Title: City of Joliet v. Bosworth

State: illinois

Issuer: Illinois Supreme Court

Document:

64 Ill. 2d 516 (1976)
356 N.E.2d 543
THE CITY OF JOLIET, Appellee,
v.
KENT BOSWORTH, County Treasurer, Appellant.  THE VILLAGE OF BARTONVILLE et al., Appellees,
v.
EDWARD T. O'CONNOR, County Treasurer, Appellant.
No. 47976, 48078 cons.

Supreme Court of Illinois.
Opinion filed October 1, 1976.
Rehearing denied November 12, 1976.
*517 *518 Martin Rudman, State's Attorney, of Joliet (Nicholas E. Sakellariou, Assistant State's Attorney, of counsel), for appellant.
Raymond A. Feeley, Corporation Counsel, of Joliet, for appellee.
Frank M. Pfeifer and Thomas W. Kelty, of Springfield, for amicus curiae Illinois Municipal League.
Michael M. Mihm, State's Attorney, of Peoria (Lyle W. Allen, Special Assistant State's Attorney, and Michael M. Mihm and Lyle W. Allen, of counsel), for appellant.
David J. Walvoord and Thomas E. Leiter, both of Peoria (Kavanagh, Scully, Sudow, White & Frederick, and Leiter, Newlin, Fraser, Parkhurst & McCord, of counsel), for appellees.
Paul E. Hamer, of Northbrook, for amicus curiae Wheeling Trust and Savings Bank.
Judgments affirmed.
MR. JUSTICE UNDERWOOD delivered the opinion of the court:
These consolidated appeals involve the question of the constitutionality of section 21a of "An Act concerning fees and salaries, and to classify the several counties of this state with reference thereto" which provides that counties may bill each taxing district within the county for its proportionate share of the actual costs incurred by the county in extending and collecting taxes on behalf of all taxing districts. (Ill. Rev. Stat., 1974 Supp., ch. 53, par. 39a.) Suits for declaratory judgment challenging the validity of the statute were instituted in the circuit courts of Will and Peoria counties by certain taxing districts within those counties against the respective county treasurer *519 in his capacity as ex officio county collector. In each case, judgment was entered by the trial court holding the statute to be in violation of section 9(a) of article VII of the 1970 Constitution of Illinois. Direct appeals to this court have been taken by the defendant county treasurers pursuant to Supreme Court Rule 302(a).
The statute in question, which became effective October 1, 1974, provides:
Pursuant to the foregoing statute, the Will County Board adopted the following resolution on May 21, 1975:
In accordance with the resolution, the treasurer of Will County billed the City of Joliet for $37,031.96 and the City of Joliet Road and Bridge District for $1,516.43 as each taxing district's proportionate share of the cost to Will County of the extension and collection of taxes in 1974.
Cause No. 47976 originated with the filing of a complaint for declaratory judgment and other relief by the City of Joliet against Kent Bosworth, treasurer of Will County, alleging inter alia that the statute and the ordinance enacted pursuant thereto violated section 9(a) of article VII of the 1970 Constitution of Illinois, which provides:
It was alleged that the county was attempting to collect "the office expenses of a unit of local government" as well as a fee "based upon funds disbursed or collected" and upon the "levy or extension of taxes" contrary to the provisions of section 9(a). The complaint further alleged that citizens of the City of Joliet had been denied equal protection of the law and that implementation of the statute and the resolution violated the due process clauses of the Federal and State constitutions. At the conclusion of a hearing, the trial court entered an order declaring the statute and resolution invalid under the State and Federal constitutions, enjoining the defendant county treasurer *521 from collecting any charges or bills for the costs of collecting taxes pursuant to the statute and resolution, and directing that the defendant return to various taxing bodies all monies which had already been collected for such purposes.
Cause No. 48078 is concerned with a similar implementing resolution adopted October 8, 1974, by the Peoria County Board which resulted in the county treasurer of Peoria County submitting bills to the various taxing districts in the county for their proportionate share of the total cost of extending and collecting 1973 taxes, including a bill to the Village of Bartonville for $1,015 and a bill to the Board of Education, City of Peoria, School District No. 150 for $167,670.
The Village and School District filed a complaint for declaratory judgment and injunctive relief in the circuit court of Peoria County against Edward T. O'Connor as treasurer and ex officio collector of the County of Peoria alleging in count I that the statute and ordinance violated that portion of section 9(a) of article VII of the 1970 Constitution providing: "Fees shall not be based upon funds disbursed or collected, nor upon the levy or extension of taxes." A second count alleged the invalidity of the resolution in that it attempted to apply the statute retroactively to 1973 taxes collected prior to the passage of the resolution and prior to the effective date of the statute. After a hearing, the trial court found in favor of plaintiffs as to count I and entered an order declaring the statute and ordinance to be unconstitutional under the 1970 Constitution of Illinois, restraining future collection of costs or fees, and directing the return of all amounts theretofore collected by defendant under the ordinance and statute.
The defendant county treasurers argue on this appeal that section 21a of "An Act concerning fees and salaries * * *" conforms with section 9(a) of article VII of the 1970 Constitution in that it eliminates the objectionable "skimming *522 off" by the county collector of an arbitrary percentage which bore no relationship to the actual cost of billing and collecting taxes. They argue further that the charge to the taxing districts under section 21a is not "based upon levy or extension of taxes" as proscribed by the Constitution since it is based on the actual cost to the county of providing tax collection services to the local taxing bodies. It is also urged that when the framers of the Constitution used the word "fee" in section 9(a) of article VII they were thinking of a fixed charge rather than a charge based on actual cost.
Resolution of these questions requires reference to prior tax collection practices and the proceedings of the constitutional convention which drafted section 9(a). Prior to 1870, it was the practice in this State to give some local officials no salary but instead to permit them to keep the fees they collected from the public. This so-called "fee office" system was reformed to some degree under the 1870 Constitution, which required that specified officials be compensated for their services by salary and that compensation of all county officials, including the necessary expenses of running the office, were to be established by the county boards of each county. (Ill. Const. 1870, art. X, secs. 9, 10.) Fees continued to be the source for payment of such compensation, but the Constitution provided that all fees in excess of such compensation were to be paid into the county treasury. A number of inequities arose under this system, particularly with regard to fees charged for the collection of taxes by county and township collectors. At the time of adoption of the 1970 Constitution, county collectors were authorized to deduct a fee equal to 3% of the taxes collected on behalf of various taxing bodies within the county (Ill. Rev. Stat. 1969, ch. 53, par. 39), and township collectors had been allowed to deduct a 2% commission from all moneys so collected (Ill. Rev. Stat. 1969, ch. 53, par. 55.6). County clerks were also authorized to charge taxing districts 7 *523 cents for each tax extension. (Ill. Rev. Stat. 1969, ch. 53, par. 35.) These arbitrary charges bore little or no relationship to the actual costs incurred in extending and collecting taxes on behalf of the taxing districts, and in many cases large sums of moneys were diverted from the local taxing bodies to the county treasury in the form of "excess" fees. (See Board of Education v. Clark (1972), 51 Ill. 2d 323.) The diversion of tax funds also created problems of constitutional dimensions as exemplified in Flynn v. Kucharski (1970), 45 Ill. 2d 211. In that case, this court held unconstitutional a statute which afforded taxpayers residing outside the City of Chicago the option of paying taxes levied by Cook County either to their township collector or to the county collector. If taxes were paid to the township collector, he retained a 2% commission which was placed in the township fund and used for local township purposes. Taxes levied for countywide purposes were thus diverted to local township purposes in violation of the constitutional requirement of uniformity of taxation.
A review of the proceedings of the constitutional convention indicates little concern or discussion regarding the first two sentences of section 9(a) of article VII. The principal discussion and debate centered around the third sentence of section 9(a) providing that: "Fees shall not be based upon funds disbursed or collected, nor upon the levy or extension of taxes."
The Report of the Local Government Committee in its explanation of that sentence (7 Record of Proceedings, Sixth Illinois Constitutional Convention 1724-25; hereinafter cited as Proceedings) stated its concern with the township collector problem and concluded:
The debates upon the purpose of this third sentence of section 9(a) in our opinion clearly indicate the intent to preclude counties from seeking, in any form, reimbursement from the various taxing bodies for county services rendered in the collection of taxes. Illustrative thereof are the remarks of Delegate Zeglis who spoke to the Committee of the Whole on behalf of the Committee on Local Government regarding what is now section 9(a). He stated in part:
It is quite apparent from the discussions that the delegates to the convention realized that elimination of the compensation to counties for the tax collection services rendered other taxing bodies could well result in overall *526 tax increases, for counties would then be required to levy additional amounts to pay tax extension and collection costs while other taxing districts which formerly paid for those services would still be free to levy taxes up to their maximum limits.
Demonstrating this were the questions posed by Delegate Rigney (4 Proceedings 3405-06):
and Delegate A. Lennon, who was particularly concerned with the abolition of the township collector's fee (4 Proceedings 3406-07):
Subsequent discussion reinforces our conclusion as to the purpose of section 9(a). Delegate McCracken explained the reasons for formerly permitting the compensation which the Committee on Local Government rejected:
Thereafter an effort was made to amend the section by deleting therefrom the language which is now the third sentence of section 9(a) and the focal point of this litigation. In the course of the debate upon that proposed amendment it became quite clear that its purpose was to permit a continuation of the system of compensating townships and counties for tax extension and collection services, and that the section as proposed by the Committee was intended to eliminate that compensation. Illustrating this, Delegate Rigney, speaking in support of the proposed amendment concluded:
Delegate Zeglis was asked whether he wished to respond on behalf of the Committee. He did so, stating in part:
The proposed amendment was defeated.
It is true, as defendants argue, that section 21a of "An Act concerning fees and salaries * * *" eliminates some objectionable aspects of the collection fee system. The difficulty, however, is that it simply is not compatible with the intent of section 9(a) to eliminate the practice of counties charging local taxing districts for tax collection services, and it is in that sense that the term "fee" was utilized, not, as defendants urge, solely in the limited sense of prohibiting an arbitrary percentage or fixed charge. This *530 meaning, it seems to us, is demonstrated by the fact that the phrase "fees shall not be based upon" appearing in section 9(a) is used interchangeably with the term "fees shall not be charged for" in the debates, committee proposals and official explanation. The report of the Committee on Local Government to the Committee of the Whole with respect to section 9(a) contains the following explanation: "The last portion of the third sentence prohibits fees `based upon funds collected or disbursed'. This language prohibits, most importantly, the system under which township collectors charged a fee for the collection of taxes. * * * This portion of the last sentence also extends its prohibition to fees charged for `the levy or extension of taxes'." (Emphasis added.) (7 Proceedings 1717-18.) The official explanation of section 9(a) reads as follows: "This changes Article X, sections 9, 10, 11, 12 and 13, of the 1870 Constitution. This section places local officials on a salaried basis and eliminates fee officers. It also would end the practice of charging fees for the collection of taxes." (Emphasis added.) 7 Proceedings 2730.
The defendants also argue that to prohibit counties from recovering the costs of tax collection from the local taxing bodies would violate the constitutional requirements of uniformity of taxation and equal protection of the law under the rationale of the Flynn case. They contend that to require all taxpayers within a county to bear the burden of the cost of tax collection services creates an inequality among taxpayers in that those who pay taxes to more taxing bodies get more service from the county treasurer than those taxpayers who pay taxes to fewer taxing bodies. This argument is without merit. The Flynn case was concerned with a significantly different situation involving a choice given to some, but not all, taxpayers within a given county to pay their taxes in such a manner that taxes levied for countywide purposes were diverted to local township purposes. The constitutional *531 provision in the case before us, on the other hand, reflects a determination by the framers of the Constitution that the collection of taxes by county officers is a county function which should be supported by county taxes. Unlike Flynn, there is no diversion of tax monies nor any lack of uniformity of taxation. Perfect equality is neither a constitutionally required nor a realistic goal, and the possibility that some taxpayers or some taxing districts in the county may receive more tax collection service from county officials, is not, in our opinion, a viable objection. Schreiber v. County of Cook (1944), 388 Ill. 297, 303.
The defendants also suggest that prohibiting the county from recovering the costs of tax collection from the local taxing bodies is contrary to the letter and spirit of section 10 of article VII of the 1970 State Constitution providing for intergovernmental cooperation. With this contention we cannot agree. By law the county treasurer is required to act as ex officio collector for local taxing units. (Ill. Rev. Stat., 1970 Supp., ch. 120, par. 657.) Neither counties nor local taxing bodies have any choice in the matter, and the question of the ability of the two units of local government to contract among themselves, to obtain or share services, or to exercise, combine or transfer powers and functions as to the matter of tax collection does not arise. Section 9(a) of article VII is, of course, limited in scope to the particular functions specified therein, and does not purport in any way to limit or restrict counties and local taxing districts from contracting among themselves as to other matters.
Accordingly, the judgments of the circuit courts of Will and Peoria Counties declaring section 21a of "An Act concerning fees and salaries * * *" invalid as contrary to the provisions of section 9(a) of article VII of the 1970 Constitution of Illinois are affirmed.
Judgments affirmed.