N. W. BRIDGES, ON BEHALF OF HIMSELF AND ALL OTHER CITIZENS AND TAXPAYERS OF THE CITY OF CHARLOTTE, NORTH CAROLINA, V. CITY OF CHARLOTTE, A MUNICIPAL CORPORATION; L. L. LEDBETTER, TREASURER OF SAID CITY; BOARD OF SCHOOL COMMISSIONERS OF THE CITY OF CHARLOTTE, A BODY CORPORATE; AND BOARD OF TRUSTEES TEACHERS’ AND STATE EMPLOYEES’ RETIREMENT SYSTEM.
In the Supreme Court of North Carolina
(Filed 24 June, 1942.)
221 N.C. 472
Ch. 562, Public Laws 1933, abolished special tax and special charter school districts as then constituted, and retained them solely as local administrative units of the State school system.
2. Same—
A city constituting a special charter school district prior to the enactment of ch. 562, Public Laws 1933, was stripped of its character as a municipality and its board of school commissioners abolished as an agency of the municipality in the operation of schools within the district, and by operation of the Act the municipality, in the discharge of this function, became an administrative agency of the State school system.
3. Taxation § 4—
The State is not a municipality within the meaning of the Constitution, and since a city or county, in the operation of public schools within its territory, is not a municipality but an administrative agency of the State, such administrative units, in imposing taxes necessary to the maintenance of public schools, is not required to submit the question to a vote, the limitations imposed by
4. Schools § 9—
The General Assembly is charged with the duty of providing a system of public schools by mandate of
5. Same: State § 5a—
The expression of legislative policy that the Teachers’ and State Employees’ Retirement Act has a definite relation to the just and efficient administration of the public school system is conclusive, and a tax imposed by a city to raise funds with which to pay its contribution to the Retirement Fund for salaries of teachers paid or supplemented by it, as required by Public Laws 1941, ch. 25, sec. 8 (c), is for a purpose necessary to the maintenance of the public school system within its territory.
6. Schools §§ 8, 31—
Although an administrative unit of the State public school system is required by the statute to submit to its voters the question of supplementing State funds to conduct schools of higher standards and longer terms,
7. Schools § 9—
The Constitution requires that a six months term of public school be maintained as a minimum, and places the duty upon the General Assembly to meet this requirement and confers authority upon it to determine the quality and extent of a system of public schools beyond this minimum which the State is able to provide.
8. State § 5a: Constitutional Law § 12—
Benefits received by State employees under the Retirement Fund are deferred payments of salary for services rendered, and therefore such payments do not offend
9. Taxation § 4—
Where an administrative unit of the public school system has voted a tax to supplement State funds to maintain schools of higher standards within its territory, it is required to contribute to the State Retirement Fund for teachers whose salaries are paid or supplemented by it, ch. 25, sec. 8 (c), ch. 143, sec. 1, Public Laws 1941, and when the supplementary tax theretofore voted by it is insufficient to provide such contribution, the unit may impose a tax to raise funds for this purpose without submitting the question to a vote.
10. Same—
The charter provision of a city that the question of supplementing State funds for its public schools must be submitted to a vote, sec. 55 (4), ch. 366, Public-Local Laws 1939, does not require that when the city has assumed the burden of supplementing State funds a tax necessary to provide funds for contributions to the State Retirement Fund for salaries of teachers paid or supplemented by it should be submitted to a vote, the State Retirement Act not being in legal contemplation of the charter provision, and the charter provision being ineffective to prevent a levy required by the subsequent legislative mandate.
11. Taxation §§ 1, 5: State § 5a—
A tax imposed to raise moneys required by law to be paid to the State Employees’ Retirement Fund is for a public purpose, as having a definite relation to the efficient operation of the public school system, and the Act provides benefits to thousands of teachers and employees of this State without discrimination, and therefore the tax does not offend
12. Constitutional Law § 6b—
The courts should not declare an act of the General Assembly unconstitutional unless it is so beyond a reasonable doubt.
STACY, C. J., not sitting.
BARNHILL, J., concurring.
WINBORNE, J., joins in concurring opinion.
APPEAL by plaintiffs from Olive, Special Judge, 16 March, 1942. From MECKLENBURG. Affirmed.
The Board of Trustees Teachers’ and State Employees’ Retirement System was made a party to the action by consent, and was permitted to adopt the answer of its codefendants.
The Act referred to provides for a retirement fund for teachers in the public schools, a part of which is raised out of public funds and a part by deductions from teachers’ salaries. By its terms, local administrative units which supplement the items of school expense and conduct schools of higher standard or longer term than those afforded by State support for the eight months term are required to contribute proportionally to the State fund, and the taxing authorities therein are required to provide the necessary funds therefor. Pertinent sections are as follows:
“Each Board of Education of each county and each Board of Education of each city, and the employer in any department, agency or institution of the State, in which any teacher receives compensation from sources other than appropriations of the State of North Carolina shall deduct from the salaries of these teachers paid from sources other than State appropriations an amount equal to that deducted from the salaries of the teachers whose salaries are paid from State funds, and remit this amount to the State Retirement System. City Boards of Education and County Boards of Education in each and every county and city which has employees compensated from other than the State appropriation shall pay to the State Retirement System the same per centum of the salaries that the State of North Carolina pays: Provided, that for the purpose of enabling the County Boards of Education and the Board of Trustees of city administrative units to make such payment, the tax levying authorities in each such city or county administrative unit are hereby authorized, empowered and directed to provide the necessary funds therefor.” Chapter 25, Public Laws of 1941, section 8, subsection (c).
Section 1, chapter 143, Public Laws of 1941, adds:
“Provided, that it shall be within the discretion of the County Board of Education in a county administrative unit and the Board of Trustees in a city administrative unit, with the approval of the tax levying authorities of such unit, to provide for the payment from local tax funds of any amount specified in subsection (c) of this section in excess of the
The Charlotte city schools were operated under special charter until the enactment of the School Machinery Act of 1933, chapter 252, Public Laws of 1933. Thereafter the Charlotte district was set up as a city administrative unit for the purpose of operating schools under that Act, and has since continued as such city administrative unit.
The School Machinery Act of 1933, pertinent features of which were re-enacted in 1935 and in 1939, contains the following provisions:
“That the county board of education in any county administrative unit and the board of trustees in any city administrative unit, with the approval of the tax levying authorities in said county or city administrative unit and the State School Commission, in order to operate the schools of a higher standard than those provided for by State support, but in no event to provide for a term of more than 180 days, may supplement any object or item of school expenditure: PROVIDED, that before making any levy for supplementing State budget allotments an election shall be held in each administrative unit to determine whether there shall be levied a tax to provide said supplemental funds, and to determine the maximum rate which may be levied therefor.” Section 17.
Following the procedure laid down in the Act, the Charlotte City Administrative Unit, on 23 March, 1935, voted supplements to State support of the schools, fixing the maximum tax limit for that purpose at twenty-five cents on the one hundred dollar property valuation, and proceeded to conduct a nine months school term and to pay teachers’ salaries.
The local school board filed its supplementary budget for the fiscal year beginning 1 July, 1941, providing for the expenditure of the entire special tax under the 25c levy for purposes other than the payment of the required sums to the Teachers’ Retirement Fund, and requested that the sum budgeted in connection with the Retirement Fund, approximately $17,124.75, be raised from sources other than the 25c special school levy. The levy was made and the taxes partially collected, and the authorities concerned propose to proceed with the collection of the rest of the taxes and to make the required contribution to the State Retirement Fund, if not contrary to law.
Taliaferro & Clarkson for plaintiffs, appellants.
Tillett & Campbell, Attorney-General McMullan, and Assistant Attorney-General Patton for defendants, appellees.
SEAWELL, J. No exception was made in the court below to the manner in which this suit is constituted, or to want of capacity of some of the defendants, as sued, in relation to the subject matter of the action. No doubt the parties desired a decision more broadly dealing with the merits of the case, as voiced by the challenge to the constitutionality of the Retirement Act and its interpretation in connection with related statutes, particularly the tax limitation adopted by popular vote for supplements under the School Machinery Act. We review the case in that light.
But the joinder of parties defendant and the capacity in which they are sued suggest that plaintiffs considered themselves as dealing with an attempted exercise of authority by the city of Charlotte as a municipality and with the “Board of School Commissioners of the City of Charlotte,” formerly an agency of the municipality, as a corporate body retaining the relation to the schools in that district given it in the special act of incorporation. That is not the case. The present situation will be much less confusing if we remember that the Charlotte School District, operating as a special charter district, came squarely within the revolutionary fiat of section 4, chapter 562, Public Laws of 1933: “All school districts, special tax, special charter or otherwise, as now constituted for school administration or for tax levying purposes, are hereby declared non-existent.” Under the further provisions of this Act, the Charlotte district became a city administrative unit, and the trustees of the former district were retained only as the local administrative body of that unit, shorn of all administrative authority other than that which they get from the School Machinery Act. This concession was made to the governing body of the old district, no doubt, to cushion the shock of total liquidation and out of deference to the importance of the trusts that had been committed to them—the magnitude of the schools—and to conserve the experience and interest built up in administration. But here the old regime ended and the new dispensation began. The unit was now a part of the Public School System and henceforth an agency of the State. In this is found the principle upon which our decision must rest. Its application will be as brief as a full understanding of the subject will permit.
The plaintiffs contend that the law is unconstitutional and invalid; that the expenditure required comes within the purview of
1. The Constitution of North Carolina recognizes that it is the duty of the State to establish and maintain “a general and uniform system of public schools, where tuition shall be free of charge to all children of the State between the ages of six and twenty-one years.”
The plea that the levy of such a tax by a county, without submission to popular vote, is prohibited by
There was in the mind of the Court a clear comprehension of the functions and powers of the State and of the agencies set up to perform this duty, and there was no confusion at any time as to where the ultimate duty and power was seated; and none, we think, as to the consequences which must follow a delegation of this duty and power as a matter of convenience of administration to the agencies selected. Nor should there be any doubt today that maintenance of the public schools and the furnishing of those things which are reasonably essential to that end are within the mandatory provision of the Constitution, unaffected by the “necessary expense” provision contained in the municipal section of the Constitution.
The State is not a municipality within the meaning of the Constitution. It seems to us self-evident that it may perform the duties required of it by the Constitution, as well as exercise those powers not otherwise prohibited, without embarrassment by constitutional limitations expressly operating on municipalities alone.
This view is clearly expressed in Frazier v. Commissioners, 194 N. C., 49, 61, 138 S. E., 433, from which we quote:
To the same effect are Owens v. Wake County, 195 N. C., 132, 136, 141 S. E., 546; Lacy v. Bank, 183 N. C., 373, 380, 111 S. E., 612; Lovelace v. Pratt, 187 N. C., 686, 689, 122 S. E., 661; Tate v. Board of Education, 192 N. C., 516, 520, 135 S. E., 336.
From these cases, as well as from the reasoning of the matter, we gather a clear impression that whatever may be the limitations on a municipality with respect to its ordinary government under
Attention should be directed to the distinction drawn in the decisions between agencies created for administrative purposes within the public school system and charter districts incorporated by special acts of the Legislature and empowered to maintain and conduct schools independently of it, which do not proceed on the authority as it comes from the State, through
The suggestion that the Retirement Plan and payments of benefits thereunder are intrinsically not necessary purposes for maintaining the public school system is no doubt advanced under the same contention that taxation and expenditure under the Retirement Act must necessarily come within the limitation of
The extent to which the measures provided in the Retirement Act may be auxiliary to the efficient administration of the public school
We understand that what courts appropriately refer to as the “mandate” of
It is true, as suggested, that the city administrative unit, under the provisions of the School Machinery Act, voluntarily undertook to supplement certain items of State expenditure and thereby undertook to conduct a school of higher standard and longer term than that provided by State support. But once having assumed the burden, albeit voluntarily, the unit did not thereby separate itself from the school system, or break the thread of constitutional authority, or exempt itself from the consequences of the burden it assumed, or the additional trusts imposed by law.
The provision in the School Machinery Act under which a local unit desiring to supplement State support for the schools is required to submit the question to a popular vote is not in deference to
The theory that the obligation of the Constitution extends no further than the six months school term, the minimum requirement expressed in
2. The plaintiffs argue that unless the payment out of the Retirement Fund is in the nature of a salary, it is a gratuity and offensive to
It is conceded by the plaintiffs that if payment from the fund is in the nature of salary or compensation for services rendered, it is at least not offensive to
We do not have to decide whether the cited section of the Constitution narrows its exception to payment for services currently rendered. The appellants are content to have the payments from the Retirement Fund, hypothetically, at least, regarded as deferred payments of salary. The appellees argue, and sustain the argument, we think, by convincing authority from jurisdictions where the question has been raised, that the benefits from the Retirement Fund may be so regarded. Schieffelin v. Berry, 217 App. Div., 451, 216 N. Y. Supp., 367; People ex rel. Kroner v. Abbott, 274 Ill., 380, 113 N. E., 696; Cobbs v. Home Ins. Co., 18 Ala. Ap., 206, 91 So., 627; Whitehead v. Davie, 189 Cal., 715, 209 Pac., 1008; Talbott v. Independent School District of Des Moines, 230 Iowa, 949, 299 N. W., 556; Retirement Board v. McGovern, 316 Pa., 161, 174 Atl., 400.
3. It is conceded that the contribution of the unit to the State Retirement Fund might be paid out of local funds collected under the 25c levy
Moreover, the funds so collected are not supplemental in character and are not locally expended. They go into a general State fund, out of which payments are made irrespective of the source of origin.
We are likewise of the opinion that the contemplated levy is not limited or controlled by section 55 (4) of the City Charter—chapter 366, Public-Local Laws of 1939. The provision there is:
“The City Council of the City of Charlotte shall levy an annual tax for the support and maintenance of said public schools in the City of Charlotte in accordance with the Public Laws of the State of North Carolina as the same may now or hereafter be enacted and in any amount which is now or may hereafter be approved by a vote of the people of said city for said purposes.”
We do not think that the subject dealt with in the Retirement Act of 1941 was within legal contemplation of this law. At most, it gives authority for further taxation in the support of schools as might be approved by a vote of the people, but does not prevent a levy under an appropriate State law, irrespective of the statute. We regard the point as settled adversely to appellants’ contention by Julian v. Ward, 198 N. C., 480, 152 S. E., 401.
4. The challenge to the Retirement Act as contravening
The contention that the Act does not comprehend a public purpose cannot be sustained. If the Retirement Plan has that relation to the public school system which the legislative policy supposes it to have, and
The Act includes thousands of teachers and employees of the State, as a class and without discrimination. If this is not sufficient to satisfy the “public purpose” requirement of the Constitution, the benefit they receive may be regarded as incidental. The benefit to the general public comes from a policy, widely approved, and adopted here, not without careful and exhaustive study, and with appreciation of its effect upon the entire citizenry, in the enhancement of the State‘s largest and most important enterprise, the conduct of the public schools. The relation of the Retirement Plan to the public school system has been fully discussed above, and the discussion will not be repeated here. It is sufficient to say that the expected improvement in standards of service, and the stabilization of teacher employment, are sufficient to constitute a public purpose, and justify the imposition of the tax.
We conclude that the Act is a constitutional and valid expression of the legislative will, both generally and in its application to the local administrative units with which it deals. The contribution to the State Retirement Fund required of the Charlotte City Administrative Unit is mandatory in character, does not require submission to popular vote, and is not affected by the maximum tax rate heretofore adopted by this unit in voting supplements to the schools or the suggested limitations of the city charter.
The acting defendants are in the exercise of lawful powers and are not subject to judicial restraint.
The judgment of the court below is
Affirmed.
STACY, C. J., not sitting.
BARNHILL, J., concurring: The majority opinion concludes that the Teachers’ and State Employees’ Retirement Act of 1941 is Constitutional and that the special levy of 2c by the tax-levying authorities of Charlotte to provide for the payment of the local employer‘s contribution to the retirement fund is valid. I concur. In so doing I wish to comment on the question of the validity of the tax.
In the performance of this duty the Legislature enacted ch. 562, Public Laws 1933, providing for a State-wide, uniform system of public schools for a term of eight months. This act creates two types of local administrative units—county and city. The city unit, in respect to schools, has the same rights, powers and duties, and operates and is dealt with, as a county. Section 4, ch. 562, Public Laws 1933. The city as an administrative unit and the municipality as such are treated as separate entities.
Any local administrative agency, with the approval of the tax-levying authorities within the agency and the State School Commission, in order to operate schools of a higher standard than those provided by the State support, may supplement any object or item of school expenditure, including an extended term not exceeding a total of 180 days. The tax levy to provide the funds with which to supplement must first be approved by the electorate. The amount raised by taxation becomes a part of the total allotment for operational expenses and must be budgeted and approved by the State School Commission. Section 17. The funds of the unit, including the part raised by local taxation, is audited by the school authorities, section 20 (2), and are disbursed under the regulatory provisions of the statute.
Hence, it appears that the State supported school within the local administrative unit, as thus supplemented, does not, by virtue of the supplement, become a separate school entity. It remains an integrated part of the State School System. The discretion vested in the local authorities is the discretion to provide or not to provide higher standards, including an extended term. The “school of higher standards,” once established, remains a part of the State-wide system under the general supervision of the State School Commission until the special levy is revoked or changed by an election. Section 17.
Having elected to supplement and to provide an extended term of higher standard the local unit “comes in” cum onere. It must bear its proportionate part of the burdens then existing or thereafter imposed upon the State system as a necessary part thereof.
The Retirement payment provided by this Act constitutes delayed compensation in consideration of services rendered. It is compensation for public services. Its purpose is to induce experienced and competent teachers to remain in service and thus promote the efficiency and effectiveness of the educational program. S. v. Levitan, 181 Wis., 326, 193 N. W., 499. The objective sought and the means adopted were within the legislative discretion of the General Assembly.
Any local administrative agency which has elected to supplement the State term under section 17 of the 1933 Act must comply with the provisions of the Retirement Act. The language of the 1941 statute is mandatory. “. . . each board of education of each city . . . in which any teacher receives compensation from sources other than appropriations of the State of North Carolina shall deduct from the salaries of these teachers paid from sources other than State appropriations an amount equal to that deducted from the salaries of the teachers whose salaries are paid from State funds, and remit this amount to the State Retirement System. City Boards of Education . . . in each . . . city which has employees compensated from other than the State appropriation shall pay to the State Retirement System the same per centum of the salaries that the State of North Carolina pays.” Section 8, (1) (c), Public Laws 1941. The taxing authorities within the agency must provide the funds necessary to pay the local employer‘s contribution and “for the purpose of enabling . . . the Board of Trustees of city administrative units to make such payment, the tax levying authorities in each such city . . . unit are hereby authorized, empowered and directed to provide the necessary funds therefor.” Section 8, (1) (c). Public funds ordinarily are raised by taxation and this language not only empowers the taxing authorities in the local units to levy the necessary tax but it compels it. In my opinion this is the only construction the language permits.
It was argued here that by ch. 143, Public Laws 1941, the local agency was granted discretionary authority to accept or reject the provisions of the Retirement Act. I do not so read this statute. It gives the local agency authority “with the approval of the tax levying authorities of such unit, to provide for the payment from local tax funds of any amount specified in subsection (c) of this section (section 8, [1] [c], ch. 25, Public Laws 1941), in excess of the amount to be paid to the Retirement System on the basis of the State Salary Schedule and term.” In the event the local agency has sufficient funds derived from the levy under the 1933 Act with which to make its contribution without any additional
It is well to note that this same Act provides that “in case the salary is paid in part from State funds and in part from local funds, the local authorities shall not be relieved of providing and remitting the same per centum of the salary paid from local funds as is paid from State funds. In case the entire salary of any teacher, as defined in this Act, is paid from . . . local funds, the . . . city paying such salary shall provide and remit to the Retirement System the same per centum that would be required if the salary were provided by the State of North Carolina.” Here again the Legislature makes participation by the local agency which has supplemented the State term compulsory.
It follows that the tax levied for the purpose of enabling the Charlotte School District to comply with the requirements of section 8, (1) (c), of ch. 25, Public Laws 1941, is authorized by the Legislature. Tate v. Board of Education, 192 N. C., 516, 135 S. E., 336. It was levied for an administrative agency of the State School System established by the General Assembly pursuant to
WINBORNE, J., joins in concurring opinion.