An already nervous Kentucky library community got more unsettling news this summer: two more districts were targeted by lawsuits challenging their right to raise tax revenue without voter approval and seeking massive spending rollbacks. The most recent litigation brings the total number of such cases in the state to five. Libraries in Anderson and Montgomery counties now find themselves part of a growing voter backlash, spearheaded by members of Kentucky’s tea party and others, that could eventually change the way the majority of Kentucky’s 106 library districts have done business for decades. If plaintiffs ultimately get their way, tax rates could be rolled back dramatically in every Kentucky library system originally created by petition: 79 of the state’s 106 districts. Tax rates would then have to be established each time they changed through separate petition drives. The first two court rulings, in Campbell and Kenton Counties —handed down in April—sided with plaintiffs. They have both been appealed. No court dates have been set for the Montgomery and Anderson county cases; the fifth case, Boone County, has been filed but is currently “on hold,” attorney Brandon Voelker, who represents plaintiffs in all five cases, told LJ. The six plaintiffs in the Campbell, Kenton, and Boone County cases are all members of the Northern Kentucky Tea Party. Harold Todd is the lone plaintiff in the Anderson County suit. He is described in the filing only as a resident and property owner. Four plaintiffs filed the Montgomery County suit on behalf of Citizens for Fair Taxation, which describes itself as a “grassroots group founded to address wrongful taxes” by Kentucky’s special taxing districts.

At issue

Libraries argue that under a state law passed in 1979, known as House Bill 44, they have the power to enact small annual tax increases not subject to voter approval. Plaintiffs contend that any library network originally created by a petition drive cannot raise taxes except by gaining a 51 percent majority through a similar petition drive. A 1978 state law known as KRS 173.790, Voelker claims, is the overriding statute. So far, Circuit Court judges in Kenton and Campbell counties have agreed with him. The Montgomery and Anderson county lawsuits, mirroring the first three cases, ask that library taxes revert back to the rate charged when the districts were first formed.

• In Anderson County, the current tax rate of 8.6 cents per $100 of personal property value would drop to its original 1967 figure of 2.5 cents.
• Montgomery County would see its tax rate of 10.22 cents per $100 sink to 3 cents if plaintiffs are successful.

Melissa Smathers-Barnes, library director for Montgomery County, said a loss in court would have a devastating effect in her district. One of the system’s two branches would almost certainly be forced to close, she said, and the roster of 26 employees would likely be shaved to seven FTEs. “It’d be a struggle,” Smathers-Barnes said. Smathers-Barnes said the district, partly as a show of good faith to residents concerned about high taxes, has already budgeted a reduction from 10.22 cents per $100 to 6 cents. But the citizens group remained unmoved. Anderson Public Library director Pamela Mullins said she believes her system was sued because it currently has a $2 million surplus in the bank to go along with a $1.3 million operating budget. At least part of that surplus, Mullins added, would be spent on an expansion of its one branch in Lawrenceburg. “I wouldn’t say the plan is completely on hold, but things have slowed down dramatically,” Mullins said of the expansion play. She said her district has not raised the tax rate since 2009. Tom Underwood, executive director of the Kentucky Library Association, said a successful outcome by plaintiffs would have a “swift and catastrophic” effect on libraries, including budget refunds that would force branch closures, staff cutbacks, and loss of services around the state. “Our belief is, the library districts have acted properly under the guidance they were given in 1979,” Underwood told LJ. “I’m very concerned about the potential fallout from these suits.” Voelker said his clients are not bent on the ruination of libraries, as some have charged, but merely determined to help voters gain more of a voice in the tax rates they pay and seeking redress for years of being charged the incorrect amount. “The issue is, the people have a right to determine how much of a library they want in their community,” Voelker said. “So quit the doom and gloom and take your case to the public.”

Where do they go from here?

Because the legal arguments in all five cases are so similar, lawyers for the two newly sued districts said they’d prefer to wait and see how the first wave of litigation fares in the appellate stage before going into a courtroom. Attorney Ben Crittenden, who represents the Anderson Public Library, said the lawsuit was filed in May. No court date has been set, but Crittenden said he is considering asking the judge to hold the case in abeyance until the appeals process in Campbell and Kenton counties has been resolved. “It’s the same issue,” he said. But that may not be an option. Jeff Mando, attorney for the Montgomery County district, told LJ that the parties in the Montgomery County case are due in court in early September for a discovery conference. (Mando also represents the Campbell County district.) “I see this case going to the (Kentucky) Supreme Court, no matter what,” said Mando. He told LJ that this summer, in an effort to expedite the appeals process, he petitioned the state Supreme Court to hear the appeal next, bypassing the Court of Appeals, a request Voelker confirmed he did not oppose. But the high court recently denied that motion, leaving the matter in the hands of the appeals court, which has not yet scheduled a hearing.