NO. 4-10-0199 Filed 1/26/11

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

DAVID BARBER,

Plaintiff-Appellant,

v.

THE CITY OF SPRINGFIELD, an Illinois

Municipal Corporation, and LEGACY

POINTE DEVELOPMENT COMPANY, an

Illinois Limited Liability Company,

Defendants-Appellees.

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Appeal from

Circuit Court of

Sangamon County

No. 09MR896

Honorable

Patrick W. Kelley,

Judge Presiding.

_________________________________________________________________

JUSTICE POPE delivered the judgment of the court, with

opinion.

Justices Turner and Steigmann concurred in the judgment

and opinion.

OPINION

In March 2010, the trial court dismissed plaintiff

David Barber's complaint against defendants, the City of Springfield (City) and Legacy Pointe Development Company (Legacy

Pointe), for lack of standing pursuant to defendants' motions

under section 2-619(a)(9) of the Code of Civil Procedure (735

ILCS 5/2-619(a)(9) (West 2008)). Plaintiff appeals, arguing he

has standing as a taxpayer of the City. We affirm.

I. BACKGROUND

In December 2009, plaintiff filed this suit for declaratory and injunctive relief, claiming the City illegally enacted

public ordinances by which it, inter alia, established the South

Central Business District (see 65 ILCS 5/11-74.3-2 (West 2008));

adopted a business plan with respect to the district (see 65 ILCS

5/11-74.3-1 (West 2008)); imposed retailers', service, and hotel
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operators' occupation taxes on businesses in the district (see 65

ILCS 5/11-74.3-3(12), (13) (West 2008)); and entered into agreements with Legacy Pointe to develop the district (see 65 ILCS

5/11-74.3-3(6) (West 2008)). Specifically, plaintiff alleged the

City acted upon fraudulent findings that the area comprising the

district was blighted and would not develop naturally in the

absence of business districting (see 65 ILCS 5/11-73.3-5(3) (West

2008)).

In his complaint, plaintiff alleged he had standing as

a taxpayer of the City. Citing Malec v. City of Belleville, 384

Ill. App. 3d 465, 891 N.E.2d 1039 (2008), plaintiff alleged in

the complaint, "As a taxpayer, plaintiff has an equitable interest in tax funds[,] and he has standing to bring an action in

equity to prevent his equitable interest in public resources from

being used for an illegal purpose." Plaintiff further alleged, 

"The [C]ity plans to spend millions of dollars in tax funds in connection with the ***

ordinances and the agreements executed pursuant to those ordinances. Accordingly, ***

plaintiff has been irreparably harmed[,] and

this harm will continue unless and until this

[c]ourt grants injunctive relief."

In count I of his complaint, plaintiff characterized the City's

findings of blight and unlikelihood of development as "a fraud on

the taxpayers of the [C]ity." In count II, he alleged again,

"The [C]ity plans to spend millions of dollars in tax funds in
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connection with the *** ordinances and *** agreements executed

pursuant to those ordinances."

In January 2010, the City filed a combined motion

pursuant to section 2-619.1 to dismiss the complaint under

sections 2-615 and 2-619(a)(9) of the Code of Civil Procedure

(735 ILCS 5/2-615, 2-619(a)(9), 2-619.1 (West 2008)), and Legacy

Pointe filed separate motions to dismiss under sections 2-615 and

2-619(a)(9). Both defendants asserted plaintiff's lack of

standing, inter alia, as an affirmative defense to the complaint

requiring dismissal under section 2-619(a)(9).

In March 2010, the trial court held a hearing on

defendants' motions to dismiss and granted both defendants'

section 2-619(a)(9) motions in a docket order. The court agreed

with defendants' argument that plaintiff lacked standing as a

taxpayer. The court found, specifically,

"because [p]laintiff does not own property

within the business district and is not required to purchase goods there, he is not

within the universe of taxpayers who may be

adversely affected by the 1% supplemental

sales tax imposed in the business district. 

Additionally, the court finds the 1%

business[-]district tax is imposed in addition to the standard city sales tax[;] consequently, the business[-]district tax results

in no dimunition [sic] of sales[-]tax revenue
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to the [C]ity that would require replenishment by taxpayers."

Because it found plaintiff lacked standing, the court did not

address the remaining arguments presented by defendants in their

motions to dismiss.

This appeal followed.

II. ANALYSIS

On appeal, plaintiff argues he enjoys standing as a

taxpayer of the City to challenge the City's expenditure of funds

to develop the business district pursuant to the allegedly

fraudulent ordinances in question. Defendants maintain plaintiff

lacks standing because of the nature of the business-district

taxes plaintiff challenges. We agree with defendants and affirm.

A. Standard of Review

We review the trial court's dismissal pursuant to a

section 2-619(a)(9) motion to dismiss de novo. See Sellers v.

Rudert, 395 Ill. App. 3d 1041, 1045, 918 N.E.2d 586, 590 (2009). 

Further, we review the trial court's finding plaintiff lacked

standing de novo. See Hurlbert v. Brewer, 386 Ill. App. 3d 1096,

1101, 899 N.E.2d 582, 586 (2008).

B. Taxpayer Standing

The doctrine of standing allows courts to "preserve for

consideration only those disputes which are truly adversarial and

capable of resolution by judicial decision." Martini v. Netsch,

272 Ill. App. 3d 693, 695, 650 N.E.2d 668, 669 (1995). Standing

consists of an "injury in fact to a legally recognized interest." 
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Martini, 272 Ill. App. 3d at 695, 650 N.E.2d at 669. The injury

must be (1) "distinct and palpable," (2) "fairly traceable to the

defendant's actions," and (3) "substantially likely to be prevented or redressed by the grant of the requested relief." 

Martini, 272 Ill. App. 3d at 695, 650 N.E.2d at 670. Standing

determinations may differ, "depending on the issue involved and

the nature of the relief sought." Martini, 272 Ill. App. 3d at

695, 650 N.E.2d at 670. "Whether the plaintiff has standing to

sue is to be determined from the allegations contained in the

complaint." Martini, 272 Ill. App. 3d at 695, 650 N.E.2d at 670.

A plaintiff's status as a taxpayer may provide a basis

for his or her standing. The key to taxpayer standing is the

plaintiff's liability to replenish public revenues depleted by an

allegedly unlawful governmental action. Such taxpayers have a

legally cognizable interest in their tax liability, their increased tax liability is a specific injury, and their injury is

redressable by an injunction against the challenged governmental

expenditure of tax funds.

Accordingly, "[i]t has long been the rule in Illinois

that citizens and taxpayers have a right to enjoin the misuse of

public funds, and that this right is based upon the taxpayers'

ownership of such funds and their liability to replenish the

public treasury for the deficiency caused by such misappropriation." Barco Manufacturing Co. v. Wright, 10 Ill. 2d 157, 160,

139 N.E.2d 227, 229 (1956). This is because "[t]he illegal

expenditure of general public funds may always be said to involve
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a special injury to the taxpayer not suffered by the public at

large," i.e., nontaxpaying citizens. Barco Manufacturing Co., 10

Ill. 2d at 161, 139 N.E.2d at 230. A plaintiff whose claims rest

on his or her standing as a taxpayer must allege such equitable

ownership of funds depleted by misappropriation and his or her

liability to replenish them in the complaint; otherwise, the

complaint is "fatally defective." Golden v. City of Flora, 408

Ill. 129, 131, 96 N.E.2d 506, 508 (1951). When general public

funds are not directly or contingently at issue, plaintiffs lack

standing as taxpayers and must establish another ground for

standing. See Price v. City of Mattoon, 364 Ill. 512, 515, 4

N.E.2d 850, 852 (1936) ("Aside from the fact that plaintiffs, as

taxpayers, have failed to make out a case cognizable in a court

of equity, they have also failed to show by their amended complaint any other ground for equitable interference").

The determination of whether general public funds are

at issue in a taxpayer action often requires interpretation of

the statutes defining the source and usage of the funds the

misappropriation of which is alleged. For example, in Golden,

408 Ill. at 130, 96 N.E.2d at 507, the plaintiffs sued as taxpayers of the city to enjoin the city from, inter alia, performing

under a collective-bargaining agreement between itself and a

labor union representing employees of a municipally owned and

operated utility company. The plaintiffs argued "the bargaining

agreement increased the pay of the employees of the municipal

utilities involved, thus creating a financial burden and loss to

them as taxpayers and citizens of the city." Golden, 408 Ill. at
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131, 96 N.E.2d at 507. The supreme court examined the statutes

governing the municipal utility company and concluded, because

the operation of the utility was funded by the utility rates,

"the utilities here involved operate independently of the general

revenue[,] and the increased burdens and costs of operating them,

of which plaintiffs complain as taxpayers, will not result in an

increase of [taxpayers'] taxes." Golden, 408 Ill. at 132, 96

N.E.2d at 508.

The supreme court engaged in a similar analysis in

Barco Manufacturing Co. There, the plaintiffs were employers

charged with paying unemployment taxes into a trust fund from

which unemployment benefits were paid. Barco Manufacturing Co.,

10 Ill. 2d at 159, 139 N.E.2d at 229. They challenged disbursements from the trust fund to unemployed persons who received

supplemental benefits through private contracts with their former

employers. Barco Manufacturing Co., 10 Ill. 2d at 159, 139

N.E.2d at 229. Under applicable state and federal statutes, the

court found the funds were not available to the state for general

expenses. Barco Manufacturing Co., 10 Ill. 2d at 160-61, 139

N.E.2d at 229-30. Distinguishing general public funds from trust

funds, the court concluded the expenditure of the unemployment

funds in question did not accord the plaintiffs' taxpayer standing. Barco Manufacturing Co., 10 Ill. 2d at 161, 139 N.E.2d at

230.

1. Business Districts and Taxpayer Standing

Our analysis of division 74.3 of article 11 of the

Illinois Municipal Code (Code) (65 ILCS 5/11-74.3-1 through 11-
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74.3-6 (West 2008)), which defines municipalities' powers and

lays out procedural requirements regarding business-district

formation, taxation, lending, and spending, informs our conclusion that plaintiff lacks standing to challenge the ordinances at

issue in this case.

The Code lays out broad powers that municipalities

enjoy in instituting and implementing business districts. It

empowers the corporate authorities of each municipality, inter

alia, to designate an area of the municipality as a business

district, to adopt development and redevelopment proposals for

such business district, to borrow funds as necessary for

business-district development or redevelopment and issue any

obligations and bonds in connection with such borrowing, to enter

into contracts with private and public bodies, to expend public

funds as necessary in connection with business-district development or redevelopment planning and administration, and to issue

obligations secured by the Business District Tax Allocation Fund

(Business-District Fund). 65 ILCS 5/11-74.3-2, 11-74.3-3(1),

(5), (6), (9), (14) (West 2008). The Code does not impose any

special procedural requirements on a municipality that exercises

any of these powers.

The Code also allows municipalities to impose special

occupation taxes within business districts if the municipalities

comply with certain procedural requirements. Specifically, it

empowers cities to impose retailers', service, and hotel operators' occupation taxes in the business district to pay for

project costs. 65 ILCS 5/11-74.3-3(12), (13) (West 2008). If
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and only if it intends to impose such occupation taxes within a

business district, a municipality must first, inter alia, make

two formal findings. First, the municipality must find

"the business district is a blighted area

that, by reason of the predominance of defective or inadequate street layout, unsanitary

or unsafe conditions, deterioration of site

improvements, improper subdivision or obsolete platting, or the existence of conditions

which endanger life or property by fire or

other causes, or any combination of those

factors, retards the provision of housing

accommodations or constitutes an economic or

social liability or a menace to the public

health, safety, morals, or welfare in its

present condition and use." 65 ILCS 5/11-

74.3-5(3) (West 2008).

Second, it must find

"the business district on the whole has not

been subject to growth and development

through investment by private enterprises or

would not reasonably be anticipated to be

developed or redeveloped without the adoption

of the business[-]district development or

redevelopment plan." 65 ILCS 5/11-74.3-5(3)

(West 2008).

Once they have made these findings and complied with
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the other procedures enumerated in section 11-74.3-5, the Code

empowers municipalities to tax retailers, service providers, and

hotel operators doing business within the business district at a

rate not to exceed 1% of gross receipts. 65 ILCS 5/11-74.3-6(b),

(c), (d) (West 2008). In turn, the Code permits retailers to

reimburse themselves for their tax liability by collecting the

amount of the tax from consumers who purchase goods and services

in the district. 65 ILCS 5/11-74.3-6(b), (c), (d) (West 2008). 

It requires the municipality to deposit the proceeds of these

taxes "into a special fund held by the corporate authorities of

the municipality called the Business[-]District *** Fund for the

purpose of paying business[-]district project costs and obligations incurred in the payment of those costs." 65 ILCS 5/11-

74.3-6(a) (West 2008). Further, any ordinance authorizing the

issuance of obligations to fund business-district project costs

"shall pledge all of the amounts in and to be deposited in the

Business[-]District *** Fund to the payment of business[-]district project costs and obligations." 65 ILCS 5/11-74.3-6(e)

(West 2008).

As an initial matter, we address plaintiff's standing

to challenge the entirety of the ordinances of which he complains. In these ordinances, the City, inter alia, established

the South Central Business District (see 65 ILCS 5/11-74.3-2

(West 2008)); adopted a business plan with respect to the district (see 65 ILCS 5/11-74.3-1 (West 2008)); imposed retailers',

service, and hotel operators' occupation taxes on businesses in

the district (see 65 ILCS 5/11-74.3-3(12), (13) (West 2008)); and
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entered into agreements with Legacy Pointe to develop the district (see 65 ILCS 5/11-74.3-3(6) (West 2008)). The crux of

plaintiff's complaint is that the City's findings regarding the

economic state and developmental prospects of the area comprising

the business district (see 65 ILCS 5/11-74.3-5(3) (West 2008))

were fraudulent. The relief he requests (invalidation of all of

the ordinances) is based solely on these alleged defects. Even

if proved, however, these alleged defects would not entitle

plaintiff to the entirety of the relief he seeks because the

prerequisites plaintiff claims the City failed to meet apply only

to the occupation taxes the City implemented in the ordinances. 

Thus, we must affirm the trial court's dismissal of plaintiff's

complaint with respect to his challenge of any of the City's

actions apart from its imposition of occupation taxes within the

business district. Accordingly, we limit the following analysis

to whether plaintiff enjoyed taxpayer standing to challenge the

imposition and expenditure of such business-district taxes.

We conclude from their nature the business-district

occupation taxes imposed by the City do not deplete its general

revenue as they are separate from and supplemental to citywide

occupation taxes. Although segregation alone is not enough to

block taxpayer standing (Malec, 384 Ill. App. 3d 465, 891 N.E.2d

1039), it is significant that proceeds of the business-district

tax are segregated upon collection and pledged to fund costs

related to the business district.

More significantly, however, the business-district

taxes are supplemental to the City's general occupation taxes and
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do not detract from the City's general revenue fund. The City

continues to collect any non-business-district-specific occupation taxes on businesses operating in the business district, and

these taxes go to the City's general revenue. That is, the

City's general revenue fund receives the same amount from the

sale of a retail item or a service, or from the lease or rental

of a hotel room, whether the transaction occurs within the

business district or outside it. Thus, the business-district

taxation at issue here does not deplete the City's general

revenue, and plaintiff, as a taxpayer of the City, cannot be held

liable to replenish the City's general corporate fund.

Plaintiff correctly notes the City must transfer to its

general corporate fund any surplus funds remaining in the

Business-District Fund after all business-district expenses and

obligations are paid. See 65 ILCS 5/11-74.3-6(f) (West 2008). 

Plaintiff asserts the City thus forgoes general revenue by

spending money out of the Business-District Fund.

This is a completely circular argument. Plaintiff

claims if there were no expenditures from the Business-District

Fund, the funds would be available as general revenue. This

overlooks the funds would not even exist without the imposition

of the special tax and the imposition of the special tax is only

allowed where a municipality has determined it beneficial to form

a business district. The funds generated are then available to

cover development and redevelopment costs in the business district. It would be unlawful to impose the special tax if there

was no redevelopment or development plan.
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Nevertheless, plaintiff argues the expenditure of money

in the Business-District Fund provides him with standing as a

taxpayer to challenge the business-district taxes. Turning to

the complaint, we find plaintiff did not allege the City expended

or planned to expend funds from the Business-District Fund. 

Rather, plaintiff complained of the City's plans to spend "tax

funds" in general. Plaintiff cannot now, in his appellate brief,

refine the allegations in his complaint to argue he has standing. 

See Martini, 272 Ill. App. 3d at 695, 650 N.E.2d at 670. Further, as explained above, the Code empowers municipalities to

spend public funds without making the findings required under

section 11-74.3-5(3). 65 ILCS 5/11-74.3-3(9) (West 2008). 

Consequently, as he limited his complaint to his attack on the

City's section 11-74.3-5(3) findings, plaintiff's challenge

properly extends only to expenditures of funds specifically from

the Business-District Fund. By failing to specifically allege

the City planned to expend money from the Business-District Fund,

plaintiff failed to plead facts supporting his standing as a

taxpayer to invalidate the business-district taxes.

Moreover, even if we were to find plaintiff alleged

expenditures from the Business-District Fund with sufficient

specificity, such expenditures would not endow plaintiff with

standing as a taxpayer to challenge the business-district taxes. 

Any deposit into the City's general corporate fund of a residue

from the Business-District Fund would be a windfall to the City

resulting from the establishment of the business-district taxation of which plaintiff complains. That is, business-district
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taxation may improve the City's general finances by augmenting

them with any residue but may never deplete them. Thus, plaintiff cannot maintain his challenge in this case on the grounds

that business-district taxation will injure him as a taxpayer of

the City.

2. Tax Increment Allocation Redevelopment Act and

Malec v. City of Belleville

Plaintiff contends our conclusion regarding a taxpayer's standing to challenge a city's business-district taxation

is at odds with that of the Fifth District Appellate Court in

Malec, 384 Ill. App. 3d 465, 891 N.E.2d 1039. To the contrary,

we find Malec reconcilable with our decision in this case although we also reject two statements in Malec that, on their

face, seem applicable to this case. Specifically, Malec is

distinguishable in that, unlike this case, it involved a taxpayer's challenge to a municipality's implementation of taxincrement-allocation financing in conjunction with businessdistrict taxation. Further, we disagree with the Malec court's

unqualified statements (1) whether a plaintiff owns property or

operates a business within a business district is irrelevant to

determining whether a plaintiff has standing and (2) all

property- and sales-tax revenue is part of a municipality's

general revenue fund.

Malec dealt with a plaintiff's challenge to, inter

alia, a tax-increment-allocation-financing district created

pursuant to the Tax Increment Allocation Redevelopment Act (Act)

(65 ILCS 5/11-74.4-1 through 11-74.4-11 (West 2008)). Tax-
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increment-allocation financing allows a municipality to fund

present development of a designated area by pledging a portion of

that area's future property-tax returns to development-project

costs. Pursuant to the Act, after a city creates a taxincrement-allocation-financing district, all increases in the

property-tax revenue from properties within the district are

placed in a special fund to pay or repay development expenses. 

65 ILCS 5/11-74.4-3(q) (West 2008). A municipality may implement

tax-increment-allocation financing only in a district it has

found to be a blighted area, an industrial-park conservation

area, or a conservation area. 65 ILCS 5/11-74.4-3(p) (West

2008); see also 65 ILCS 5/11-74.4-3(a) (West 2008) (setting forth

the criteria for finding an area is blighted).

In Malec, 384 Ill. App. 3d at 467-68, 891 N.E.2d at

1040-41, the plaintiff sought declaratory relief invalidating a

set of ordinances designed to promote development of a shopping

center and a residential neighborhood and an injunction prohibiting the city from enforcing the ordinances. In the ordinances,

the city, inter alia, (1) established a tax-increment-allocationfinancing district and a business district covering the land

being developed and (2) imposed business-district taxes and taxincrement-allocation financing and pledged the resulting revenues

to development costs. Malec, 384 Ill. App. 3d at 467, 891 N.E.2d

at 1040-41. The plaintiff challenged these ordinances, arguing,

inter alia, the city erroneously found the area comprising the

districts was blighted and was not reasonably likely to develop

on its own. Malec, 384 Ill. App. 3d at 467-68, 891 N.E.2d 1041;
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see also 65 ILCS 5/11-74.3-5(3), 11-74.4-3(p) (West 2008).

The plaintiff alleged he had standing as a taxpayer. 

Malec, 384 Ill. App. 3d at 467, 891 N.E.2d at 1040. Finding the

plaintiff lacked standing, the circuit court dismissed pursuant

to the defendants' section 2-615(e) motion (735 ILCS 5/2-615(e)

(West 2006)). Malec, 384 Ill. App. 3d at 468, 891 N.E.2d at

1041. The Fifth District Appellate Court held the plaintiff had

standing as a taxpayer to challenge (1) the city's establishment

of the tax-increment-allocation-financing and business districts

and (2) its imposition of taxes and expenditure of funds in

relation thereto. Malec, 384 Ill. App. 3d at 471, 891 N.E.2d at

1044. In concluding the plaintiff enjoyed taxpayer standing, the

court rejected three specific contentions by the defendants. 

First, the court rejected the defendants' argument the plaintiff

lacked standing because he did not own property or operate a

business within the area comprising the districts. Malec, 384

Ill. App. 3d at 469, 891 N.E.2d at 1042. The court found that

fact irrelevant to the plaintiff's standing as a taxpayer of the

city. Malec, 384 Ill. App. 3d at 469, 891 N.E.2d at 1042.

Second, the Fifth District rejected the defendants'

argument that, "because the sources of revenue that the [c]ity is

expending are not general revenue sources, the plaintiff lacks

standing [as a taxpayer] to challenge their expenditure." Malec,

384 Ill. App. 3d at 469, 891 N.E.2d at 1042. The defendants'

argument relied on Price, Golden, and Barco Manufacturing Co.. 

Malec, 384 Ill. App. 3d at 469-70, 891 N.E.2d at 1042-43. The

court distinguished these cases on the grounds that they dealt
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with a taxpayer's standing to challenge "the expenditure of

non[]tax revenue." Malec, 384 Ill. App. 3d at 470, 891 N.E.2d at

1043. It concluded "property and sales taxes are parts of the

general revenue of the [c]ity whether or not they are earmarked

for a specific purpose or placed into a special account." Malec,

384 Ill. App. 3d at 470-71, 891 N.E.2d at 1043. It expressed

concern that "[t]o hold otherwise would be to extend the holding

in Barco[ Manufacturing Co.] so that tax revenue could be insulated from a taxpayer action by the simple act of segregation." 

Malec, 384 Ill. App. 3d at 471, 891 N.E.2d at 1043. The court

implicitly reached the further conclusion that the planned

expenditure of funds from the special accounts created by the

challenged ordinances would deplete the city's general revenue

fund, according the plaintiff taxpayer standing.

Third, the Malec court rejected the defendants' argument

the plaintiff lacked standing as a taxpayer "because the

property[-] and sales[-]tax funds at issue are only those that

will be generated by the development project itself." Malec, 384

Ill. App. 3d at 471, 891 N.E.2d at 1043. The court found this

argument begged the question raised by the plaintiff's complaint. 

Malec, 384 Ill. App. 3d at 471, 891 N.E.2d at 1044. If the area

comprising the challenged districts would develop naturally

without the actions taken by the city as the plaintiff alleged,

the court reasoned, "then all the property[-] and general sales[-]

tax revenue from that area would be available as general revenue

of the [c]ity rather than to reimburse the [d]evelopers." Malec,

384 Ill. App. 3d at 471, 891 N.E.2d at 1044. The court further
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noted, in such circumstances, "there would be no need to impose"

an additional business-district sales occupation tax, "which may

itself deter patrons from shopping or receiving services in that

area." Malec, 384 Ill. App. 3d at 471, 891 N.E.2d at 1044.

Malec is distinguishable from the case at bar because

the coupling of a business district with a tax-incrementallocation-financing district covering the same area has unique

implications on a plaintiff's standing as a taxpayer. Specifically, a municipality's employment of tax-increment-allocation

financing can be said to deplete its general revenue fund if, as

the plaintiff in Malec alleged, the area comprising the district

is not blighted and would develop naturally without the municipality's interference. That is, if the area developed without taxincrement-allocation financing, economic development would likely

have the effect of raising property values and, in turn, increasing the municipality's property-tax revenue within the area. In

this scenario, these increases in the area's property-tax revenue

would become part of the city's general revenue fund. In contrast, if the area developed as a tax-increment-allocation-financing district, these increases in property-tax revenue would go to

developers rather than the city's general revenue fund. Thus, the

implementation of tax-increment-allocation financing can be said

to deplete the city's general revenue fund if the area comprising

the district would have developed absent tax-increment-allocation

financing. In turn, this depletion of general revenue could give

rise to taxpayer standing as the court in Malec held. This

appears to have been the Malec court's concern with the defen-
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dants' question-begging argument that only revenues created by the

challenged ordinances were at issue in that case.

In contrast, expenditures of revenue from businessdistrict taxes never deplete the general revenue because the

business-district taxes are supplemental to general occupation

taxes. Business-district occupation taxes are collected in

addition to normal occupation taxes. As explained above, this

means a municipality's general revenue fund would receive the same

amount in taxes from a transaction whether it occurred within a

business district or outside it. As a corollary, whether an area

develops pursuant to a business-district plan subject to businessdistrict taxation or as a result of natural economic forces, the

city's general revenue fund receives the same amount in taxes from

the area's commerce. Thus, business-district taxation alone is

not amenable to a taxpayer action although tax-increment-allocation financing may be. Because it considered whether a plaintiff

had standing as a taxpayer to challenge both tax-increment-allocation financing and business-district taxation, Malec is distinguishable from the present case, which involves only plaintiff's

challenge to business-district taxation.

Further, we find two aspects of the Malec court's

analysis that would otherwise apply to this case unpersuasive. 

First, we would qualify that court's conclusion that a plaintiff's

interest in property or trade within a designated business district is irrelevant to that plaintiff's standing to challenge

business-district taxes. See Malec, 384 Ill. App. 3d at 469, 891

N.E.2d at 1042. Because the inquiry in a taxpayer-standing case
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is whether the challenged municipal action depletes the municipality's general revenue fund, thereby obliging the plaintiff as a

taxpayer to replenish it, a taxpayer's ownership of property or

operation of a business within a business district would not be

relevant to whether that taxpayer enjoyed standing to challenge

the establishment of the business district or the imposition of

related taxes. However, the taxpayer's interest in the district

as a property holder or business operator may be relevant to

determining whether he or she enjoyed standing under the usual

criteria.

Second, we disagree with the Malec court's finding "that

property and sales taxes are parts of the general revenue of the

[c]ity whether or not they are earmarked for a specific purpose or

placed into a special account." Malec, 384 Ill. App. 3d at 470-

71, 891 N.E.2d at 1043. In reaching this conclusion, the court

distinguished Price, Golden, and Barco Manufacturing Co. on the

basis that those cases dealt with "the expenditure of non[]tax

revenue" whereas Malec dealt with the expenditure of tax revenue. 

Malec, 384 Ill. App. 3d at 470, 891 N.E.2d at 1043. To justify

its conclusion, the court expressed concern with extending "the

holding in Barco[ Manufacturing Co.] so that tax revenue could be

insulated from a taxpayer action by the simple act of segregation." Malec, 384 Ill. App. 3d at 471, 891 N.E.2d at 1043.

While technically correct, the Fifth District's distinction between expenditures of tax and nontax revenue cannot control

the determination of whether a plaintiff enjoys taxpayer standing

to challenge the expenditures. Barco Manufacturing Co., 10 Ill.
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2d at 160, 139 N.E.2d at 229, is relevant to taxpayer-standing

cases for the proposition that "taxpayers have a right to enjoin

the misuse of public funds, and that this right is based upon the

taxpayers' ownership of such funds and their liability to replenish the public treasury for the deficiency caused by such misappropriation." Whether challenged funds are from tax or nontax

revenue is irrelevant to the determination whether their expenditure depletes the general revenue and obliges taxpayers to replenish it. Where, after careful consideration of the relevant facts

and the operation of law, it finds expenditures from a "special

account" do not deplete the general revenue, the holding in Barco

Manufacturing Co. is not improperly extended if a court holds a

plaintiff lacks standing as a taxpayer. In fact, the holding in

Barco Manufacturing Co. is unnecessarily limited if a court

employs a shorthand that is neither coextensive with nor logically

equivalent to the relevant inquiry into the impact of expenditures

on general revenue and citizens' tax liability. A limited reading

would potentially result in an overbroad allowance of taxpayer

suits where the challenged municipal action does not actually

injure taxpayers.

For these reasons, plaintiff's reliance on Malec is

unpersuasive and has no effect on our holding that he lacks

taxpayer standing to challenge the City's business-district

taxation and expenditure of the resulting revenue.

C. Special Injury

Since he lacks standing as a taxpayer, plaintiff must

plead circumstances under which he suffers a special injury not
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common to the public at large. However, plaintiff's standing, as

pled in his complaint, relied entirely on his equitable interest

in municipal tax funds and his corresponding equitable interest in

preventing public resources from being used for an illegal purpose. Plaintiff did not allege he suffered a special injury. 

Moreover, plaintiff did not petition the trial court for leave to

amend his complaint when confronted with defendants' motions to

dismiss for lack of standing.

In summary, plaintiff does not own property in the

Business District, nor is he required to collect any BusinessDistrict Tax. No general revenue funds have been or will be

provided to the district nor will general revenue funds be diminished or depleted because of the creation of the Business District. Plaintiff will have no obligation to replenish the City's

general revenue funds and by choosing to shop elsewhere in the

City, he can avoid paying the special tax. Accordingly, we find

plaintiff lacked standing as a matter of law, and the court did

not err in dismissing plaintiff's complaint.

III. CONCLUSION

For the foregoing reasons, we affirm the trial court's

judgment.

Affirmed.