No. 86-411 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

STATE OF MONTANA, ex rel., MONTANA 

SCHOOL BOARD ASSOCIATION, MONTANA 

ASSOCIATION OF COUNTIES, MONTANA 

LEAGUE OF CITIES AND TOWNS, MUSSELSHELL COUNTY, CUSTER COUNTY, CHOUTEAU 

COUNTY, YELLOWSTONE COUNTY, BUTTESILVER BOW LOCAL GOVERNMENT, CHARLES 

L. EVANS, and MICHAEL S. BECKER, 

Plaintiffs and Relators, 

JIM WALTERMIRE, Secretary of State of 

the State of Montana, 

Defendant and Respondent, 

and 

FRIENDS OF THE CONSTITUTION, INC., 

Real Party in Interest. 

ORIGINAL PROCEEDING: 

COUNSEL OF RECORD: 

For Petitioner/Relator: 

Charles E. Erdmann argued, Helena, Montana 

For Respondent: 

Hon. Mike Greely, Attorney General, Helena, Montana 

H. Elwood English arqued for Secretary of State, 

Helena, Montana 

For Real Party in Interest: 

Carter Picotte argued for Friends of the Consitution, 

Helena, Montana 

For Amicus Curiae: 

David Gliko, City Attorney, Great Falls, Montana 

Roger Tippy for Montana Legal Defense Fund, Helena, Montana 

Filed : 

Submitted: October 7, 1986 

Decided: December 11, 1986 

DEC 2 1 1986 

."".".---- 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

In an application to this Court for a writ of injunction 

and declaratory judgment, plaintiffs and relators challenged 

the constitutionality of Constitutional Initiative 27, the 

"property tax initiative." On October 7, 1986, this Court 

issued an order denying the requested relief (copy of order 

attached to this opinion). This opinion sets forth the 

Court's reasoning. 

The issues are: 

1. Is the Initiative invalid on its face as a violation 

of the Contract Clause of the U.S. Constitution? 

2. Does t.he Initiative present more than one amendment 

in a single ballot measure in violation of Mont. Const. Art. 

XIV, § 11? 

3. Does the Initiative present irreconcilable conflicts 

with Mont. Const. Art. VIII, § 2, and Mont. Const. Art. 111, 

§ 7? 

Constitutional Initiative 27 was certified to the Governor as officially filed on June 27, 1986. The Initiative 

would amend Montana's Constitution by adding a new section to 

Article VIII as follows: 

Section 15. Certain taxes prohibited--certain tax 

changes only by referendum or initiative. No tax 

shall be imposed on any real or personal property. 

The establishment of a sales tax, or the increase 

of sales tax or personal income tax shall be accomplished only by referendum of the legislature with 

the approval of a majority of the qualified electors or initiative of the people. 

It would also repeal several sections of the Montana Constitution: Art. VIII, 5 3, 4, and 5, and Art. XII, § l(2). 

On September 3, 1986, plaintiffs and relators filed an 

application for an original proceeding in this Court pursuant 
to Rule 17 of the Montana Rules of Appellate Civil Procedure, 

asking that CI-27 be declared unconstitutional on its face 

under the Uniform Declaratory Judgment Act. They requested 

that the Secretary of State be enjoined from presenting CI-27 

to the voters. They filed a brief in support of their 

application. 

This Court ordered that all named parties submit briefs, 

reserving decision on whether it would accept jurisdiction of 

plaintiffs' application. After all briefs were filed, oral 

arguments were heard. This Court then issued its order 

denying the applicat.ion for a writ of injunction and 

declaratory judgment. 

I 

Is the Initiative invalid on its face as a violation of 

the Contract Clause of the U.S. Constitution? 

Article I, Section 10 of the United States Constitution 

provides that no state shall pass a law impairing the obligation of contracts. Plaintiffs contend that the Initiative 

would impair bond contracts already issued by Montana cities, 

counties, and school districts by repealing the statutes 

which provide for the method of repayment of bonds. The 

defendants counter that there is no impaired contract now 

before this Court and that other sources could be arranqed 

for repayment of the bonds prior to the July 1987 effective 

date of the Initiative. 

The peoples' right to alter or abolish our state constitution and form of government whenever they deem it necessary 

was present in our 1889 Constitution and remains substantially unchanged today at Mont. Const. Art. 11, § 2. Under the 

1889 Constitution, the people had the right to make statutory 

changes by initiative. In opinions decided under that 
provision, this Court accepted jurisdiction over pre-election 

initiative challenges only where the challenged initiative 

was not properly submitted under the election laws, e.g., 

State ex rel. Livingston v. Murray (1960), 137 Mont. 557, 354 

P.2d 552, and where the challenged initiative was unconstitutional on its face, e.g., State ex rel. Steen v. Murray 

(1964), 144 Mont. 61, 394 P.2d 761. The right of the people 

to make statutory changes by initiative is retained in Art. 

111, S 4 of our 1972 Constitution. The people also have the 

right under Art. XIV, S 9 of our 1972 Constitution to make 

constitutional changes by initiative: 

Amendment by initiative. (1) The people may also 

propose constitutional amendments by initiative. 

Petitions including the full text of the proposed 

amendment shall be signed by at least ten percent 

of the qualified electors of the state. That 

number shall include at least ten percent of the 

qualified electors in each of two-fifths of the 

legislative districts. 

(2) The petitions shall be filed with the 

secretary of state. If the petitions are found to 

have been signed by the required number of electors, the secretary of state shall cause the amendment to be published as provided by law twice each 

month for two months previous to the next regular 

state-wide election. 

(3) At that election, the proposed amendment 

shall be submitted to the qualified electors for 

approval or rejection. If approved by a majority 

voting thereon, it shall become a part of the 

constitution effective the first day of July following its approval, unless the amendment provides 

otherwise. 

This right of the people to amend the Constitution by initiative is a unique and important retained power. The inclusion 

of this right in the 1972 Constitution emphasizes the degree 

of control the people desired to retain over the changes in 

their Constitution. We conclude that it is not the function 

of this Court to intervene in the initiative process prior to 

the peoples' vote absent extraordinary cause, and that our 
discretionary jurisdiction under Rule 17, M.R.App.Civ.P., 

should not be exercised unless it is absolutely essential. 

The impairment of contract challenge does not suggest 

that the Initiative is unconstitutional on its face as was 

the initiative in Steen. In substance, it is a contention 

that the Initiative would be unconstitutional as applied to 

bonds and other obligations already issued by cities, towns, 

school districts, and other parts of state government. The 

record before us does not contain any bonds or other obligations which are alleged to have been unconstitutionally 

affected. If the Initiative were adopted by the people, 

there would be an adequate opportunity to present this issue 

in the court system and determine if the impairment of contract challenge in fact does apply to obligations in existence. We do not find the type of compelling requirement 

necessary to move our discretion in this manner. We therefore declined to accept jurisdiction of this issue prior to 

the election. 

I1 

Does the Initiative present more than one amendment in a 

single ballot measure in violation of Mont. Const. Art. XIV, 

§ ll? 

Plaintiffs and relators say that the Initiative addresses several distinct subjects, including property taxes, sales 

taxes, and s.1.D.'~. They argue that this violates Mont.. 

Const. Art. XIV, § 11: "If more than one amendment is submitted at the same election, each shall be so prepared and 

distinguished that it can be voted upon separately." 

As we stated under Issue I, this Court has exercised 

pre-election jurisdiction to remove an initiative from the 

ballot only when there was a procedural defect or when the 
initiative was clearly unconstitutional its face. The 

Steen case involved the latter reason. There, the text of 

the proposed initiative clearly and directly contradicted a 

constitutional provision prohibiting the legislature from 

authorizing gambling. In the present case, in contrast, 

there are strong arguments on both sides of the issue of 

whether the Initiative violates the constitutional requirement that initiatives must address only one subject. Such a 

close issue deserves the considered judgment of this Court 

and is inappropriate for the hurried consideration requested 

in the present pre-election determination of 

constitutionality. We concluded that to pull this Initiative 

off the ballot while we considered this aspect more carefully 

would be an unjustified infringement on the people's right of 

initiative. Additionally, this issue could have been addressed following the election, had the Initiative been 

adopted. - See, e.g., State ex rel. Corry v. Cooney et al. 

(1924), 70 Mont. 355, 225 P. 1007; State ex rel. Hay v. 

Alderson (1914), 49 Mont. 387, 142 P. 210; State v. Board of 

Com'rs. (1906), 34 Mont. 426, 87 P. 450. We therefore declined to exercise our discretionary jurisdiction over this 

issue prior to the election. 

Does the Initiative present irreconcilable conflicts 

with Mont. Const. Art. VIII, § 2, and Mont. Const. Art. 111, 

Plaintiffs and relators maintain that the portion of the 

Initiative which prohibits property taxes conflicts with 

Mont. Const. Art. VIII, $ 2, which states "[tlhe power to tax 

shall never be surrendered, suspended, or contracted away. " 

They also argue that allowing sales or personal income taxes 
to be established or increased only after approval by a 

majority of the qualified electors would require a 

supermajority for passage of such measures, because Mont. 

Const. Art. 111, § 7, defines the number of qualified electors as the number of voters in the previous gubernatorial 

election. Plaintiffs assert that if the Initiative passed, a 

majority of the number of voters in the previous gubernatorial election would have to approve proposed sales or personal 

income taxes. Plaintiffs state that this would conflict with 

Mont. Const. Art. 11, $ 2, which they say implies that a 

majority of the voters will prevail. 

Plaintiffs contended that this Court should strike the 

Initiative from the November ballot because of these conflicts. We declined to do so. No constitutional conflict 

would exist until and unless the Initiative was enacted into 

law by popular vote in November. Even then, the time period 

until July 1, 1987, would remain in which to raise objections 

to the Initiative before it took effect as law. At that 

time, any unconstitutional portions of the Initiative could 

be severed. These factors, along with our firm conviction of 

the value and importance of the right of initiative which is 

retained by the people of Montana, led us to conclude that 

the interests of our state would best be served, and the role 

of this Court best fulfilled, if the Court did not intervene 

prior to the election. 

We Concur: 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

No. 86-411 

STATE OF MONTANA ex rel. MONTANA 

SCHOOL BOARD ASSOCIATION, MONTANA 

ASSOCIATION OF COUNTIES, MONTANA 

LEAGUE OF CITIES and TOWNS, 

MUSSELSHELL COUNTY, CUSTER COUNTY, 

CHOUTEAU COUNTY, YELLOWSTONE COUNTY, 

BUTTE-SILVER BOW LOCAL GOVERNMENT, 

CHARLES L. EVANS, and MICHAEL S. 

BECKER, 

Plaintiffs and Relators, . 

JIM WALTERMIRE, Secretary of State 

of the State of Montana, 

Defendant and Respondent, 

FRIENDS OF THE CONSTITUTION, INC., 

Real Party in Interest. 

ORDER 

Plaintiffs and Relators have filed an original proceeding in this Court for Writ of Injunction and Declaratory 

Judgment, in which they challenge the constitutionality of 

Constitutional Initiative 27, which in part is entitled as an 

initiative to amend the Montana Constitution to abolish taxes 

on real and personal property. Briefs, motions, and other 

materials have been filed by Plaintiffs and Relators, Defendants and Respondents, and Real Party in Interest. Oral 

argument was held before the Court on this date. The Court 

has concluded it is advisable to immediately issue its Order 

to inform all parties of the result. 
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Special concurrence by Mr. Justice John C. Sheehy, Mr. 

Justice William E. Hunt, Sr., and Mr. Frank B. Morrison, Jr.: 

We have voted today, with reservations, that this Court 

should allow CI-27 to remain on the statewide ballot in the 

general election of 1986. 

Our reservations are that: (1) CI-27 does indeed 

violate the Contract Clause of the United States Constitution 

(Art. I, § 10) and of the 1972 Montana Constitution (Art. 11, 

S 31); (2) does create an unreconcilable conflict with Art. 

VIII, 5 2 and with Art. 111, S 7, of the 1972 Montana 

Constitution; and, (3) is duplicitous and even triplicitous 

in the number of subjects submitted in one initiative. 

Why would we allow it at all in the face of such 

substantive defects? First, because time remains after the 

general election and before the effective date if CI-27 

passes, for the legislature and this Court to take curative 

actions. For exa-mple, this Court could hold the initiative 

unconstitutional as to contracts impaired; or we could hold 

that special assessments are not a form of taxation at all, 

but charges levied for benefits bestowed. Likewise, we can 

still decide, if CI-27 passes, the irreconcilable issues 

before the effective date. The legislature itself may adopt 

a plan acceptable to the voters by referendum before the 

effective date. 

Our second reason is not legal but practical. CI-27 is 

not so much a fatal disease as it is a symptom that somthing 

is ailing in the Montana body politic. While the economy has 

stagnated or receded in most areas of Montana, the 

ever-galling property tax load has increased out of 
proportion to the local economies. There would be no gain 

here to record the reasons, most of which lie directly at the 

legislature's door, some of which accrue from the bloated 

administrations of school districts, counties and towns, and 

one of which is the curtailment of the federal largesse. Not 

the least pain in our political body is the miserable 

mismanagement by the state of the 5-year revaluation program, 

which has brought thousands of property owners to their 

courthouse doors demanding relief. 

The 55,000 signers of petition for CI-27, and their 

ranks of supporters, are saying out loud that property taxes 

in Montana have become regressive. Since all taxes, 

regardless of their names, are paid out of our incomes, a 

growth in taxation which is not accompanied by a growth in 

our incomes necessarily becomes strangular. Some Montanans 

feel a hand at their throats. They see CI-27 as a means to 

escape the strangle-hold. They are as entitled to express 

their outrage at the ballot box against taxation as against 

candidates. Whether they are right can be decided later, if 

CI-27 passes. 

We therefore concur. 

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