Title: Dornacker v. Olson
Citation: 248 N.W.2d 844
Docket Number: 9274
State: north-dakota
Issuer: north-dakota Supreme Court
Date: December 31, 1976

248 N.W.2d 844 (1976) E. N. DORNACKER, Mayville, North Dakota, for himself and others similarly situated, Plaintiff, v. Mildred OLSON, as Traill County Auditor, Defendant. Civ. No. 9274. Supreme Court of North Dakota. December 31, 1976. *846 William J. Brudvik, Mayville, for plaintiff. Dewel E. Viker, Jr., State's Atty., Hillsboro, and Gerald W. Vande Walle, Chief Deputy Atty. Gen., Bismarck, for defendant; argued by Gerald W. Vande Walle, Bismarck. PEDERSON, Justice. This case involves legal questions certified to this Court by the district court of Traill County, pursuant to Chapter 32-24, North Dakota Century Code. Sufficient facts were stipulated to support the questions, and from the implication in the order by the district court we assume that the stipulation was adopted as a finding of fact. The questions are neither frivolous nor interlocutory in nature. We agree with the district court that the questions are of sufficient importance to determine the issues in the case. See § 32-24-02, NDCC, and In re Garrison Diversion Conservancy District, 144 N.W.2d 82 (N.D.1966), and cases cited therein. The questions are: Section 57-15-24, NDCC, provides: The parties stipulated the following facts: Because the questions certified to us are interrelated, we will consider them simultaneously. We will first examine the historical background and our previous interpretations. In the very first session of the Dakota Territorial Legislative Assembly in Yankton in 1862, a comprehensive Act for the regulation and support of the common schools was enacted. No territorial controlled fund was established but all expenses of maintaining the schools was made a responsibility of the counties or the school districts. (Chapter 81, General Laws of the Territory of Dakota, 1862.) The Congress of the United States, in providing for the division of Dakota Territory into two states and enabling the admission of North Dakota and several other states into the Union (Chapter 180, 25 United States Statutes at Large 676, Approved February 22, 1889), provided in part: "That provision shall be made for the establishment and maintenance of systems of public schools, which shall be open to all the children of said States, and free from sectarian control." [See Jones v. Brightwood Independent School Dist. No. 1, 63 N.D. 275, 247 N.W. 884, 886 (1933).] The Constitution of the State of North Dakota, adopted by the First Constitutional Convention on August 17, 1889, and by the voters on October 1, 1889, in § 147, provided that: The original Constitution provided, also, in § 148, that: "The legislative assembly shall provide at their first session after the adoption of this constitution, for a uniform system of free public schools throughout the State; * * *." [Emphasis added.] Thereafter, the First Legislative Assembly did provide for a uniform system of free public schools through a system of school districts, financed by a local ad valorem property tax levy of not exceeding 30 mills. (Sections 101 and 102, Chapter 62, Laws of 1890.) From 1890 to this date, we find that the statutes governing the financing of elementary and secondary schools have been in a state of nearly constant revision, but we find that in no instance has local financing by either school district or county been totally eliminated. If we were to conclude that the costs of the public school system are "an expense of the State," then Section 174 of the North Dakota Constitution would apply: In State v. Hanna, 28 N.D. 583, 149 N.W. 573, 574 (1914), this court, referring to Section 174 of the Constitution, said: "* * * the framers of the Constitution clearly intended to thus limit the raising of revenue for all purposes whatsoever except that mentioned in the last clause of the section." [Emphasis added.] Subsequently, we said in State v. Langer, 68 N.D. 167, 277 N.W. 504, 511 (1938), that Although Hanna, supra, and Langer, supra, may first appear to be diametrical opposites, they can be distinguished in that, in Langer, the levy which exceeded four mills was made in pursuance of another specific constitutional provision, Section 182 of the Constitution, as amended, authorizing the State to issue or guarantee bonds. The Court further explained that: See also, Stinson v. Thorson, 34 N.D. 372, 158 N.W. 351 (1916). In State v. Lewis, 18 N.D. 125, 119 N.W. 1037, 1040 (1909), which involved the state institution for the feeble-minded at Grafton, and where it was contended that, because of Section 174 of the Constitution, the counties could not be required to aid the State in maintaining the institution or its indigent inmates, this Court said: State ex rel. Walker v. Link, 232 N.W.2d 823 (N.D.1975), does not conflict with State v. Lewis, supra. See also, Craig v. Board of Equalization of Douglas County, 183 Neb. 779, 164 N.W.2d 445 (1969). Several years after State v. Lewis, supra, the Court had before it a challenge to the *849 authority of the State in a case involving a law which required the counties to send to the state treasurer ten cents per child for a teacher insurance and retirement fund. Although the application of Section 174 of the Constitution does not appear to have been raised, it is interesting to note that the court said: The very next year (1918) the Court had a case in which an issue was the application of Section 174 of the Constitution, but not involving education, and the court said: "Again, we are prone to reiterate the thought that a construction of the Constitution which would compel the accomplishing of legitimate aims by indirection should be avoided, * * *." State v. Wetz, 40 N.D. 299, 168 N.W. 835, 843 (1918). We think it is of concern to note that this Court has called a mandatory levy for school purposes "* * * a tax levied by the Legislature itself * * *." Davis v. Pierce County, 49 N.D. 397, 191 N.W. 618, 619 (1922). The case did not involve Section 174 of the Constitution. Possibly the most significant case called to our attention on this matter, but which also did not involve Section 174 of the Constitution, is that of Todd v. Board of Education, 54 N.D. 235, 209 N.W. 369, 371 (1926), where the Court said: Then, in a tuition dispute case, State v. Alquist, 59 N.D. 762, 231 N.W. 952, 954 (1930), the Court said that: "The school system is the school system of the statenot of an organized administrative unitand the state in fostering this system may, and in certain respects does, require such units to furnish and support the schools, sometimes with state aid under special conditions." In holding that the taxing power of the Legislature is without limit, except such as may be prescribed by the Constitution, the Court said that "if a contested enactment is not prohibited either by the letter or the spirit of the Constitution, it is authorized." Aubol v. Engeseth, 66 N.D. 63, 262 N.W. 338, 340 (1935). From the cited cases we can readily conclude that the public school system is the system of the State and that it is within the authority of the Legislature to provide for the maintenance of that system through a State or legislative levy of taxes or through a mandatory local levy. It appears to be Dornacker's principal argument that if the school system is the school system of the State, then the costs of maintaining it are "an expense of the State" within the contemplation of Section 174 of the North Dakota Constitution. State v. Alquist, supra, held that the school system is the school system of the State and that local taxing units can be required to support that system. Dornacker says that the State cannot do indirectly what it is prohibited from doing directly. (See also, State v. Wetz, supra.) Counties in this State are creatures of the Constitution itself [see §§ 130, 166-173, 175, North Dakota Constitution, and Hart v. Bye, 76 N.W.2d 139 (N.D.1956)], and when taxes are applied to a State purpose, that includes the counties [City of Bismarck v. Kleinschmidt, 145 N.W.2d 333, 336 (N.D. 1966)]. In Divide County v. Baird, 55 N.D. 45, 212 N.W. 236, 243 (1927), this Court said that the county "* * * may `speak and *850 act only in the manner and on the matters prescribed by the Legislature in statutes enacted pursuant to constitutional authority.' McHenry County v. Northern Trust Co., 51 N.D. 646, 662, 200 N.W. 888, 893," a 1924 case. In the case of United Accounts, Incorporated v. Dachtler, 100 N.W.2d 93 (N.D. 1959), we said that a county is an agency of the State. It is not suggested that the establishment (in the Constitution) of the counties as agencies of the State, or the establishment of the school districts (by the Legislature) were mere acts of subterfuge to avoid the consequences of the limitation imposed by Section 174 of the Constitution. Dornacker says that when compared to the other statutory provisions for the levy of ad valorem property taxes, State and local, the 21-mill levy for schools "* * * occupies a unique position." He acknowledges that Section 148 of the Constitution commands that the Legislature finance education. He acknowledges that the Legislature can command the levy of a tax by the county. He may be correct in stating that, at the present time, "the 21 mill levy is the only tax which is not based by law upon an itemized budget, upon local voter approval, nor by limiting words such as `not to exceed,' etc." However, the very first school legislation in this State (Chapter 62, Section 102, S.L.1890) provided: Whether the 21-mill school levy now is, or is not, unique is no basis upon which we can determine its validity. The Legislature is empowered to write the rules that govern the levy of taxes, the collection thereof, and the purposes for which the resulting revenues may be expended. We are not convinced that the Legislature engaged in subterfuge to avoid Section 174 of the Constitution in specifying that local property taxes (levied by the county) should support the public schools, with some State aid from non-property taxes. The Traill County auditor refers us to some Nebraska decisions that discuss some of the complications which result from the commingling of governmental functions involving State and local purposes. Nebraska's Constitution prohibits the levying of property taxes for "state purposes" as distinguished from our Constitution which limits property tax levies to four mills for the "expenses of the State." The Nebraska decisions are helpful in understanding the difficulty in separating State expense or purpose from local expense or purpose. See State v. Tallon, 196 Neb. 603, 244 N.W.2d 183 (1976); State ex rel. Meyer v. County of Banner, 196 Neb. 565, 244 N.W.2d 179 (1976); Kovarik v. County of Banner, 192 Neb. 816, 224 N.W.2d 761 (1975); State ex rel. Western Neb. T. C. Col. Area v. Tallon, 192 Neb. 201, 219 N.W.2d 454 (1974); and Craig v. Board of Equalization of Douglas County, 183 Neb. 779, 164 N.W.2d 445 (1969). We have examined the cases cited by Dornacker from Georgia, Michigan, Nebraska, Illinois, and Arkansas which relate to limitations on tax powers of legislatures, but find none that assist us in resolving the questions before the Court. We conclude that § 174 of the Constitution was adopted with the understanding *851 that its provisions did not limit local levies for public schools. Neither does § 147 limit the State in expending revenues, not raised by a property tax levy, for the maintenance of the public school system. Although the Legislature may prescribe rules under which counties and school districts function, and may relieve the counties and school districts of any or all of the obligation to finance the school system, Section 174 of the Constitution does not become involved unless a property tax levy is made by the State directly. The district court correctly answered the questions and the matter is remanded for further proceedings accordingly. Because a public question is involved, there will be no costs on the appeal. ERICKSTAD, C. J., and PAULSON, SAND and VOGEL, JJ., concur.