Case Title: Hamer v. Kirk

Citation: 357 N.E.2d 506, 65 Ill. 2d 211

Docket Number: 

State: illinois

Court: Illinois Supreme Court

Date: 1976-11-15T00:00:00Z

Document:
65 Ill. 2d 211 (1976)
357 N.E.2d 506
PAUL E. HAMER et al., Appellants,
v.
FRANK A. KIRK, Director of the Department of Local Government Affairs, et al., Appellees.
No. 48482.

Supreme Court of Illinois.
Opinion filed November 15, 1976.
*212 *213 Paul E. Hamer, of Northbrook, for appellants.
William J. Scott, Attorney General, of Chicago (Robert G. Epsteen and Paul J. Bargiel, Assistant Attorneys General, of counsel), for appellees.
Judgment affirmed.
MR. JUSTICE UNDERWOOD delivered the opinion of the court:
Plaintiffs Paul and June Hamer brought this action in the circuit court of Lake County as taxpayers against the Director of the Department of Local Government Affairs (hereafter Department) praying that the court declare unconstitutional section 146 of the Revenue Act of 1939 (Ill. Rev. Stat. 1975, ch. 120, par. 627) as amended by Public Act 79-703 (Laws of 1975, at 2192), and enjoin the Department from issuing regulations based on that section. The trial court held the statute constitutional and denied injunctive relief. Plaintiffs filed an interlocutory appeal pursuant to Rule 307(a)(1) (58 Ill.2d R. 307(a)(1)), and we allowed their motion to transfer the appeal here pursuant to Rule 302(b) (58 Ill.2d R. 302(b)).
*214 This is another in the series of cases in which plaintiffs have sought to compel State and local officials to assess and equalize property for taxing purposes in the manner prescribed by law. (See Hamer v. Lehnhausen (1975), 60 Ill. 2d 400; Hamer v. Mahin (1970), 47 Ill. 2d 252; People ex rel. Hamer v. Jones (1968), 39 Ill. 2d 360.) In Hamer v. Lehnhausen (1975), 60 Ill. 2d 400, 401-03, we described in detail the system of taxing property that existed prior to the amendment challenged here:
With the enactment of Public Act 79-703, real and personal property are now to be assessed at 33 1/3%, rather than 50%, of actual value "as determined by the Department's assessment to sales ratio studies for the 3 most recent years preceding the assessment year, adjusted to take into account any changes in assessment levels implemented since the data for such studies were collected." (Ill. Rev. Stat. 1975, ch. 120, par. 482(24).) Plaintiffs do not argue that the General Assembly may not *216 require the assessment of property at 33 1/3% of actual value. They do argue, however, that the method the General Assembly has provided to reach uniformity at 33 1/3% is unconstitutional. That method is established in section 146 of the Revenue Act of 1939:
Although the Department argues that plaintiffs lack standing to challenge the statute, we disagree. We note the question of standing was not raised or decided in the trial court in this specific phase of the ongoing litigation and should not ordinarily be considered for the first time here. (People ex rel. Wilcox v. Equity Funding Life Insurance Co. (1975), 61 Ill. 2d 303, 313.) We are satisfied, however, that plaintiffs are sufficiently aggrieved by the statute to have standing under the requirements of our past cases. (E.g., Edelen v. Hogsett (1969), 44 Ill. 2d 215, 219-20; Schreiber v. County Board of School Trustees (1964), 31 Ill. 2d 121, 125.) One harmful effect of nonuniform assessment of property results from the use of equalized assessed valuation in determining the eligibility of a local governmental unit to receive some types of State aid. (E.g., Ill. Rev. Stat. 1975, ch. 122, par. 18-8 (School Code); ch. 23, par. 12-21.13 (Public Aid Code).) We recently made the following observation regarding State aid to schools, for example:
Plaintiffs allege without refutation that 41 counties in the State have lower assessment ratios than Lake County. As to residents of those counties, plaintiffs are aggrieved because they must pay proportionately more in local taxes to qualify for State assistance.
Plaintiffs first contend section 146, as amended, is unconstitutionally vague. Although we agree section 146 is scarcely a model of statutory draftsmanship, its intent and operation are discernible. Based on the assessment to sales ratio studies for the three most recent years preceding the assessment year, as required by section 1(24) (Ill. Rev. Stat. 1975, ch. 120, par. 482(24)), the Department is directed to ascertain for each county the amount by which the aggregate assessment must be increased or reduced so that aggregate assessed value is one third of actual value. Before multipliers that would accomplish this result are computed, however, the Department must make two additional determinations. Under proviso (1) of section 146, the Department may not, until the assessment year 1977, reduce the aggregate equalized assessment in a *219 county below its 1974 level, even though those values in some counties will thereby remain temporarily above the required 33 1/3% level. Under proviso (2), for counties in which the aggregate equalized assessed value was less than one third of actual value for the single assessment year 1973, a three-year transition period is established in which the Department must increase that ratio to 33 1/3% eliminating in three equal, annual steps the percentage difference between 33 1/3% and the ratio of equalized assessed valuation existing in 1973.
The more troublesome question is not what the statute provides but whether it may do so constitutionally. Without doubt the legislative scheme postpones the arrival of intercounty uniformity of assessment for taxing purposes until the assessment year 1977. And this court has been more than tolerant, considering the deliberate refusal of State and local officials to comply with the law, in recognizing that a sudden change in assessment policy could lead to chaotic conditions in tax collection procedures. The legislation under attack here appears designed to eliminate a part of the problems noted in our earlier opinions, and to promote compliance with article IX, section 4, of the Constitution with as little local disruption as possible. Viewed in this light, the three-year transition period established by Public Act 79-703 is not, in our judgment, so patently unreasonable that it must be struck down.
Plaintiffs raise an additional argument concerning the manner in which the Department conducts its assessment to sales ratio studies to determine whether counties are in compliance with the 33 1/3% requirement. The Constitution permits the classification of real property for purposes of taxation only in counties with a population of more than 200,000. (Ill. Const. 1970, art. IX, sec. 4(b).) In collecting data on real estate transfers, however, the Department divides the sales into urban and rural categories. Median assessment ratios are determined for each *220 category, usually disclosing that rural property, on the average, is assessed at a substantially lesser percentage of actual value than urban property. Information in each category is later combined to produce a single assessment ratio for the county. To attain the statutory level of 33 1/3%, the Department then imposes a single equalization rate (multiplier) for the county. The result in many counties is that recognized disparities between urban and rural assessment ratios are continued, and, where the multiplier increases the dollar valuation, amounts of those disparities, in terms of dollars, are magnified.
Urban property owners under this set of facts bear a constitutionally impermissible proportion of the burden of real estate taxes in those counties which do not classify property for purposes of taxation. (Ill. Const. 1970, art. IX, secs. 4(a), (b).) This violation of constitutionally required uniformity, however, originates with the local assessing authorities; it does not arise from the equalization procedures required by this amendment. Consequently, the validity of the legislation and procedures here challenged are not affected.
The problem of disparate urban-rural property assessment ratios, of course, should not exist. Local assessing authorities should assess at one third of actual value (Ill. Rev. Stat. 1975, ch. 120, par. 488); boards of review are directed by statute to correct improper assessments of property (Ill. Rev. Stat. 1975, ch. 120, pars. 589(4), (5)), and equalize property assessments within each county (Ill. Rev. Stat. 1975, ch. 120, par. 589.1); and the Department may order the reassessment in any county or assessment district of any property that has not been assessed in substantial compliance with law (Ill. Rev. Stat. 1975, ch. 120, pars. 612(6), 621).
The judgment of the circuit court of Lake County is affirmed.
Judgment affirmed.