Request By:
Mr. Charles Kiser, Jr.
Property Valuation Administrator
Room 214
Carter County Courthouse
Grayson, Kentucky 41143
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Alex W. Rose, Assistant Attorney General
You have requested an opinion of this office concerning two aspects of the fiscal operations of the property valuation administrator's office. First, you inquire how misappropriated funds recovered from an outgoing PVA by the Revenue Cabinet should be applied. Second, you inquire whether a reduction in the state contribution to any particular PVA's office must be mirrored by like reductions to all other PVA offices. Both of your questions may be answered in a general sense, at least, by simply saying that the legislature intended that the Revenue Cabinet should bear the ultimate responsibility and duty to see that each property valuation administrator's office is properly and sufficiently, but not excessively, funded. Such responsibilities and duties cannot be carried out by blindly following rigid formulas. Instead, the Revenue Cabinet must be flexible in how it allocates the state's money to each of its operatives around the state.
Despite the fact that they are locally elected, the PVAs are state officers and are subject to the direction and supervision of the Revenue Cabinet. Allphin v. Butler, Ky., 619 S.W.2d 483 (1981); Jefferson County Fiscal Court v. Trager, Ky., 194 S.W.2d 851 (1946); OAG 80-491; OAG 80-351. Typically, each PVA office is funded from three sources: the state, the county and one or more cities within the county. See KRS 132.590(6); 132.590(7) and KRS 132.285. Since the PVA is a state officer, all of these monies become state funds once appropriated to his office. See OAG 80-351 and Jefferson County Fiscal Court v. Trager, supra. However, there are technical differences between the appropriations from each of these sources. The county appropriations do not lapse at the end of the fiscal year but may be released back to the county fiscal court at the discretion of the Revenue Cabinet. See KRS 132.590(10). The city appropriations do not lapse and apparently cannot be released. See KRS 132.285. The state appropriations, on the other hand, do lapse at the end of each fiscal year. In addition, the city and county appropriations are appropriated on an inflexible formula basis. The state appropriations, on the other hand, are determined on a flexible formula basis. This flexibility results from the insertion in KRS 132.590(6) of the following language:
". . . the total sum allowed by the state to any property valuation administrator's office as compensation for deputies, other authorized personnel, and for other authorized expenditures shall not exceed the amount fixed by the Revenue Cabinet."
This language establishes that the state appropriation formula merely sets a maximum amount which may be appropriated to any particular PVA's office. See OAG 78-654.
The monies recovered by the Cabinet from an outgoing PVA are state funds. This being so, they belong in the state treasury. Jefferson County Fiscal Court v. Trager, supra. Moreover, since the Revenue Cabinet has approval authority over PVA expenditures and has the discretion to increase or decrease the state appropriation to each PVA as the budgetary needs of each PVA's office may require, the ultimate discretion as to disposition of nearly all of the PVA's funds lies with the Revenue Cabinet. See OAG 78-654; KRS 132.601 and KRS 132.590.
There is nothing in the statutes which would require the Revenue Cabinet to allocate precisely the same percentage of the maximum allowable state appropriation to each county. Indeed, such a system, if it existed, would be unworkable since it would be entirely inflexible. As noted previously, city and county appropriations are required to be appropriated in an inflexible manner. If the state appropriation was required to be made in the same inflexible manner (while still being subject to lapse at the end of the fiscal year) , the Revenue Cabinet would have no ability to help those PVA offices which are inadequately funded at the local level. And at the same time, funds which might otherwise be used to aid those poor counties would be lapsing back into the general fund because the richer counties to which they had been allocated would have no need for those funds. This is an especially significant matter in these times of a budget crunch in which the legislature has appropriated considerably less than the maximum amount it could have appropriated for the funding of the PVAs as a whole. In its wisdom, the legislature gave the Revenue Cabinet the discretion to allocate state funds as needed to make up the difference between the PVAs total needs and the funds available on the local level.