204 So. 2d 197 | Fla. | 1967
Lead Opinion
(retired).
This case is here on an appeal direct to this Court from an order of the Circuit Court granting defendants’ motion to dismiss a complaint by taxpayers, for injunc-tive relief, and dissolving a temporary injunction. The Court is called upon to decide the constitutionality of the procedure adopted by defendants, as the taxing authority of a public school district, in assessing district school taxes for the fiscal year beginning July 1, 1967, and ending June 30, 1968.
The Attorney General, with the Court’s consent, has filed a brief as Amicus Curiae and argues that the lower court’s ruling should be upheld.
Plaintiffs, Appellants here, claim to be taxpayers within the school district, comprised of Bay County. They contend that the procedure in question violates Section 10, Article XII, of the Florida Constitution, F.S.A., which reads:
“The Legislature may provide for the division of any county or counties into convenient school districts; and for the election biennially of three school trustees, who shall hold their office for two years, and who shall have the supervision of all the schools within the district; and for the levying and collection of a district school tax, for the exclusive use of public free schools within the district, whenever a majority of the qualified electors thereof that pay a tax on real, or personal property shall vote in favor of such levy; Provided, that any tax authorized by this section shall not exceed ten mills on the dollar in any one year on the taxable property of the district.”
The following facts are disclosed by the complaint, as amended, and the exhibits appended thereto:
On August 5, 1965, the County Superintendent of Public Instruction certified to the State Superintendent of Public Instruction for approval the annual school budget for the fiscal year beginning July 1, 1965, and ending June 30, 1966. The assessed value of non-exempt property within the district was represented to be $61,000,000, the valuation to be used in computing a tax
On October 7, 1965, the budget received the approval of the State Superintendent of Public Instruction.
On October 20, 1965, the Board of Public Instruction recommended approval by the taxpayers within the district of a levy of 10 mills as necessary to raise sufficient tax to meet budget needs for the 1966-1967 biennium.
On November 3, 1965, the election was held and the proposed millage rate was approved.
On August 1, 1966, the County Superintendent of Public Instruction certified to the State Superintendent of Public Instruction for approval the annual School Budget for the fiscal year beginning July 1, 1966, and ending June 30,1967. The certificate recited an assessed value of non-exempt property in the amount of the 1966 assessment roll, to-wit, $65,585,000.
On October 25, 1966, the budget received the approval of the State Superintendent of Public Instruction.
It is alleged that the millage rate which was applied to the 1966 assessment roll produced a school district tax of $579,000.
Controversy arose, according to the complaint, as amended, during the year 1967, when school taxing authorities proceeded to certify a budget for the fiscal year beginning July 1, 1967 and ending June 30, 1968, and, without an approving vote of the taxpayers, proposed a millage rate of 3 mills to be applied to the 1967 tax roll now increased to $320,000,000. This, it is alleged, would produce a school district tax of $912,000.
This procedure, it is asserted by the plaintiffs, imposes upon the taxpayer a much greater tax burden than was contemplated
It is alleged in the complaint, as amended, and now undisputed: “That such tax (the 1965-tax roll amounting to $61,000,000) was prepared in violation of law and did not contain assessments of property of Bay County at its fair market value and was therefore an invalid tax roll as was the tax roll of 1966; that a systematic undervaluation of property had been the custom in Bay County and in the other counties of the state for many years and this custom was well known to the defendants. The millage recommended and approved at the election of 1965 was much higher than the millage which would have been required to produce the specified income on a tax roll containing the just value of the nonexempt taxable district property; that the district taxpayers were misled in voting millage far in excess of that which would have produced the income specified in the budget as being required for the district on a valid assessment roll and therefore the election was invalid and of no force and effect; and does not constitute a consent on the part of the taxpayers to be taxed and no district millage should be levied.”
Defendants, by motion to dismiss addressed to the complaint, as amended, take the position that the procedure described by plaintiffs is justified by the provisions of Statute 193.03, in force during the year 1965, Statute 193.032, which took effect January 1, 1966, and Statute 236.33. These statutes authorize the taxing authorities to “roll back” the millage approved by the voters to produce revenue necessary to meet the requirements of the public school districts. It is provided by Statute 193.032 that: “Nothing contained in § 193.03 as amended and 193.031 (new section) by chapter 65-258 shall require the reduction of millage authorized to be levied pursuant to the provisions of section 10, article XII of the Constitution of Florida.”
In granting defendants’ motion to dismiss, and dissolving a temporary injunction issued previously, the lower court ruled that “the approval of the millage of 10 mills in the 1965 district election by a majority of the district tax-payers empowered the County Board of Public Instruction to levy any amount up to 10 mills, irrespective of the amount of the tax rolls of 1965, 1966 and 1967.”
Plaintiffs argue that at the time of the 1965 election the taxing authorities, by their long course of conduct in assessing property at less than full value, lulled them into the belief that their tax burden would be one thing, whereas the increase of the 1967 assessment roll to full value resulted in another; that they were thus deceived and the avowed purpose of Section 10, Art. XII, of the Florida Constitution to give them a voice in the tax burden they were to bear was nullified.
Similar circumstances were before the District Court of Appeal, Second District, in Board of Public Instruction of Hendry County v. State ex rel. Hilliard, Fla.App. 1966, 188 So.2d 337. It was decided in that case that the procedure was improper. The Court said:
“On the 1964 tax roll the maximum of 20 mills was applied. Without any consent of the taxpayer and by merely tripling the tax roll for 1965 the School Board would receive three times the maximum amount of monies allowed by the constitution. Under § 193.03(6) the Tax Assessor of Hendry County certified to the School Board a tax reduction ratio of 2.93. Applying this ratio to the 20 mills would result in a millage of 6.85 when carried to the nearest two-decimal figure. By increasing this figure to 8.5 mills under the guise of §§ 237.05 et seq., it can*201 easily be seen that the constitutional maximum has in effect been exceeded. It is this very injustice which § 193.03 is intended to prevent.”
The opinion in that case was made the opinion of this Court in Board of Public Instruction of Hendry County v. State ex rel. Hilliard, Fla.1966, 191 So.2d 561.
In deciding questions relating to procedure employed by a governmental taxing agency one must bear in mind at the outset that laws providing for taxation must be construed most strongly against the government and liberally in favor of the taxpayer. 30 Fla.Jur., Taxation, Sec. 52; City of Miami v. Schonfeld, Fla.App.1961, 132 So.2d 767; State of Florida et al v. City of Boca Raton, Fla.1965, 172 So.2d 230.
Likewise, where construction is in order, constitutional provisions, as well as statutory enactments, are to be interpreted so as to accomplish rather than defeat their purpose. 6 Fla.Jur., Constitutional Law, Sec. 14; Owens, Tax Assessor, et al v. Fosdick, (1943) 153 Fla. 17, 13 So.2d 700.
Undoubtedly, Sec. 10, Art. XII, of the Florida Constitution has for its purpose the giving to the taxpayer of a voice in the amount of tax he shall pay for public school purposes. If such a purpose be eliminated or cast aside the constitutional provision in question becomes meaningless and calls for an idle gesture on the part of the voter.
The taxpayer can have a voice in the tax he is to pay only ff he has a firm indication in the first place of what valuation the millage he approves is to be applied. The procedure described in the complaint, as amended, whereby property was assessed according to a systematic plan adopted by the taxing authorities to value property at less than its full value at the time the taxpayer was requested to vote, and according to a different plan followed at a later time, the result of which is to substantially increase his tax burden, without approval by the taxpayer, is deceptive and nullifies the purpose of the constitutional provision in question. Statutory enactment, or procedure by the taxing authorities under the guise of statutory law, which brings about such a result is illegal and cannot stand in the face of the clear purpose of the Constitution.
Defendants argue that the taxpayer was not misled or deceived and should not be heard to complain because: “Every owner of property is presumed to know the market value of his property.” Such an argument might prove ■ sound if at the time of the election the taxing authorities had followed the plan of assessing property at full value. But such was not the case according to the undisputed allegations of the complaint, as amended. Here, the fact is that the taxing authorities assessed property at less than full value arrived at by their own uncontrolled and arbitrary estimate. It will be remembered that in arriving at the amount of millage to be submitted to the taxpayer in the 1965 election the School Board relied upon the 1965 assessment roll. In voting upon the millage thus computed, the taxpayer had a right to do likewise.
The purpose of the “roll-back” statutes (St. 193.03 and St. 193.032) was to “prevent an injustice to the taxpayer when a general re-evaluation of property is made within a county and the tax roll is thereby increased.” Board of Public Instruction of Hendry County v. State ex rel. Hilliard, supra. Rolling back the millage, but at the same time increasing the assessment roll with the result that the taxpayer’s burden is substantially increased does not bring about such a result. On the contrary, the result is quite the opposite. Instead of the statutes being applied as a shield of protection, they are being used as a sword to nullify their very purpose.
Under Sec. 10, Art. XII, the School Board must go to the taxpayers every two years to find out how much may be levied in the next two years for public school purposes. However, this does not mean necessarily that when the circumstances demand it, a millage so approved may not be aban
At this stage of the proceedings the allegations of the complaint, as amended, which are well pled must be taken as true. When the principles to which reference has been made are applied to the facts, thus admitted, the conclusion is that the complaint, as amended, states a cause of action and should not have been dismissed nor the temporary injunction dissolved.
It will be noted that in Board of Public Instruction of Hendry County v. State ex rel. Hilliard, supra, relief was denied the taxpayer because of the overriding public good. In the case now before the Court, neither defendants’ motion to dismiss, the lower court’s order granting the motion to dismiss, cross-assignment of error, appellees’ brief, nor the brief of the Amicus Curiae, mentions the point. Hence, its consideration here seems inappropriate.
In the event it becomes necessary for the fixing of an equitable levy by the chancellor more responsive to the will of the people as expressed in the 1965 millage election, such levy should not be one that would result in a substantially greater tax on the involved parcel than would have resulted had the assessment on such parcel remained unchanged.
Reversed.
. The millage necessary to raise budget needs for the fiscal year beginning July 1, 1965, and ending June 30, 1966, would be applied to the 1965 assessment roll. This roll would be in the hands of the Board of Equalization by the first Monday in July, 1965. It is alleged in the complaint that the 1965 roll was, in fact, $61,000,000 and that the millage rate used actually resulted in a school district tax of $579,000. Hence, it is seen that the Board of Public Instruction relied upon the 1965 assessment roll in reciting in the certificate a proposed assessment of $61,000,000. This is important in view of the allegation made by plaintiffs, and now undisputed, that for many years property had been systematically undervalued.
. Neither the budgets nor the assessment rolls for 1966-1967 biennium could then be known. At that time the taxing authorities, in recommending to the taxpayers a millage rate necessary to meet budget needs for those years, had only the 1965 budget and assessment roll upon which to rely. Likewise, the taxpayers could be expected to rely upon the same data in making a choice of millage. Allegations, which are undisputed at this point, to this effect are found in paragraph 8 of the complaint, and in paragraph B of the Amendment to Complaint.
. In the ordinary course of events this millage, or a sum sufficient to raise budget needs, not exceeding the total millage approved at the election, would be applied to the tax roll for the year 1966 and the tax so determined would be due and payable by the taxpayer November 1, 1966. Actually the tax assessment of non-exempt property for 1966 amounted to $65,585,000, but it is alleged that the change “did not increase the taxes of the individual district taxpayers as the increase in the roll in 1966, which gave the district greater funds, resulted from taxes on properties which were not assessed in 1965.”
. The reasons behind such an increase in the 1967 assessment roll are well known. The practice which had been followed throughout the State of Florida for many years in assessing property for taxation at less than its actual value was disapproved by this Court and tax assessors were ordered to assess property at full value. See Walter v. Shuler, Fla.1965, 176 So.2d 81. The increase resulted.
. In the ordinary course of events the 3 mills would be applied to the tax roll during the year 1967 and the resulting tax would be due and payable by the taxpayer November 1, 1967.
Dissenting Opinion
(dissenting):
I do not believe the decree of the Circuit Court of Bay County should be disturbed.
The basis for equitable relief sought by Appellants appears to be as follows:
1. That when they and other qualified electors voted for 10 mills in the biennial school district election of Bay County on November 3, 1965 pursuant to Section 10, Article XII, State Constitution, as implemented by F.S. Sections 236.31, 236.32 and 236.33, F.S.A., to apply during the succeeding two county school fiscal years (July 1, 1966 to June 30, 1967 and July 1, 1967 to June 30, 1968), the 1965 assessed valuation of taxable property in the district, due to systematic undervaluation by the County Tax Assessor, was $61,000,000.
2. That at the time of said 1965 election the existing budget for the school district for the fiscal year 1965-1966 approved by the Bay County School Board was $579,000. This budget had reference to the millage voted in the preceding school district biennial millage election held in November, 1963.
3. That in 1966, pursuant to the provisions of Ch. 237, F.S., a district budget in the amount of $590,803 was approved by the county school board for 1966-1967. That the 10 mills voted in 1965 was expected to produce the revenue needed for said budget based upon the assessed valuation of the taxable property of the district for 1966 in the amount of $65,586,000. This budget and assessed valuation were unknown to the district electors when they voted in 1965.
4. That a budget to provide for the district current school fund for the year 1967-1968 was adopted by the local school board in 1967 in the amount of $912,000 to be raised from a 3-mill levy upon the assessed valuation of the taxable property of the district for the year 1967 in the amount of approximately $320,000,000. The latter amount is now the assessed value of the taxable property of the district because beginning in 1967 such property is no longer systematically undervalued, but is assessed at just, or full value in the range of one hundred per cent. The 10 mills were reduced to 3 mills pursuant to the local board’s authority to do so under F.S. Section 236.-
5. That Appellants do not contend the budget of $912,000 is not needed for the district current school fund; instead, they contend that when the qualified electors owning taxable property in the district voted for 10 mills in the millage election of 1965 they believed the school district budgets for the next two fiscal years would closely approximate the budget for 1965-1966 because they did not anticipate the systematically undervalued taxable property of the district would be raised in valuation from less than 50% of its fair market value to approximately 100%, and consequently the 10 mills they voted on their undervalued taxable property would produce approximately the same budget amounts during the fiscal years of the biennium as was realized in the fiscal year 1965-1966. Under this alleged expectation their taxes, of course, would not be raised nearly enough to produce anything like the $912,000 estimated for the current budget. Their alleged expectation was realized in the next succeeding budget for the fiscal year 1966-1967, but in the fiscal year 1967-1968, valuation of the taxable property in the district had been increased in the range of 100% fair market value. This increase in valuation materially increased the amount of tax revenue a mill would produce. Therefore, Appellants, on the basis of equity, contend in their complaint to enjoin the school board that the board should not be permitted to budget $912,000 for the district nor levy 3 mills to produce it, because such official action was not contemplated by the electors when they voted in 1965 due to the undervaluation of district taxable property at that time. They point out $912,000 is more than one third greater than either of the two preceding budgets.
The Circuit Court disagreed with Appellants and denied them an injunction. We have jurisdiction of this appeal because an initial construction of controlling provision of the State Constitution is involved.
I find no justification for equitable relief for the following reasons:
A. The budget of a school district, i. e., a county, is not a static determination but varies from school year to school year. The Bay County district electors had no sound reason to believe whep they voted in 1965 that from the standpoint of school needs the district budget would necessarily remain in the range of the 1965-1966 budget of $579,000 during the succeeding two fiscal years but, rather, in a county growing as fast as Bay the school needs by 1968 in all likelihood would greatly increase. The record fully demonstrates that Bay County requires this district budget amount of $912,000. Along with most of the fast-growing counties of the state, Bay County is experiencing a grave financial crisis in its public school system.
B. Under the present emergency conditions it appears incongruous that equity would purport to enjoin a duly determined ad valorem tax levied to meet the district current school needs of Bay County seasonably budgeted in the amount of $912,000 and thereby override the wisdom and discretion exercised by the elected school officials of the county which have been duly examined and approved by the Circuit Judge of the County. We should not substitute our judgment for that of the school budget-making authority of Bay County by holding that $912,000 is not what the local taxpayers gave their consent could be provided for district school needs from local taxation. The question immediately arises if $912,000 was not authorized by the electors, what figure was authorized? Was it the $579,000 budget figure of 1965-1966 or some small percentage over such figure based on our guess as to what exactly the district electors had in mind to allow — or can we leave the school board in a dilemma as to what, if any, amount may be raised —or can we say that because the taxable property of the district was systematically undervalued in 1965 but was legally valued in 1967 the district taxpayers should not
C. When the district electors voted in 1965 they had little reason to assume that the existing illegal systematic undervaluation of taxable property could long continue in Bay County. It was widely known at the time of the election that this Court had recently decided a number of cases holding that taxable property should be taxed at just or full cash value. Although this view had been first indicated in 1919 in Camp Phosphate Company v. Allen, 77 Fla. 341, 81 So. 503, and followed in Cosen Investment Co. v. Overstreet, 154 Fla. 416, 17 So.2d 788, great emphasis upon the precedent that just or full value is constitutionally required was evinced in the following recent cases: State ex rel. Glynn v. McNayr (Fla.1961), 133 So.2d 312; McNayr v. State ex rel. DuPont Plaza (Fla.), 166 So.2d 142, text 144, 145, decided July 10, 1964, and Walter v. Schuler (Fla.), 176 So. 2d 81, decided June 28, 1965. “Fair market value” and “just valuation” were declared to be “synonymous” in Walter v. Schuler, supra. These cases arose largely because of financial crises in the school systems of certain counties and the need for broader based local taxation school support. When the tax millage was voted in 1965 the litigation and the decision in Walter v. Schuler, supra, had been given wide publicity and the decision was being widely implemented. It came as no surprise to Appellants when tax valuations were increased from below fifty per cent of fair market value to fair market value.
D. I find nothing in Section 10, Article XXI, or the statutes implementing it, which connects the millage voted in 1965 to the tax roll or assessment of 1965, as Appellants contend. The Appellants would pin the school authorities down in fixing the 1967-1968 district budget to the 1965 tax roll on the novel assumption that insofar as their future district taxes are involved their vote on the millage irrevocably restricted the school authorities very closely to the status quo of the 1965 illegal assessment which existed at the time of the election. Current district school taxes are not tied to tax valuations of prior tax years, nor to district school budgets of the years in which millages are voted. Current district taxes within the millage limit voted connect only with the current budget and current assessed valuation of the year in which such taxes are levied.
Section 10, Article XII, State Constitution, provides a means and method by which taxpayers in school districts may place a limitation upon millages that may be imposed upon their property for school district purposes. Such taxpayers vote only upon a millage limitation, not upon a static sum of money geared down to a budget of a former fiscal year or down to a former assessment valuation — and this is so because the Constitution refers to millages and not to a particular budget sum or assessed valuation. It is provided in said Section 10 “that any tax authorized by this section shall not exceed ten mills on the dollar in any one year on the taxable property of the district.” (Emphasis added.) Despite this language, the majority opinion would retroact the district school tax to the year 1965 and the tax valuation of property and the district budget of that year rather than prospectively to the tax valuations and school district budget of “any one year” in the future.
E.I fail to see how the principle of equity which presumably follows the law can be seized upon to roll back the Bay County district current school taxes for the fiscal year 1967-1968. Reliance upon Board of Public Instruction of Hendry County v. State ex rel. Hilliard (Fla.App.), 188 So.2d 337, decided on January 28, 1966 and affirmed by us in 191 So.2d 561, appears mis-founded. Section 8, Chapter 63-250, Acts of 1963, was brought into the Florida Statutes as Section 193.03. The rollback provisions of this 1963 statute were applied to millages voted in 1963 under Section 10, Article XII, State Constitution, on the Hen-dry County tax roll of 1965 in Board of
F.I also fail to see how the taxpayers of the Bay County School District can be placed in a specially privileged class and relieved by equity in whole or in part of the district taxes which were levied in 1967. I do not see that they are faced with any more hardships than were the taxpayers involved in McNayr v. State ex rel. DuPont Plaza, supra, wherein this Court held that county taxing authorities did not have discretion to carry taxable property on the tax rolls at fifty per cent of fair market value; but instead were mandatorily required there and then to double the value of such property. Countless thousands of taxpayers in our state were required to go from one year to the next from the old illegal undervalued assessments to the one hundred per cent or just value assessment without our interposing to give them equitable relief in the transition (see my concurring opinion in McNayr v. State ex rel. DuPont Plaza, supra). When our decisions corrected the illegality of undervaluation in ad valorem assessments, it was assumed the correction applied to all tax assessments and would not be held to “freeze” district school levies to illegal undervalued assessments of 1965.
G. Equity is supposed to follow the law, but here the whole thrust of Appellants’ complaint is that they should be continued the privilege of following an illegal assessment despite the Constitution, state laws and our Court decisions to the contrary.
H. It seems incongruous and unfitting that we should depart in this instance from the one hundred per cent fair market value assessment principle on the flimsy predicate here advanced; having held resolutely to that principle up to now. I think it is for the Legislature and not the Court to innovate in this area of taxation. It is recognized that the constitutional provision and laws relating to school district millage elections are archaic and confusing and tend to breed taxpayer irresponsibility. In all probability they will be repealed or modified in the near future by the Legislature and the people. In the meantime, the needs of the schools should not be made to suffer on the basis proposed here, i. e., that the millages duly voted for the schools should not be fully implemented because these Appellant-electors claim they thought their choice of millage only connected to the status quo ante, that is, within close range to the prior budget and assessed valuation and not to future school needs and not to future corrected or full cash value assessments.
It seems to me that if we grant this unusual type of relief to the Bay County district, taxpayers in many other county districts can with equal merit claim the right to reduction or elimination of their district taxes based on situations existing at the time of the 1965 biennial district millage election. This would further inject turmoil in the public school finances.
To recapitulate: I am greatly concerned that we are proceeding on some basis of equity to intervene in the legislative field and roll back district millages which the Legislature has specially said are not required to be reduced because of the transition to full value assessment.
The 10 mills were voted without the electors knowing at what value the Tax Assessor would assess the property of .the district in future years. However, they had strong indications at the time of the election that .the Tax Assessor would be compelled to assess the district taxable property at full value, which in fact he had to do in 1967.
It is very strange equity here aids those who have benefitted by illegality of assessment and especially so after the illegality of assessment has been replaced by legal assessment.
THOMAS and THORNAL, JJ., concur.