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James E. Arnold & Associates Wins in Ohio Supreme Court

Columbus, Ohio Law Firm Wins in Ohio Supreme Court

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Ohio Supreme Court holds that the Ohio Constitution does not prohibit a county from using motor vehicle and gas tax (MVGT) revenues to pay portion of insurance covering operations of the county engineer’s office.

James E. Arnold & Associates won a victory in the Ohio Supreme Court on November 27, 2012 with far-reaching effect on all counties in Ohio. Represented by Gerhardt “Gage” Gosnell II, the Knox County Commissioners convinced the Supreme Court to hold that the Ohio Constitution allows the use of motor vehicle and gas tax (MVGT) revenues to pay the portion of the county’s insurance premium covering the county engineer’s highway department. The Court’s unanimous (7-0) decision reversed the court of appeals and effectively overruled the results of a prior 2006 Supreme Court’s decision.

The case involved the proper application of Section 5(a), Article XII of the Ohio Constitution, which restricts the use of MVGT funds for only “highway purposes.” MVGT taxes are collected by the state and distributed to the county engineers in the 88 counties on a pro-rata basis. They serve as the counties’ primary funding source for local road construction, repair and maintenance projects.

Knox County is one of 62 Ohio counties that self-insure through contributions to the County Risk Sharing Authority (CORSA), a pool that provides coverage to each of its member counties for their potential liability for claims for various types of loss or damage, including loss or damage arising from the operations of the county engineer’s office.

In 2007, CORSA calculated Knox County’s self-insurance premium for 2007-2008 and sent an invoice for that amount to the Knox County Commissioners. The commissioners paid the premium from the county’s general revenue fund, and subsequently sent an invoice to the office of county engineer James Henry, stating that the commissioners had calculated the engineer’s office “share” of the county’s CORSA premium, and requesting a transfer of that amount from the engineer’s MVGT account to the general fund. The County Engineer refused, asserting that the allocated portion of the CORSA premium was not directly related to a highway purpose and therefore MVGT revenues could not be used to pay that charge under the Ohio Constitution.

After an evidentiary trial in Knox County and a decision by the Fifth District Court of Appeals in favor of the County Engineer, the Supreme Court reversed, specifically finding that using MVGT funds to pay the CORSA insurance premium was a proper highway purpose:

“The operations of the engineer’s highway department have an inherent risk. This risk cannot be separated from the highway department’s operations and is thus directly connected to a highway purpose. The evidence establishes that the CORSA premiums recognize this risk of loss inherent in the operation, activities, and duties of the engineer that are directly connected with the construction, maintenance, and repair of the highways or the enforcement of traffic laws, in the calculation of the premium.”

According, the Supreme Court held that Article XII, Section 5(a) of the Ohio Constitution authorizes the use of MVGT funds to pay a county’s costs of participating in a joint self-insurance pool attributable to covering the risk of liability and loss resulting from the operations of a county engineer’s highway department.

Click here to read the Supreme Court’s decision in its entirety.

If you have concerns regarding business and commercial litigation, appeals cases, or any other referenced practice area, contact James E. Arnold & Associates, LPA. Our lawyers represent clients in the state of Ohio including Columbus, Cincinnati, Cleveland, and Dayton.

Contact us today at 614-460-1600 or through our online contact form.

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James E. Arnold & Associates, LPA


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Columbus, Ohio 43215

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