First Baptist Church of St. Paul v. City of St. Paul
884 N.W.2d 355
| Minn. | 2016Background
- Saint Paul imposed an annual right-of-way (ROW) assessment on ~81,000 properties in 2011 to fund sweeping, snow removal, patching, lighting, signs, tree trimming, and other street/right-of-way maintenance. Exemptions included certain public properties and some non-abutting parcels.
- First Baptist Church and Church of St. Mary were assessed $15,705.90 and $8,659.02 respectively and appealed, arguing the charge is a tax that violated constitutional limits (uniformity and special-benefit requirements) and was not roughly proportional.
- The City characterized the ROW assessment as a police-power fee for services, collected in segregated accounts and tied to frontage and property class; the City’s charter and administrative code also used “service charge” language but invoked special-benefit language in Chapter 14.
- The district court and court of appeals treated the assessment as a police-power fee and applied a reasonableness standard, granting summary judgment to the City; this Court granted review.
- The Minnesota Supreme Court analyzed whether the ROW assessment is a tax (exercise of taxing power) or a police-power fee; it concluded the assessment is a tax because (1) charter/code language and City policy invoke special-benefit and uniformity constraints, (2) the charge is broadly imposed citywide to raise revenue for public benefits, and (3) the assessed services principally benefit the public generally rather than individual payers.
- Because the assessment is a tax subject to constitutional restrictions, the Court reversed and remanded for factual determination of special benefit (the amount, if any) to the Churches’ properties, noting genuine factual disputes (appraisals v. assessment roll).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Tax vs. fee: Is the ROW assessment a tax (taxing power) or a fee (police power)? | ROW is a tax and must meet constitutional limits (uniformity, special benefit). | ROW is a police-power service charge/fee for right-of-way maintenance and regulation; reasonableness governs. | ROW assessment is a tax (exercise of taxing power). Charter/code language and program substance show primary purpose is revenue for public benefits. |
| 2. Uniformity: Is the assessment imposed uniformly on the same class? | Assessment violates uniformity because rates vary by property class and location. | Rates reflect differing property character/location and service relationship; properly classified. | Court did not decide merits; applied tax framework and remanded for factual inquiry into special benefit and related uniformity issues. |
| 3. Special-benefit/excess: Does assessment exceed special benefit to properties? | Appraisals show no increase in market value; assessment likely exceeds any special benefit. | Assessment roll and presumption of validity support the assessment amount. | Material factual dispute exists about amount of special benefit; remand required for factfinding. |
| 4. Rough proportionality and basis (frontage): Is frontage-based method roughly proportional to special benefit? | Frontage formula is not roughly proportional and overcharges some property types (e.g., churches). | Frontage is a reasonable, administrable proxy; different rates account for use/location. | Court remanded; proportionality depends on factual determination of special benefit, so summary judgment inappropriate. |
Key Cases Cited
- Am. Bank of St. Paul v. City of Minneapolis, 802 N.W.2d 781 (Minn. Ct. App. 2011) (treated a nuisance-abatement charge as a police-power fee)
- Country Joe, Inc. v. City of Eagan, 560 N.W.2d 681 (Minn. 1997) (police power cannot be used to enact revenue-raising measures; primary purpose test)
- Buettner v. City of St. Cloud, 277 N.W.2d 199 (Minn. 1979) (special assessments are taxes for local improvements)
- Reserve Mining Co. v. State, 310 N.W.2d 487 (Minn. 1981) (look beyond form to substance when characterizing charges)
- Brewster v. City of Pocatello, 768 P.2d 765 (Idaho 1988) (street-maintenance fee held to be tax where charge generated general revenue rather than regulating payers)
- Covell v. City of Seattle, 905 P.2d 324 (Wash. 1995) (residential street utility charge characterized as tax where relationship between charge and benefit was missing)