In re APPLICATION OF THE COUNTY COLLECTOR OF DU PAGE COUNTY FOR JUDGMENT FOR TAXES FOR THE YEAR 1993 (County Collector of Du Page County, Appellee, v. ATI Carriage House, Inc., et al., Appellants).
No. 85204
Supreme Court of Illinois
June 17, 1999
October 4, 1999
326 Ill. 2d 326
JUSTICE MILLER delivered the opinion of the court:
RATHJE, J., took no part. HEIPLE, J., joined by HARRISON, J., dissenting.
Joseph E. Birkett, State‘s Attorney, of Wheaton (Margaret M. Healy and Anna B. Harkins, Assistant State‘s Attorneys, of counsel), for appellee.
John M. Izzo, of Scariano, Kula, Ellch & Himes, Chtd., of Chicago Heights, for amici curiae Du Page County School District 11 et al.
Everett E. Nicholas, Jr., and Heidi A. Katz, of Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd., of Chicago, for amici curiae Illinois Association of School Boards et al.
A group of taxpayers filed objections in the circuit court of Du Page County to the application of the Du Page County collector for judgment on their 1993 real estate taxes, which the objectors had paid under protest. Of relevance here, the objectors contended that one category of tax levy was void because it violated section 17-1 of the School Code (
The facts underlying the present controversy are not in dispute. On November 21, 1994, a number of taxpayers filed objections in the circuit court of Du Page County under section 194 of the Revenue Act of 1939 (Ill. Rev. Stat. 1991, ch. 120, par. 675 (now codified at
The taxpayers later designated Centerpoint Properties Corporation as the lead objector. The parties agreed that Itasca School District No. 10 would serve as a test case, and that all similarly situated school districts would be bound by the resolution of the Itasca case. The parties submitted a stipulation of facts to the trial court regarding the Itasca school levy at issue here. According to the stipulation, Itasca School District No. 10 operates on a fiscal year that runs from July 1 through June 30. The district adopted its budget for fiscal year 1993-94 on May
The objectors argued that the district‘s 1993 tax levy violated section 17-1 of the School Code and was therefore void. Section 17-1 provides, “If the beginning of the fiscal year of a district is subsequent to the time that the tax levy for such fiscal year shall be made, then such annual budget shall be adopted prior to the time such tax levy shall be made.”
The appellate court, with one justice dissenting, affirmed the dismissal of the objection. The court concluded that a tax levy filed by a cash-basis school district before the December deadline is a tax levy for the fiscal year in which it is filed, regardless of when the school district intends to spend the money resulting from the levy. 294 Ill. App. 3d at 874. The court therefore concluded that section 17-1 did not require the Itasca district to draft a budget for a subsequent fiscal year before making a tax levy that would produce revenue that would be used in the later fiscal year. The dissenting justice disagreed, believing that section 17-1 did require the district to formulate a budget before making a levy. 294 Ill. App. 3d at 875 (McLaren, J., dissenting). We allowed the objectors’ petition for leave to appeal. 177 Ill. 2d R. 315(a). The Illinois Association of School Boards and the Illinois Association of School Administrators were granted leave to submit a joint brief as amici curiae in support of the collector, as were a number of school districts located in Du Page, Will, and Kane counties. 155 Ill. 2d R. 345.
Section 17-1 of the School Code prescribes budgeting procedures for school districts with fewer than
“The board of education of each school district under 500,000 inhabitants shall, within or before the first quarter of each fiscal year, adopt an annual budget which it deems necessary to defray all necessary expenses and liabilities of the district, and in such annual budget shall specify the objects and purposes of each item and amount needed for each object or purpose.
***
The board of education of each district shall fix a fiscal year therefor. If the beginning of the fiscal year of a district is subsequent to the time that the tax levy for such fiscal year shall be made, then such annual budget shall be adopted prior to the time such tax levy shall be made.”
105 ILCS 5/17-1 (West 1996).
The controversy in the present case centers on the phrase “for such fiscal year” in the provision in section 17-1 that begins, “If the beginning of the fiscal year of a district is subsequent to the time that the tax levy for such fiscal year shall be made, ***.” The objectors contend that the plain language of the statute requires a district to adopt a budget for a fiscal year before it makes a levy that will produce funds to be used during that fiscal year. The objectors point out, in support of their construction, that the preposition “for” may be defined as meaning “as a preparation toward,” “in view of,” or “having as goal or object.” Webster‘s Third New International Dictionary 886 (1986). According to the objectors, the phrase “for such fiscal year” simply means, in the case of a cash-basis entity like District 10, the next fiscal year. In response, the collector asserts that the provision at issue is ambiguous and that it may also mean the fiscal year in which the levy is made. In support of the collector‘s interpretation, amici Illinois Association of School Boards and Illinois Association of School Administrators note that “for” has meanings besides those cited by the objectors, and that it may also mean “on account
As the appellate court observed, the objectors bear the burden of establishing the invalidity of the levy, for we will presume that the taxes were legally levied. People ex rel. Redfern v. Penn Central Co., 47 Ill. 2d 412, 418 (1971). The fundamental rule of statutory construction is to ascertain and give effect to the intention of the legislature. Nottage v. Jeka, 172 Ill. 2d 386, 392 (1996); Business & Professional People for the Public Interest v. Illinois Commerce Comm‘n, 146 Ill. 2d 175, 207 (1991). We believe that the challenged provision may reasonably be interpreted in more than one way and therefore is ambiguous. See Advincula v. United Blood Services, 176 Ill. 2d 1, 18 (1996); People v. Jameson, 162 Ill. 2d 282, 288 (1994). The variety of different senses in which “for” is used suggests that the phrase “for such fiscal year” might refer either to the fiscal year in which the proceeds of the levy will be spent, as the objectors argue, or to the fiscal year in which the levy is made, as the collector contends.
When a statute is ambiguous, it will be given a construction that is reasonable and that will not produce absurd, unjust, or unreasonable results, which the legislature could not have intended. Collins v. Board of Trustees of the Firemen‘s Annuity & Benefit Fund, 155 Ill. 2d 103, 110 (1993). It is appropriate here, then, that we consider which interpretation better effectuates the legislative intent and is more consistent with the goals of the legislation of which this provision is a part. In the present case, we believe that the construction advanced by the collector is more consistent with other provisions
First, the provision at issue should be construed in a manner that is consistent with other, similar provisions. Notably, other tax-related provisions identify a tax levy by the year in which it is made, rather than by the year in which the proceeds from the levy are received or spent, as the objectors argue here. For example, section 9—175 of the Property Tax Code provides, “The owner of property on January 1 in any year shall be liable for the taxes of that year ***.”
Language elsewhere in section 17-1 suggests that a school district‘s budget will ordinarily be drafted around the time it is scheduled to take effect, rather than months in advance. Section 17-1 requires that a budget “contain a statement of the cash on hand at the beginning of the fiscal year, an estimate of the cash expected to be received during such fiscal year from all sources, an estimate of the expenditures for such fiscal year, and a statement of the estimated cash expected to be on hand at the end of such fiscal year.” Under this provision, then, a budget is
In addition, we note that the objectors’ interpretation would require cash-basis school districts to budget far in advance of the time when those districts would ordinarily know about their income and expenses for that fiscal year. Here, the budget for the district‘s next fiscal year, beginning in July, was adopted two months earlier, during the preceding May. The objectors, however, would require districts to formulate their budgets long before the customary beginning of the fiscal year, given the December deadline for filing tax levies (
We do not believe that long-range forecasting of the type that would become necessary under the objectors’ interpretation is consistent with the policies or provisions of the school budgeting process. Much information regarding expected income and expenses cannot be known nine or more months in advance of the next fiscal year, as the objectors would require. For example, as noted by amici Illinois Association of School Boards and Illinois Association of School Administrators in their joint brief, a district‘s assessed valuation against which the district‘s next tax levy will be extended is not finally
Uncertainty on the expense side of the ledger would also be inconsistent with a requirement that districts formulate their budgets nine or more months in advance of a fiscal year. Fluctuations in enrollments, increases in staffing costs resulting from subsequent contract negotiations, and other variables could undermine the utility of budgets drafted for years in advance of their operation. To be sure, section 17-1 permits districts to amend their budgets. To do so, however, a district would once again be required to satisfy the notice and hearing requirements that govern the budget-making process. In addition, a district making a late amendment to its budget would not be able to adjust the amount of its levy, for the December deadline for certifying the levy could have passed by that time.
Thus, rather than advancing the objectors’ professed goal of making accurate and timely budget figures available to taxpayers, the objectors’ construction of the statute could actually produce the opposite result: their interpretation would require school districts to formulate
Finally, amici school districts note, in their joint brief before this court, that the State Board of Education, responsible for carrying out a number of functions and duties under the School Code, has never interpreted the provision at issue in the manner suggested by the objectors. Deference is ordinarily paid to interpretations of ambiguous statutory language by administrative agencies charged with their administration. Santiago v. Kusper, 133 Ill. 2d 318, 328 (1990); Airey v. Department of Revenue, 116 Ill. 2d 528, 536 (1987).
People ex rel. Stanfield v. Pennsylvania R.R. Co., 3 Ill. 2d 524 (1954), cited by the objectors, is not to the contrary. That case involved the 1952 levy for a school district in Edgar County. The district operated on a fiscal year that began on July 1. The district adopted its budget for fiscal year 1952-53 on August 26, 1952, and at the same time adopted a levy. The objector contended that the levy was excessive, because the sum of the levy and the amount of nontax revenue the district anticipated receiving exceeded the amount of the budget. The court noted that because the levy adopted in 1951 did not produce sufficient sums for fiscal year 1952-53, the district had issued $50,000 in tax anticipation warrants against the 1952 levy.
The Stanfield court held that the district could impose a levy that would produce more revenue than the current budget required. The court began its analysis by considering whether the existence of a budget was a condition precedent to a valid tax levy, and concluded that a budget was not a condition precedent. The court distinguished school districts from other taxing bodies that are required to have an appropriation ordinance in force before levying taxes. The court explained:
“As regards school districts, however, this court has said that in only one instance is it necessary that the budget and appropriation ordinance be in force at the time of making the levy, namely, when the beginning of the fiscal year is subsequent to the time of the tax levy for that year. [Citations.] Since the fiscal year of the district herein considered began on July 1, 1952, and the levy was not made until later, August 26, 1952, it was not necessary that the budget be in force at the time of making the levy.” Stanfield, 3 Ill. 2d at 526.
The objectors interpret Stanfield as enunciating the principle that a school district operating on a cash basis must always formulate its budget for a fiscal year before it makes a levy whose proceeds will be used during that fiscal year. We disagree. The court in Stanfield did not use the term “cash basis” in explaining its result or in setting out the exception quoted above, and the decision did not purport to formulate a rule applicable to cash-basis districts. The court merely recited the exception found in section 17-1.
For the reasons expressed above, we believe that the collector‘s interpretation of the challenged provision of section 17-1 better effectuates the underlying purposes of the legislation. The objectors would derive from the disputed provision a rule applicable to cash-basis districts, yet section 17-1 does not distinguish between cash-basis and deficit-basis districts for budget-making purposes. We believe that the legislature, if it had intended to impose the special requirement urged by the objectors, would have done so explicitly. Moreover, the collector‘s interpretation of the provision does not render the challenged provision meaningless, as the objectors contend it does. The provision would apply to a financially distressed school district that has borrowed against its current tax revenue and finds it necessary to adopt, prior to the start of the next fiscal year, the levy that it would normally adopt during the next fiscal year. In that way, the district could issue tax anticipation warrants against the new
As a final matter, the objectors note that the legislature did not continue a saving clause found in the statutory predecessor to section 17-1, when the original provision was removed from the Municipal Budget Law and placed in the School Code. As the collector has observed, however, the legislature, in enacting section 17—1 without a saving clause, could have simply concluded that there was no need to include a provision like that, in light of the ordinary absence of any linkage between a school district‘s budget and its levy.
For the reasons stated, the judgment of the appellate court is affirmed.
Judgment affirmed.
JUSTICE RATHJE took no part in the consideration or decision of this case.
JUSTICE HEIPLE, dissenting:
In today‘s opinion, a majority of this court concludes that Itasca School District No. 10 did not violate section 17-1 of the School Code (
The facts of this case are not in dispute. The Itasca school district operates on a fiscal year that runs from July 1 through June 30. The district adopted a tax levy on December 15, 1993. At the time it made this levy, the district had cash and assets on hand to meet its estimated expenditures through June 30, 1994, and it reasonably
Several taxpayers filed objections to their 1993 real estate taxes, arguing that the district‘s December 15, 1993, tax levy was invalid because it was adopted in violation of section 17-1 of the School Code (
“If the beginning of the fiscal year of a district is subsequent to the time that the tax levy for such fiscal year shall be made, then such annual budget shall be adopted prior to the time such tax levy shall be made.”
105 ILCS 5/17-1 (West 1996).
As the majority correctly points out, the controversy in the present case centers on the meaning of the phrase “for such fiscal year” in section 17-1. More precisely, the relevant question is: “What year is a tax levy ‘for?‘” The taxpayers insist that, within the meaning of the statute, a tax levy is “for” the fiscal year in which the proceeds of that levy will be used. In contrast, the Du Page County collector argues that a tax levy may also be considered “for” the fiscal year in which it is made.
After examining various dictionary definitions of the word “for,” the majority concludes that both the taxpayers’ and the collector‘s interpretations of the statute are reasonable, and that the statute is ambiguous. Accordingly, the majority undertakes to determine which of the competing interpretations of the statute “is more consistent with the goals of the legislation.” 187 Ill. 2d at 332. Finding that the taxpayers’ interpretation of the statute would cause practical difficulties and administrative hassles for school districts, the majority adopts the collector‘s interpretation and holds that a tax levy should be considered “for” the fiscal year in which it is made.
The majority‘s error is rooted in its uncritical accep-
“Where an enactment is clear and unambiguous, the court is not free to depart from the plain language and meaning of the statute by reading into it exceptions, limitations, or conditions that the legislature did not express [citations], nor is it necessary for the court to search for any subtle or not readily apparent intention of the legislature.” People v. Woodard, 175 Ill. 2d 435, 443 (1997).
By its plain terms, section 17-1 applies only “[i]f the beginning of the fiscal year of a district is subsequent to the time that the tax levy for such fiscal year shall be made.”
The majority‘s answer to this paradox is unconvincing. According to the majority, section 17-1 would still apply to a financially distressed school district that found it necessary to adopt a tax levy prior to the start of the next fiscal year in order to issue tax anticipation warrants against that levy. In conducting this analysis, however, the majority seems to assume that such a levy would be “for” the upcoming fiscal year. If that is true, then it can only be because the levy is not actually “for” the fiscal year in which it is made, but rather is “for” the fiscal year in which the proceeds therefrom will be used. However, this is precisely the opposite of the majority‘s holding.
JUSTICE HARRISON joins in this dissent.