xt7d513tx73g https://exploreuk.uky.edu/dips/xt7d513tx73g/data/mets.xml Pennsylvania United States Works Progress Administration 1937 Other contributors include: Robert C. Lowe (Robert Chapin) and Mary T. Denman under the supervision of A. Ross Eckler; 7 pages, 27 cm; This bulletin is one of a series presenting state constitutional provisions affecting public welfare; Includes bibliographical references; UK holds archival copy for ASERL Collaborative Federal Depository Program libraries; Call number Y 3.W 89/2:36/P 38 books English Washington D.C.: Works Progress Administration New York, Kraus Reprint Corp. This digital resource may be freely searched and displayed in accordance with U. S. copyright laws. Pennsylvania Works Progress Administration Publications Analysis of Constitutional Provisions Affecting Public Welfare in the State of Pennsylvania Analysis of Constitutional Provisions Affecting Public Welfare in the State of Pennsylvania 1937 1937 2019 true xt7d513tx73g section xt7d513tx73g g _ , . L”,
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i ' MAY 15, 1957
‘ _ A0613 ’35 _

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g. This bulletin is one of a series presenting
4 , . State constitutional provisions affecting public wel—
‘ fare, prepared to supplement the State by State digests
_ , ‘3 of public welfare laws so as to provide in abstract
’ form the basis for the public welfare services of the
" ' ' several States.
‘ , The provisions quoted are those concerned
‘ 7 directly with public welfare administration and such
- ~ . 8 others as may substantially affect a public welfare
' , program, even though only indirectly related. It would
be impossible to consider within the limits of this
_ study every remotely connected constitutional provi-
O sion. The indirectly related provisions included,
- 3 therefore, have been restricted to those concerning
., finance, legislation, and the methods of constitutional
, 0 amendment. 3
O , An attempt has been made, by a careful selec—
»_ tion of the most recent cases decided by the highest '
a. 3 courts of the States, to indicate wherever possible how
these provisions have been construed. These cases are
», included in footnotes appended to the constitutional
:i provisions shown.
2.". *
f"; : It is hoped that these abstracts will be
‘2,» . - f ‘3' useful to those interested in public welfare questions
"" i in indicating how State and local public welfare admin—
" ' 3‘ istration may be affectedby constitutional powers and
a limitations. ‘
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E 9 Pa e
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EV Incidence of Responsibility for Welfare Program.................. 1
E Financial Powers and Limitations................................. 2


E . Taxation and Assessments.................................... 2

p E Exemptions.................................................. 4

f Borrowing and Use of Credit................................. 6
i. Other Income................................................ 10
E Appropriations and Expenditures............................. 10
g 9 Provisions Affecting Legislation................................. 11
T' Q Constitutional Amendment or Revision............................. 17
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3, Pennsylvania
u“ a
, 9 I. Incidence of Responsibility for Welfare Program
’ A. No appropriations except for pensions or gratuities for
9 military services and to blind persons twenty-one years of age and up—
‘ wards, shall be made for charitable, educational or benevolent purposes,
. to any person or community, norto any denominational or sectarian insti—
tution, corporation or association.2
3 1Constitution UB75), as published by the Commonwealth of Pennsylvania in the Pennsyl—
vania Manual (1955-36); with all amendments to May 15, 1937.
ZConstitution, Art. III, Sec. 18, as amended 1953.

' An act (Old Age Assistance Act of 1923, P.L. 189) providing for a discretionary
payment of $1 per day to persons over 70 with incomes not in excess of $365 per
year and having property not in excess of $5,000 was held void under this section

' as granting gratuities, for the reason that the granting of aid was not based on the
9 need of the recipient. Busser vs. Snyder, 282 Pa. 440, 128 A. 80 (1925).
' The act was held not sustainable on the theory that it was a "poor" law, as the
term "poor" describes those who are destitute and helpless, unable to support them—
. selves and without means of support. Distinguishing appropriations under the above
act from those made for State employees, school teachers, and Judges by retirement
acts, it was held that such were valid as constituting "delayed compensation for
,; long—continued performance of public duties,"and particularly in the case of retired
? Judges "for holding themselves in readiness to perform work assigned." The words
3 "person" and"community" wereheld not limited in their application to a single person
f or place, but might also include a group or class of persons wherever situated, in
‘ any part or all of the Commonwealth. It was further held that under this section
1 appropriations might be made to nonsectarian and nondenominational institutions or
‘ persons for charitable, educational,or benevolent purposes; that this section of the
‘ Constitution does not prohibit appropriations to compensate institutions for caring
.‘ ' for indigent, infirm, and mentally or physically defective persons who become direct
g . charges on the body politic. Ibid.
j - Act No. 28 passed at the 1936 Extraordinary Session of the Legislature, provides
3 for the granting of old age assistance. The act specifically sets out eligibility
if requirements including a provision that the applicant be indigent and without any
* relative responsible under the law of the State and financially able to support him
or her.
2 The validity of this act has not, as yet, been questioned in the courts. [Ed.
? note.
2% 9 An act appropriating $10,000,000 for unemployment relief for division among the
3 V local poor districts of the State was held valid under the Constitution, as being a
, measure for the support of the poor. Commonwealth vs. Liveright, 308 Pa. 55, 161 A.
, The Supreme Court in its opinion stated that the support of the poor was held .
‘ to be an obligatory governmental duty andthe appropriations under the act werethere—
1 fore not "charities" or "benevolences." The court further stated that the State, in
3 performance of its governmental duty to care for the poor, is not forbidden by the
3 9 Constitution to assume directly obligations or to permit or aid subsidiaries of gov—
1 ernment to perform it. However, when the unemployed have work offered to them, but
- without good reason do not work,theyare not "poor people" entitled to support under
; the poor laws. Ibid.
0 ' '
= 1

 . a .
2 Pennsylvania
I. Incidence of Responsibility for Welfare Program—Continued ,
a” i
B. The General Assembly may make appropriations of money to
institutions wherein the widows of soldiers are supported or assisted, '
or the orphans of soldiers are maintained and educated; but such appro— ’
priations shall be applied exclusively to the support of such widows and ,
orphansf5 a
II. Financial Powers and Limitations 6 :
A. Taxation and Assessments
(1) State
(a) All taxes shall be uniform, upon the same class i
of subjects, within the territorial limits of the authority levying the a; ,
tax, and shall be levied and collected under general laws;4 * =3 =3. ~
The intent of this section prohibiting appropriations for charitable, educa- , ,
tional, or benevolent purposes to any denominational or sectarian institution was
to forbid the State from giving any recognition to a religious sect or denomination, -
in furtherance of the purpose to divorce absolutely church and State.- Therefore, 1t <3 ,
was held that though for upwards of 40 years the Legislature of Pennsylvania had been 1
appropriating public money to sectarian and denominational institutions, under the i'
guise of public charity, this did not warrant the violation of Sec. 18, Art. III of C
the Constitution, or stamp it with legality. Collins vs. Kephart, 271 Pa. 428, 117 i
A. 440 (1921). .
SConstitution, Art. III, Sec. 19.
. 1
4Constitution, Art. IX, Sec. 1, as amended 1923. Q
Under the constitutional requirement of uniformity of taxation, the power to {
classify is unlimited, but within each class actually established taxes must be ‘
uniform. In re Rowell's Estate, 315 Pa. 181, 173 A. 634 (1954). ,
An act levying a tax of $2 on every $100 of personal property passing by will
or by the intestate law of PennsylVania and providing for an exemption of personal 5
property to the amount of $5,000 was held to violate Art. IX, Secs. 1 and 2. The J.
court stated that the words Iall taxesn must necessarily be construed to include prop- '_ :
erty, inheritance, succession, and all other kinds of taxes, the subjects of which 3 t‘
are susceptible of Just and proper classification. A pretended classification that i
is based solely on a difference in quantity of precisely the same kind of property 1
is necessarily unjust, arbitrary, and illegal. Cope's Estate, 191 Pa. 1, 45 A. 79 l
(1899). i
In determining whether a legislative classification violates the tax uniformity E
clause of Constitution, the courts sit in Judgment not on the legislative wisdom, '
but on the legislative power. Commonwealth vs. Lukens, 312 Pa. 220, 167 A. 167 (1953). - {
The classification of commodities for taxation is for the Legislature to deter— a p 3'
nine, and courts will not interfere, unless reasonably certain that the classification 1
is purely illusory and intended to evade the Constitution. It was held that anthra- )
cite and «bituminous coal might be put into separate classes for purposes of taxation. 1
Commonwealth vs. Hudson Coal Company, 287 Pa'. 64, 134 A. 415 (1926). See also Heisler i
1 vs. Thomas Colliery Company, 274 Pa. 448, 118 A. 594 (1922). i‘
. With' respect to corporations, this section requiring uniformity of taxation on 1
I: the same class of subjects is satisfied if all corporations of like character fall 1‘ g
3 within the statute, since uniformity according to classification is all that is re- ‘1 '
é quired. Commonwealth Vs. Quaker City Cab Company, 287 Pa. 161, 154 A. 404 (1926). 1
1 An act imposing a tax on the income of corporations, foreign and domestic, for ;
the privilege of doing business in this State and exempting from its operation build— ‘
ing and loan associations, banks, trust companies, insurance companies, and the like ‘
was held not to violate Art. IX, Sec. 2. Turco Paint and Varnish Company vs. Kalodner Q 1
et al., 320 Pa. 421, 184 A. :57 (1936).
‘ e f

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.- Pennsylvania 3
,. II. Financial Powers and Limitations—Continued
i" e
‘ A. Taxation and Assessments—Continued
:4 (1) State—Continued
(b) The power to tax corporations and corporate prop—
“ 9 erty shall not be surrendered or suspended by any contract or grant to
~ which the State shall be a party.5
9 (2) Counties and Other Local Units6
(a) See page 2, paragraph (a), and footnote 4.
, (b) The General Assembly shall not delegate to any
‘ special commission, private corporation or association, any power to make,
supervise or interfere with any municipal improvement, money, property
9 or effects, whether held in trust or otherwise, or to levy taxes or per-
form any municipal function whatever.’7
, (c) Any county, township, school district or other
municipality incurring any indebtedness shall, at or before the time of
The provision of this section that all taxes shall be uniform upon the same
. class of subjects is generally held not to apply to assessments for the cost of local
improvements. Harrisburg vs. McPherran, 200 Pa. 545, 49 A. 988 (1901)-
A graduated tax imposed on the net income of residents and upon the entire net
1;: incomes received by nonresidents from property owned or from any business or occupation ‘
3 carried on within the State, with certain exemptions, was held invalid as being in
g 9 conflict with Art. IX, Sec. 1. The court discussed the question of whether a graduated
a income tax was a property or an excise tax and held that such tax was a property tax.
. The court further stated, "We pass no opinion upon the question of whether a tax upon the
income from trades, occupations, or professions is a tax upon property, although re—
spectable Judicial opinion has indicated that it is not.’I Kelley et a1., vs.Kalodner
, et al., 320 Pa. 180, 181 A. 598 (1955).
_: * An occupation tax graduated according to the volume of business transacted was
i. held valid. Differences in the manner of transacting business were held to constitute
3 a legitimate basis for classification. Knisely vs. Cottereal. 196 Pa. 614, 46 A.
,1; 861 (1900).
if The clause of this section requiring taxes to be levied and collected under
general laws was held not to prohibit the levy of taxes under laws relating to a
special class of municipal corporations. Commonwealth vs. MacFerran, 152. Pa.244.
; 25 A. 556 (1895).
t 5Constitution, Art. IX, Sec. 5.
9‘ 6"The Legislature shall have power to classify counties, cities, boroughs, school dis-
, tricts and townships according to population, and all laws passed relating to each
class, * * * shall be deemed general legislation within the meaning of this Con-
, stitution; but counties shall not be divided into more than eight classes, cities
' into not more than seven classes, school districts into not more than five classes,
1 and boroughs into not more than three classes." Constitution, Art. III, Sec. 54.
; adopted 1923.
.1 p The General Assembly is authorized to provide for the consolidation or the county,
5; " poor districts, cities, boroughs, and townships of the county of Allegheny into a
‘j consolidated city and county. Art. XV, Sec. 4, as amended 1955.
g For provisions relating to the adoption of charters and local self-government
. by cities, see Art. XV, Sec. 1. These powers are subject to restriction by the Leg-
. islature.
‘ 7Constitution, Art. III. Sec. 20. ‘
, e

4 Pennsylvania
II. Financial Powers and Limitations—Continued
A. Taxation and Assessments—Continued
' (2) Counties and Other Local Units—Continued
so doing, provide for the collection of an annual tax sufficient to pay
‘ A
the interest and also the principal thereof within thirty years.8
1 (d) The General Assembly shall not delegate to any
special commission, private corporation or association, any power to make, "
supervise or interfere with any municipal improvement, money, property or
effects, whether held in trust or otherwise, or to levy taxes or perform
any municipal function whatever.9 .
B. Exemptions . I a
I (a) * * =‘-’- the General Assembly may, by general laws,
exempt from taxation public property used for public purposes, actual
places of religious worship, places of burial not used or held for private '
I __._____.___
I 8 . I"
I Constitution, Art. IX, Sec. 10.
i This section does not apply to incidental and ordinary current expenses—Lehigh
I Coal and Navigation Company's Appeal, 112 Pa. 360, 5 A. 231 (1886); nor to a contract
I which can be fully discharged out of current revenues—Spangler vs. Gallagher. 182
I Pa. 277, 37 A. 852 (1897). 7'
If a city at the time Of making a contract levies a special tax in good faith
I supposed to be adequate to meet it, but in consequence Of fire, flood, or decline in
. values the revenues therefrom accruing are insufficient, it cannot be held that the A
contract, good at its inception, would thereby be made bad. The constitutional re—
striction was not intended to make municipalities dishonest, nor to prevent those who
. contract with them from collecting their Just claims, but to check rash expenditure on
I credit, and to prevent loading the future with the results of present inconsiderate
. extravagance. Addyston Pipe and Steel Company vs. Corry, 197 Pa. 41, 46 A. 1055 (1900).
The .Constitution does not grant the power to a municipality to incur indebtedness;
I the power comes from the Legislature, and is limited by Sec. 8 of Art. IX (p, a, .
I par. (a)), and regulated by See. 10 (p. 3, par. (c)). The latter section is a com- 7, '\
I mand to provide, by the method therein specified, funds for the payment of an indebt-
. edness, which the Legislature has authorized within the limitation of the Constitution.
‘ The municipality's power is not therein affected, but rather its mode of exercise.
The words "at or before" are mandatory, but there is no provision stating that any
indebtedness of the city shall’be void if such a tax is not provided at or before the
incurring thereof. The section is .an explicit and express command to the subdivisions
of the government to perform a duty, aduty which may be enforced by mandamus. Ohlinger
et al., vs.Maidencreek Township, Berks County et al., 312 Pa. 289, 167 A. 882 (1935). a I.
A township issued notes without levying a tax to retire same. The notes were
held valid and collectible in assumpsit. Ibid. 2
See p. 9, last paragraph of footnote 20. '
9Constitution, Art. _III, Sec. 20. ,
The Allegheny County Authority, a public corporation created by Act of 1955 I
and authorized to enter into agreements with the United States Government particularly é
as they related to the National Industrial Recovery Act, the State of Pennsylvania, r i I
and others, was held not to be a special commission nor a private corporation or I
association within the prohibitions of this section. The Authority, as the agent :
created for the purpose by the State, was held to deal not. with property owned by I
the municipality, but with the highway system of the State as to which the power of 1
the State was supreme. The Supreme Court stated: "It cannot be said that the creation . I
of a public corporation as a state agency to take over public highways for the limited 6 I
purpose of improving them, paying for the improvements but of revenues collected for ' Z
W.-— .

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5 Pennsylvania 5
I a II. Financial Powers and Limitations~Continued
1 :9
.3 B. Exemptions—Continued
I'_; or corporate profit, and institutions of purely public charity and real
I and personal property owned, and used by any branch, post or camp of
1' 9" honorably discharged soldiers, sailors and marines.10
9 (b) Taxation laws may grant exemptions or rebates to res—
' idents, or estates of residents, of other States which grant similar
exemptions or rebates to residents, or estates of residents, of Pennsyl-
(c) All laws exempting property from taxation, other than
' 1 9 the property above enumerated, shall be void.12
' their use, and then returning them to the local political subdivisions to which they
had formerly been entrustedby the state is a special commission in any sense in which
those words were used >I< * 2|: in the constitution, either in substance or in spirit."
. . Tranter vs. Allegheny County Authority. 516 Pa. 65, 173 A. 289 (1934).
- I 10Constitution, Art. IX, Sec. 1, as amended 1923.
The Constitution exempts nothing, it merely permits the Legislature to exempt
.\ within the lines laid down for its guidance. A claimant of exemption from taxation
must show affirmative legislation in support of his claim, and his case must be
clearly within it. Philadelphia Vs. Barber, 160 Pa. 123, 28 A. 644 (1894).
. This specific delegation of authority to exempt was held to impliedly prohibit
L’; . exemption from taxation of any other property, but to place the matter beyond the '
If 9 reach of doubt, Sec. 2, Art. IX of the Constitution (par. (c) above), provides that
3 "all laws exempting property from taxation other than the property above enumerated
shall be void." Cope's Estate. 191 Pa. 1, 43 A. 79 (1899).
- The provision in an act exempting from taxation persons whose incomes are below
a certain figure depending on whether married or single violates the constitutional
' rule of uniformity in taxation. Ibid.
’j » An assessment for benefits conferred by a municipal improvement is not a tax
1 within the meaning of this section and a charitable institution cannot claim exemption
I 3 from assessment under this provision. Wilkinsburg Borough vs. Home for Aged Women,
,7 131 Pa. 109, 18 A. 937 (1890). 1
II Municipal property owned and used for public purposes and from which no revenue
.2 is derived is exempt from taxation, unles‘s specifically made taxable by law. Erie
County vs. Erie City, 113 Pa. 360, 6 A. 138 (1886). But municipal property which
1 produces revenue is taxable. Erie County vs. Commissioners of Water Works, 115 Pa.
1 368, 6 A. 138 (1886).
I, When part ofa building is used solely for church purposes and certain rooms in
i .9 the building are rented for a school, the building may be divided for purposes of
’ taxation and the portion used solely for church purposes be declared exempt from .
1 taxation. Philadelphia Vs. Barber, 160 Pa. 123, 28 A. 644 (1894).
, Whatever is gratuitously done or given in relief of the public burden or for .
. the advancement of the public good is a "public charity." As no private or pecuniary
'1 return is reserved to the giver or any particular person, but all the benefit result— I
2 ing from the gift or act goes to the public. it is a "purely public charity,“ the I
I. word "purely" being equivalent to the word "wholly." Episcopal Academy vs. Phila-
‘I 9 delphia, 150 Pa. 565, 25 A. 55 (1892).
I “Constitution, Art. IX, Sec. 18, as amended 1928.
I 1Z‘Constitution, Art. IX, Sec. 2. .
‘ This section does not preclude the Legislature from exempting a certain class .
. of property from all taxes except a specified one. Lackawanna County vs. First , .
. National Bank, 94 Pa. 221 (188.0).
. '3 .

 I .

6 Pennsylvania I

II. Financial Powers and Limitations—Continued ;
n . '

C. Borrowing and Use of Credit ’

(1) State ‘
1 .

(a) No debt shall be created by or on behalf of the I

State, except to supply casual deficiencies of revenue, repel invasion, A
suppress insurrection, defend the State in war, or to pay existing debt; ;
and the debt created to supply deficiencies in revenue shall never exceed I
in the aggregate, at any one time, one million dollars: Provided, how— » I
ever, That the General Assembly, irrespective of any debt, may authorize I
the State to issue bonds to the amount of one hundred millions of dollars
for the purpose of improving and rebuilding the highways of the Common— 1
wealth.15 "
(b) Soldiers' Bonus ' o '

' In addition to the purposes stated in article I . .7,
nine, section four of this Constitution, [pan (a), above], the State may ;
be authorized by law to create debt and to issue bonds, to the amount of
fifty millions of dollars, for the payment of compensation to certain ‘
persons from this State who served in the Army, Navy, or Marine Corps of ‘
the United States during the war between the United States and Spain,
between the twenty—first day of April, one thousand eight hundred and f. *‘
ninety—eight, and the thirteenth day of August, one thousand eight hundred I
and ninety—eight, or who served in the China Relief Expedition in the Phil—
ippines or Guam, between the twenty—first day of April, one thousand eight :-
hundred and ninety—eight, and the fourth day of July, one thousand nine :
hundred and two, or who served in the Army, Navy, or Marine Corps of the ‘ -

. . . . I
United States during the World War, between the Sixth day of April, one I
' a;

1"7’Constitution, Art. IX, Sec. 4, as amended 1923. I . I

"This section was intended to restrict legislative acts which incurred obliga- I §
tions or permitted engagements on the credit of the State beyond revenue in hand or ‘
anticipated through a biennium, and establishes the principle that we must keep I
within current revenue and $1,000,000." Kelley vs. Earle, 320 Pa. 449 (1936).

This section was held to be a restriction or limitation on the power of the ‘
Legislature to borrow money with the exceptions clearly stated in the section. How- ,,
ever, an act authorizing the Commonwealth to negotiate temporary emergency loans to
defray its expenses during the next fiscal biennium, evidenced by tax-anticipation “ ’;
notes payable from current revenues levied and assessed‘during such biennium, was ,
held constitutional. The court stated, however, that the issue and payment of such :
are limited to moneys received from the revenues already provided for and to become
payable in the biennium. Kelly vs. Baldwin, 319 Pa. 55, 179 A. 756 (1935). g

The statutory appropriation of money does not in all cases create an enforceable I
debt. "A debt is not and cannot be created by merely making appropriations which i
direct expenditures in excess of anticipated revenue, and the legislature .cannot so A ,
enact. Appropriations in excess of estimated revenues and $1.000,000 are simply ;
ineffective; they incur no liability or obligation on the part of the State; they 2
simply abate pro rata to be within the biennium receipts and cash on hand." Ibid. -

See Georges Township vs. Union Trust Company, 293 Pa. 364, 145 A. 10 (1928);
and Scranton Electric Company vs. Old Forge Borough, 309 Pa. 73, 85, 165 A. 154 / I
(1932); and cases therein cited. a pf.

See p. '7, footnote 17.

, I
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 .i e
4 Pennsylvania 7
1 O
1 II. Financial Powers and Limitations—~Continued
. O
E, C. Borrowing and Use of Credit—Continued
(1) State—Continued
i, thousand nine hundred and seventeen and the eleventh day of November,
'. . one thousand nine hundred and eighteen.14
_1 (c) Toll Bridges
. In addition to the purposes stated in article
/ nine, section four, of this Constitution, [1). 6, par. (a):| , the General
Assembly may provide, by law, for the issue of bonds, to the amount of
ten millions of dollars, for the purpose of vauiring toll bridges, and
may, by law, provide that, upon the acquisition of any such bridge, tolls
- may be charged for the use thereof, sufficient to pay the interest ,and
. sinking fund charges on such bonds and the cost of the maintenance of
such bridges, until the bonds issued have been retired and such bridges
are freed of tolls.15
(d) The Governor, the Auditor General, and the State
4 . Treasurer, immediately upon the adoption of this amendment by the electors,
‘ \ may borrow an amount not exceeding twenty—five million dollars to defray
.1 the expenses of the State government for the biennium beginning June
first, one thousand nine hundred thirty—three; provided the General Assem—
1 bly, at its regular session of one thousand nine hundred thirty~three,
5,5. has authorized the borrowing of money for this purpose.16 ,
11 . (e) To provide for the payment of the present State
1 debt, and any additional debt contracted as aforesaid, the General Assem—
1: bly shall continue and maintain the sinking fund, sufficient to pay the
I accruing interest on such debt and annually to reduce the principal thereof
by a sum not less than two hundred and fifty thousand dollars; the said
i 3 sinking fund shall consist of the proceeds of the sale of the public works
it ~ or any part thereof, and of the income or proceeds of the sale of any
‘3 stocks owned by the Commonwealth, together with other funds and resources
J that may be designated by law. and shall be increased from time to time
1 by assigning to it any part of the taxes or other revenues of the State
0 not required for the ordinary and current expenses of government; and
1 unless in case of war, invasion or insurrection, no part of the said
‘ sinking fund shall be used or applied otherwise than in the extinguishment
§ of the public debt.” .
9 14Constitution. Art. IX, Sec. 16, adopted 1955.
15Constitution, Art. IX, Sec. 16, adopted 1953.
1. 16Constitution, Art. IX, Sec. 17, adopted 1935.
17Constitution, Art. IX, Sec. 11. .
. The Constitution does not make provision for refunding State loans. To liquidate ‘
debts incurred under Art. IX, Sec. 4 (p. 6, par. (a)), a sinking fund is required, 4

3 8 Pennsylvania I
II. Financial Powers and Limitations—Continued I.
. i
C. Borrowing and Use of‘ Credit—Continued I
(1) State—Continued I
‘ (f) All laws, authorizing the borrowing of money by I
I and on behalf of the State, shall specify the purpose for which the money " I
I is to be used, and the money so borrowed shall be used for the purpose I
specified and no other. 18 r I
(g) The credit of the Commonwealth shall not be pledged
or loaned to any individual, company, corporation or association, nor I
shall the Commonwealth become ajoint owner or stockholder in any company, I
: association or corporation.19 I
1 ' i f‘ I
, (2) Counties and Other Local Units I
3 (a) The debt of any county, city, borough, township, I -
I school district, or other municipality or incorporated district, except I
I as provided herein, and in section fifteen of this article [p. 9, last I
I paragraph of footnote 20:], shall never exceed seven (7) per centum upon fl I
I . . . .9. V I
I the assessed value of the taxable property therein, "5 *- "‘ nor shall I
. 1
1 any such municipality or district incur any new debt, or increase its f I
indebtedness to an amount exceeding two (2) per centum upon such asseSsed I
valuation of property, without the consent of the electors thereof at a I
public election in such manner as shall be provided by law.20 :2: =i= :1: I
r‘ I
. the money to be "used and applied" only for the extinguishment of such debts. Each II
debt for which the obligation of the Commonwealth is issued must be extinguished II
when it matures by funds appropriated to that purpose. In short, no express authority I;
to make recurrent loans, by the issuance of refunding or substituted bonds for those .
purchased or canceled, is given by the Constitution and such power is impliedly h I
denied. Montgomery vs. Martin, 294 Pa. 25, 143 A. 505 (1928). 3
18Constitution, Art. IX, Sec. 5. » I
' Under this section every act which authorizes- the creation of a debt must state ‘I;
distinctly, without reference to other sources of information, a single purpose for I
. which the money is to be borrowed; the word "specify" meaning tomention specifically. ‘
to state in full and explicit terms, to name expressly or particularly. Hollinger 1
vs. King, 282 Pa. 157, 127 A. 462 (1925). N I.
An act authorizing the Governor to borrow money "for such purposes as the Con- I ,
stitution authorizes the state to issue bonds" was held to permit the use of the .I
proceeds for any of the six purposes specified in Art. IX, Sec. 4 (p. 6, par. (a)), g
and was not a sufficient compliance with the above rule. Ibid. I
19Constitution, Art. IX, Sec. 6. I
goConstitution, Art. IX, Sec. 8, as amended 1920. I
Special provisions of this section applying to the city of Philadelphia permit A ,I
an increase in the total debt to 10 percent of the assessed valuation. The section II-
I‘urther contains special provisions relating to utilities. f
Sec. 15 of Art. IX of the Constitution sets out special provisions relative to I
obligations issued or to be issued for the construction or acquisition of waterworks, .;
subways, and underground or street railways. Municipalities and counties (with the II
exception of Philadelphia) may with the assent of the voters incur additional debt @ I;
for these purposes. I
. :
I f

 f 9
. Pennsylvania 9
, O
1 II. Financial Powers and Limitations——Continued
. 0
{ C. Borrowing and Use of Credit-—Continued
f (2) Counties and Other Local Units——Continued
‘ (b) Any county, township, school district or other
a municipality incurring any indebtedness shall, at or before the time of
[ so doing, provide for the col