Allen v. McClendon

967 S.W.2d 1, 1998 Ky. LEXIS 35, 1998 WL 124216
CourtKentucky Supreme Court
DecidedMarch 19, 1998
DocketNo. 96-SC-1143-TG
StatusPublished
Cited by11 cases

This text of 967 S.W.2d 1 (Allen v. McClendon) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. McClendon, 967 S.W.2d 1, 1998 Ky. LEXIS 35, 1998 WL 124216 (Ky. 1998).

Opinions

WINTERSHEIMER, Justice.

This appeal is from a summary judgment of the Pulaski Circuit Court which upheld pay increases voted by members of the Pulaski Fiscal Court from a level of $600.00 per month to $1,200.00 per month. This Court granted transfer of this case from the Court of Appeals in order to consider it with Polston v. King, 965 S.W.2d. 143, which we also decide on this date in a separate opinion.

The principal issue is whether a fiscal court can vote its own members a pay in[2]*2crease under the rubber dollar theory, thereby raising their own salaries during their term in office.

The lawsuit was originally filed by a nonprofit corporation to challenge the increase in compensation. The corporation was dismissed as a party and numerous individuals were substituted as plaintiffs. The fiscal court magistrates were granted summary judgment approving the pay increase pursuant to the decision of the Court of Appeals in Hasty v. Shepherd, Ky.App., 620 S.W.2d 325 (1981). The circuit court determined that the plain meaning of Section 161 of the Kentucky Constitution and KRS 64.530 have been nullified by the combined effect of rulings by the Kentucky Court of Appeals and, consequently, the circuit court was bound by such precedent. This Court accepted transfer.

In 1993, all of the appellee magistrates were running for election to that office. Some were incumbent members of the fiscal court seeking reeleetion. All of the appellees were elected in the Fall of 1993 for a five-year term beginning January 1994. The salary established for the office of magistrate was $600.00 per month. On April 12, 1994, three months after taking office, the members of the fiscal court voted 6 to 1 in favor of increasing their salaries effective immediately. This lawsuit followed.

Section 161 of the Kentucky Constitution is very brief. It states:

The compensation of any city, county, town or municipal officer shall not be changed after his election or appointment, or during his term of office; nor shall the term of any such officer be extended beyond the period for which he may have been elected or appointed.

Since the adoption of this section, courts have interpreted the provisions of Section 161 to permit a cost of living adjustment to be applied to the compensation received by local elected officials in order to recognize changes in the purchasing power of the dollar as understood by the drafters of the 1891 Constitution. On the view that such changes in economic conditions generally were not contemplated by either Section 161 or Section 246 of the Kentucky Constitution at the time of adoption, this theory permitted members of the General Assembly to raise salaries of elected officials in excess of the maximum permitted by law. Matthews v. Allen, Ky., 360 S.W.2d 135 (1962).

Commonwealth v. Hesch, Ky., 395 S.W.2d 362 (1965), extended the cost of living approach, sometimes referred to as the “rubber dollar theory” to permit a 30 percent increase which was equivalent to the increase of purchasing power from 1949 to 1964, when the legislature passed the increase. This applied to the salaries of elected county officials although it did not specifically include magistrates and county commissioners. Hesch, supra, allowed sitting county officials to benefit from the increase pursuant to a statute allowing such an increase notwithstanding the prohibition of Section 161 regarding changes in compensation during the term of elected officials.

Hasty v. Shepherd, Ky.App., 620 S.W.2d 325 (1981), authorized the magistrates of Bullitt County to increase their salary based on the Consumer Price Index during their terms, and considered both Section 161 of the Constitution and KRS 64.530. Hasty, supra, does not specify the amount of the increase permitted, and it does not stand for the proposition that an increase in salary during the term of sitting magistrates in excess of that allowed by the Consumer Price Index for the current year is permissible. The Consumer Price Index is an index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period. Webster’s II, New Riverside Dictionary (1984). There is nothing in Hasty that indicates that members of the fiscal court increased their fixed compensation by an amount exceeding the increase in the Consumer Price Index after their compensation had been fixed in the year of their election.

The cost of living adjustment or “rubber dollar” theory attributed to Matthews, supra, can be harmonized with a proper interpretation of KRS 64.527 and KRS 64.530. The cost of living index increase could be applied to the statutory maximum for salaries without violating the prohibition on [3]*3changing compensation during the term of an elected official. The annual changes based on the index authorized by those statutes reflects the change in purchasing power of the dollar and should not be labeled as an increase in compensation for purposes of the law.

The Kentucky General Assembly has established a specific statutory system relating to both cost of living increases and pay raises granted by fiscal courts to themselves. KRS 64.530 and KRS 64 .527. KRS 64.530 establishes limits on the timing of salary increases for magistrates and provides that no increase in compensation shall be effective during the term. KRS 64.527 requires that the Department for Local Government shall compute the rate of increase in the Consumer Price Index and the statutory maximum salary for county officials. The pay raise in question violates the plain meaning of KRS 64.530, which provides in § 4:

In the case of county officers to be elected by popular vote ... the monthly compensation of the officer ... shall be fixed by the fiscal court ... not later than the first Monday in May in the year in which the officers are elected, and the compensation of the officers shall not be changed during the term ....

KRS 64.530(6) notes in pertinent part:

But no change of compensation shall be effective as to any member of the fiscal court during his term of office.

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Cite This Page — Counsel Stack

Bluebook (online)
967 S.W.2d 1, 1998 Ky. LEXIS 35, 1998 WL 124216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-mcclendon-ky-1998.