Opinion Number

Dear Mr. Austin:

You requested the opinion of this office concerning whether a municipality may use utility funds to subsidize its general operations such that a significant transfer of utility revenues to a municipalitys' general fund constitutes an illegal tax.

Municipal corporations are given the power to construct, acquire, extend, or improve any revenue producing public utility and property necessary thereto, either within or without its boundaries, and may operate and maintain the utility in the interest of the public. R.S.33:4162. "Revenue producing public utility" is defined in R.S.…