Appeal from the Order of the Commonwealth Court entered October 6, 2008 at No. 1825 CD 2008, affirming the Order of the Court of Common Pleas of Allegheny County entered September 22, 2008 at No. SA 08-1027. Appeal from the Order of the Commonwealth Court entered October 6, 2008 at No. 1848 CD 2008, affirming the Order of the Court of Common Pleas of Allegheny County entered September 22, 2008 at No. SA 08-1053.
The opinion of the court was delivered by: Mr. Justice Baer
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.
We granted review of this case to determine whether two referendum questions relating to the taxation of the sale at retail of alcoholic beverages in Allegheny County could be placed upon a ballot. In July 2007, the General Assembly enacted 53 Pa.C.S. § 8602, permitting Allegheny County to impose a tax on the sale of certain liquors and malt and brewed beverages, at a rate not to exceed ten percent.*fn1 Pursuant to this provision, in December 2007, Allegheny County enacted the so-called "Drink Tax" at the maximum permitted rate of ten percent.*fn2 Allegheny County Code §5-808A.02. In 2008, a group of citizens circulated petitions to place a referendum question on the November 2008 ballot to cap the Drink Tax at one-half of one percent, hereinafter "Voter Referendum Question." In response, County Council attempted to place its own referendum question on the ballot proposing to abolish the Drink Tax and replace the revenues lost from that abolition through an increase in the property tax, hereinafter "County Referendum Question." The Board of Elections of Allegheny County denied the placement of both questions on the ballot. Subsequently, the trial court and the Commonwealth Court affirmed the decisions of the Board of Elections. After review, we agree that the questions were properly denied placement on the ballot as they fail to meet the requirements for such placement. As the legal issues related to each referendum question differ, we address the questions in separate sections of this opinion.
I. Voter Referendum Question
Appellant Sean Connolly Casey circulated a referendum petition, purportedly signed by more than 40,000 registered Allegheny County voters, hereinafter "Voter Referendum Petition." The Voter Referendum Petition sought to place the Voter Referendum Question on the November 4, 2008 ballot. The question proposed the following amendment to the Drink Tax:
The tax shall be levied at a rate established by County Council not in excess of one-half of one percent (.5%) of the sale price of each beverage meeting the definition of "liquor" or "malt or brewed beverages" contained within this article.
Appellant Casey filed the Voter Referendum Petition on August 5, 2008.
The Allegheny County Division of Elections determined that the Voter Referendum Petition facially satisfied the number of signatures required by the Allegheny County Code and the Allegheny County Home Rule Charter, hereinafter "Home Rule Charter." After the sitting Board of Elections recused itself due to public statements made by its members on the issue, the Allegheny County Court of Common Pleas appointed three judges to serve as temporary members of the Board of Elections and to hear the case in that capacity. The temporary Board of Elections rejected the proposed referendum on September 2, 2008. Appellant Casey appealed to the Court of Common Pleas of Allegheny County.
Court of Common Pleas President Judge Joseph James held a hearing on the matter, and on September 15, 2008, affirmed the decision of the Board, concluding that the referendum question could not be placed on the ballot. In its opinion, the trial court considered whether the Voter Referendum Question would be binding on the County, a requirement for referenda under the Allegheny County Code. Allegheny County Code, § 5- 1101.02(C)(2) ("Every referendum question must be binding. Non-binding referendum questions are expressly prohibited."). Rather than presenting a binding question, the court concluded that the Voter Referendum Question would be merely advisory. The court observed that County Council, under the Home Rule Charter, has the authority to adopt rates of taxation, and that the Appellant failed to demonstrate how the Home Rule Charter and Optional Plans Law, 53 Pa.C.S. §§ 2901 et seq. (hereinafter "Home Rule Law"), Allegheny County's Home Rule Charter, or the Allegheny County Code limits or transfers that power from County Council such that the tax rate adopted by County Council could be limited by voter referendum. Accordingly, the trial court concluded that the Voter Referendum Question could not be placed on the ballot because it was non-binding.
The Commonwealth Court affirmed the decision, adopting the analysis set forth in the trial court's opinion, and thereby denying placement of the Voter Referendum Question on the ballot. Appellant Casey filed a petition for allowance of appeal, which this Court granted.*fn3
Before this Court, Appellant Casey asserts that the Voter Referendum Question meets all the requirements to qualify for placement on the ballot in Allegheny County, specifically that the question is binding rather than advisory. To refute the courts' conclusion that the question is impermissibly non-binding, Appellant must establish that the authority to set tax rates is not exclusively reserved to County Council, and thus, that the rate of the Drink Tax could be limited by a binding referendum.
Appellant's arguments in this regard center on an evaluation of the provision of Home Rule Law that sets forth the limitations on the taxing power of municipal governments, 53 Pa.C.S. § 2962(b).*fn4 To prevail, Appellant must demonstrate that the County Council does not have the exclusive authority to set taxation rates, despite language in the first and third sentences of § 2962(b) that suggest otherwise and the absence of any overt language in § 2962(b) providing for the setting of tax rates by referendum. As explained in detail below, Appellant first claims that the authority to set the rate of the Drink Tax is not solely within the province of County Council because the first sentence of § 2962(b) provides that County Council's rate setting authority may be limited by, inter alia, the Home Rule Charter, which provides for referendum. Second, Appellant argues that the Drink Tax does not fall within the final sentence of § 2962(b), which explicitly provides County Council with the exclusive authority to set the rates of taxation on residents. Appellant argues instead that the Drink Tax is a tax on nonresidents, governed by the second sentence of § 2962(b), which does not include a grant of exclusive rate-setting authority to County Council. We address each of these arguments in turn.
The first sentence of § 2962(b) provides:
Unless prohibited by the Constitution of Pennsylvania, the provisions of this subpart or any other statute or its home rule charter, a municipality which has adopted a home rule charter shall have the power and authority to enact and enforce local tax ordinances upon any subject of taxation granted by statute to the class of municipality of which it would be a member but ...