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[ORIGINAL SECTION.] SECTION 18. No county, city, town, township, board of education, or school district, shall incur any indebtedness or liability in any manner or for any purpose, exceeding in any year the income and revenue provided for it for such year, without the assent of two-thirds of the qualified electors thereof voting at an election to be held for that purpose, nor unless, before or at the time of incurring such indebtedness, provision shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and also to constitute a sinking fund for the payment of the principal thereof within twenty years from the time of contracting the same. Any indebtedness or liability incurred contrary to this provision shall be void.
The act of March 18, 1889 [Stats. p. 14), authorizing cities to issue bonds for public buildings, is a general law, and the city council of Oakland may issue bonds to erect school buildings although its charter vests the government of the school department in a board of education and authorizes the board to build school houses, but does not authorize it (the board) to contract debts, exceeding in any one year the revenue provided for that year. Wetmore v. City of Oakland, 99 Cal. 146.
The salary of the registrar of voters for San Francisco was fixed by an act of the legislature, and is not an indebtedness created by the city and need not necessarily be paid from revenue of any particular year. Lewis v. Widber, 99 Cal. 412.
The power of taxation is a necessary attribute of municipalities. Security Savings Bank, etc. v. Hinton, 97 Cal. 214.
Irrigation districts are to be treated as a class of municipal corporations, but such corporations are not of the class or character enumerated in this section of the constitution, and the legislature in creating them is not controlled by the restrictions of this section. It is not required that assessments levied in the form of taxes, in irrigation districts, should be authorized by a vote of two-thirds of the qualified electors, nor that their indebtedness of any year shall be paid from the revenue of that year. Bonds running for a number of years may be lawfully issued under the Wright act. In re bonds of Madera Irrigation District, 92 Cal. 296. Same case on rehearing, Id. p. 341.
Section 77 of the county government act providing that claims against the county must be paid according to priority of presentment, must be construed as applying to bonds of any given year. The income and revenue of a county for a given year must first be applied to the payment of indebtedness incurred during that year, before payment of any indebtedness incurred during a preceding year can be paid therefrom. Shaw ». Statler, 74 Cal. 258.
The coustitution does not prohibit the auditor of the city and county of San Francisco from auditing the demands for salaries of deputy county clerks, notwithstanding the aggregate amount of the salaries for a given year would exceed the amount limited by the
supervisors for the payment of such salaries for that year. Welch v. Strother, 74 Cal. 413.
A county indebtedness incurred in any given fiscal year cannot be paid out of the revenue or income of any future year. [S F. Gas Co. v. Brickwedel, 62 Cal. 641, infra. Sec. 36 Co. Gov. Act 1883, Stats. p. 311.] Schwartz 9. Wilson, 75 Cal. 502.
On the authority San Francisco v. Brickwedel, 62 Cal. 641, Held, that a claim for goods sold a county, charged against the fund of a road district, and in which there was sufficient money to pay the claim, cannot afterwards be ordered paid out of the general county fund of a subsequent year, without a showing that it was to be paid out of revenue provided for the same year in which the indebtedness was contracted. Schwartz v. Wilson, 75 Cal. 502.
Mandamus will not issue to the auditor of San Francisco, directing him to audit bills for gas, when the revenue for the year in which the indebtedness was incurred has been exhausted, and where the claimant is also indebted to the city for taxes in an amount greater than the claim presented. S. F. Gas Co. v. Brickwedel, 62 Cal. 641.
Referred to in Mayrhoffer v. Board of Education, 89 Cal. 110, where it is said that under this section as amended, one who furnishes material for the state knows to what he must look for payment, and that a debt contracted beyond the revenue for the year cannot be collected, nor can a lien be had upon a pub
lic (school) building. Which case is in turn cited in Bates v. Santa Barbara County, 90 Cal. 546, and in Skelly v. School Board, 103 Cal. 655.
For case illustrating attempt to evade the provision requiring the indebiedness of each year to be paid from the revenues of that year see McGowan v. Ford, 107 Cal. 181-184. And that the provision may work hardship in some instances is no reason for the court ignoring the same. See Smith v. Broderick, 107 Cal. 648.
The two-thirds majority provided for means two-thirds of those voting upon the proposition, and where the question of incurring the indebtedness is voted upon at the same time and place of a general election, the two-thirds provision does not refer to the whole number of votes cast at such general election.
Howland v. Supervisors, 109 Cal. 153. In the same case it is held that this section does not require that a tax should be levied at the time of issuing the bonds, but only that provision must be made insuring the collection of an annual tax sufficient to pay the interest as it falls due and to create a sinking fund.
Injunction will lie to restrain the supervisors, auditor and treasurer of San Francisco from incurring any indebtedness or expenses in excess of the revenue provided for the fiscal year, and to enjoin the levying of any tax or making any provision for the paying of the deficiency arising therefrom out of the funds provided for the ensuing fiscal year. Bradford
v. City and County of San Francisco, 112 Cal. 538.
The prohibition against creating indebtedness in excess of the revenue of the current year has no application to the refunding of municipal indebtedness. Refunding only changes the form of the evidence of indebted
Sections 4445 to 4449 of the Political Code related only to indebtedness incurred prior to the adoption of the present constitution, and the assent of electors was not required to the proceeding of refunding. As to indebtedness created since the constitution the question of refunding must be submitted to vote, and the constitution itself is sufficient, without legislation, to authorize the calling of an election. City of Los Angeles v. Teed, 112 Cal. 323.
As to the validity of funding acts generally, see Hunsaker v. Borden, 5 Cal. 288;. Sharp v. Contra Costa Co., 34 Cal. 290; Rose v. Estudillo, 39 Cal. 270; People v. Morse, 43 Cal. 534; Bates v. Gregory, 89 Cal. 387; and as to forming a contract, Bates v. Porter, 74 Cal. 224.
A contract by a municipality for the care and disposition of its sewage for a period of five years, for a given sum per year, payable in quarterly installments, does not create an immediate liability for the payment of a sum in excess of the revenue of the year in which the contract is entered into. McBean v. City of Freeno, 112 Cal. 161.
The same is held with reference to a contract by a county for the construction of build