Relying upon this reasoning the Court held therefore that the enactment of the ordinance altered the County's form of government and, absent submission to approval by referendum as required by Article VII, Section 6(f), of the Constitution, the ordinance was invalid.

A non-home rule municipality which operates under the aldermanic form of government sought an opinion from the Illinois Attorney General on whether it is empowered to provide by referendum to hold nonpartisan municipal elections.

The Attorney General reviewed Article III of the Illinois Municipal Code which governs the aldermanic form of municipal government. He noted that Article III does not contain a general provision for holding of municipal elections on a nonpartisan basis but does make reference to municipal elections being governed by the general election law. (Ill.Rev.Stat. 1983, Ch. 46, Par. 7-1 et seq.). According to the Attorney General, the Election Code "requires a partisan primary to be held ... unless the referendum ... was effective to alter the manner of holding ... municipal elections".

The Attorney General noted that Article VII, Sec. 7 of the Illinois Constitution provides that municipalities which are not home rule may provide by referendum for the manner of selection of their officers. He relied upon the Illinois Supreme Court decision in Boytor v. City of Aurora, 81 Ill. 2d 308 (1980) which held that a home rule municipality may, by referendum, determine to elect city officers on a nonpartisan basis. Although the Boytor decision concerned a home rule municipality, it was the Attorney General's opinion that the term "manner of selection" as contained in Article VII, Sec. 7 of the Constitution (pertaining to non-home rule units) should be accorded the same meaning as that term has in Article VII, Sec. 6(f) of the Constitution (pertaining to home rule units). Based upon the reasoning of the Boytor decision, the Attorney General stated,

"Therefore, it is my opinion that Article VII, Section 7 of the Illinois Constitution of 1970. which grants to non-home rule municipalities the power to provide by referendum for the 'manner of selection' of their officers, authorizes a non-home "rule city to determine by referendum to conduct its municipal elections on a nonpartisan basis."

He stated that this interpretation of the constitution is further supported by the record of proceedings of the Sixth Illinois Constitutional Convention. Those proceedings indicate that through the device of the

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referendum, all local governments are afforded plenary control over the number, nature and duties of its own officers.

The Illinois Attorney General was asked to render his opinion on whether the offices of park district president and the office of city alderman are incompatible. The Attorney General found no constitutional or statutory provision prohibiting one person from holding the offices of park district president and city alderman. The question then, under common law doctrine of compatibility, was whether the duties of either office are such that the holder of one can not, in every instance, fully and faithfully discharge all of the duties of the other.

The Attorney General recognized the existence of statutory authority for park districts to enter into agreements with municipalities for specified purposes and that "the Intergovernmental Cooperation section of the 1970 Illinois Constitution (Ill. Const. 1970, Art. VII, Sec. 10) and the Intergovernmental Cooperation Act (Ill.Rev.Stat. 1983, Ch. 127, Par. 741 et seq.) grant municipalities and other governmental units, such as park districts, broad powers to contract or otherwise associate among themselves to obtain or share services, powers or functions." In this light it was the Attorney General's opinion that if one person were to hold both offices, "he or she could not fully represent the interests of both governmental units when those units contract with each other." It was for that reason the Attorney General held the offices to be incompatible. The Attorney General also stated that "the acceptance of an incompatible office by the incumbent of another office constitutes an ipso facto resignation of the first office ... (and) ... formal resignation or ouster by legal proceedings is not required."

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