Opinion ID: 2199686
Heading Depth: 1
Heading Rank: 1

Heading: Extent of Legislative Discretion Authorized

Text: The State Board argues that Article 10, Section 1, commits the design of a property taxation system to the legislative branch and imposes no judicially-manageable standards permitting adequate review of the legislative choices involved. It contends that courts must defer to legislative judgment in matters of competing policy goals properly within the legislative purview. This Court reviews the constitutionality of statutes with the understanding that [t]he legislature has wide latitude in determining public policy, and we do not substitute our belief as to the wisdom of a particular statute for those of the legislature. Rendleman, 603 N.E.2d at 1334. As such, [a] statute is not unconstitutional simply because the court might consider it born of unwise, undesirable, or ineffectual policies. Id. Nevertheless, we are also mindful of our role as guardian of the constitution, Bunker v. Nat'l Gypsum, 441 N.E.2d 8, 11 (Ind.1982), and the requirement that [j]udges must enforce the Constitution as written and intended. Bd. of Trustees of Pub. Employees' Retirement Fund of Ind. v. Pearson, 459 N.E.2d 715, 717 (Ind.1984). Consequently, [w]here a law or the application of a law is challenged on constitutional grounds, the judiciary has the authority, as well as the duty, to explore the constitutional ramifications of the law. City of Anderson v. Assoc. Furniture and Appliances, Inc., 423 N.E.2d 293, 295 (Ind.1981). Cautious of this balance between the court as guardian of the constitution and the General Assembly as policy-makers, we have stated: In approaching a consideration of the constitutionality of a statute, we must at all times exercise self restraint. Otherwise, under the guise of limiting the Legislature to its constitutional bounds, we are likely to exceed our own. That we have the last word only renders such restraint the more compelling. We, therefore, remind ourselves that in our role as guardian of the constitution, we are nevertheless a court and not a `supreme legislature.' Bunker, 441 N.E.2d at 11. However, it is equally important that we observe Justice DeBruler's admonition that, [w]hile this Court respects the separation of powers, we do not permit excessive formalism to prevent necessary judicial involvement. Where an actual controversy exists we will not shirk our duty to resolve it. Ind. Dep't of Environmental Management v. Chemical Waste Management, Inc., 643 N.E.2d 331, 337 (Ind. 1994). Thus, while courts must not interfere with the General Assembly's proper exercise of its constitutional prerogative to determine public policy and to enact legislation in furtherance thereof, the judiciary is obligated to enforce our state constitution's provisions regarding legislative action. In the discharge of our constitutional obligations, we may be required to determine whether such legislative action is constitutionally valid. Examining the constitution in the context of the history surrounding its drafting and ratification, we find that the substance of Article 10, Section 1 was proposed at the constitutional debates by Delegate Daniel Read of Monroe County on December 3, 1850. He stated: [N]o provisions are more proper for a Constitution, than those requiring equality of assessment for purposes of taxation. The duty of the Legislature to devise a system which will secure such equality and which will cause all the property of the State to be brought under taxation, should be held forth in the Constitution. Comments of Delegate Read (Dec. 3, 1850), in 1 REPORT OF THE DEBATES AND PROCEEDINGS OF THE CONVENTION FOR THE REVISION OF THE CONSTITUTION OF THE STATE OF INDIANA, 941 (Indiana Historical Collections Reprint, 1935). Many of his comments at the convention illustrate the sentiments surrounding this issue at the time our constitution was adopted: I have noticed that the Governors of our State in the annual messages for a number of years past, have called the attention of the Legislature, and the people of the State at large, to the great inequality of assessment and taxation as existing under our laws. In many parts of the State the subject has excited much attention.... There is manifest injustice in permitting property in the hands of the wealthy ... to be taxed only on a very small part of its value. Id. at 946. Another commentator, after analyzing materials documenting the conditions at the time of the adoption of our new constitution, noted that there was much dissatisfaction in Indiana in relation to the tax laws. William Wright, Problems in Indiana Taxation at 24 (1915) (Master's thesis, Earlham College) (on file with the Indiana Historical Society Collections). After reviewing and comparing the Indiana Auditor's Reports from 1845, 1847, 1851, and 1852; the Indiana Governor's Messages of 1838 and 1840; the Indiana House Journals from 1838, 1840, 1848, and 1850; the laws of 1840 and 1851; the Journals of the Constitutional Convention; the Debates of the Constitutional Convention; and the First Indiana Tax Conference of 1914, he observed that [t]here was no uniformity between districts nor within the districts, and that [p]roperty was in most cases assessed at a mere fraction of its value, concluding [i]t was such a situation that the framers of the Constitution of 1850 wished to remedy. Id. The statements of delegates at the constitutional convention similarly illustrate the mischief the framers were seeking to remedy with Article 10, Section 1, as the delegates provided examples of exactly how unjust has been the operation of the present system of taxation. Comments of Delegate Borden (Dec. 4, 1850), in 1 REPORT OF THE DEBATES AND PROCEEDINGS, 950. Offering the following example, Borden related his knowledge of a Madison estate that had been taxed at sixty thousand dollars during the owner's lifetime. However, upon his death, the same estate was appraised at its real cash value, and was valued at something like three hundred thousand dollars. Id. He then offered another example of an estate which had been taxed only to the amount of a hundred thousand dollars, when the estate, upon [the owner's] decease, was found to be really worth between four and five hundred thousand dollars. Id. Daniel Read emphasized [t]here is manifest injustice in permitting property, in the hands of the wealthy, which ought to be taxed as other property, to escape taxation altogether, or to be taxed only on a very small part of its value. Comments of Delegate Read (Dec. 4, 1850), in 1 REPORT OF THE DEBATES AND PROCEEDINGS, 946. He expressed astonishment to discover that [u]pon examining the Auditor's duplicate in my own county, I noticed farms which were of equal value assessed at a difference of fifty perc., and farms of less value than other farms, assessed at a much higher rate. Id. It is apparent from Read's remarks at the convention that the purpose and intent of Article 10, Section 1, was to specifically require uniform and equal assessment and taxation, and just valuation. Including such requirements in the constitution elevated and preserved their importance as fundamental principles. However, at the same time, he acknowledged the aspirational nature of such language, implying that he did not expect the full achievement of absolute and precise exactitude. He stated: I do not suppose, sir, that these inequities can be corrected by the Constitution, nor even wholly by the laws. But I would lay down the rule in the Constitution. It will be in the minds of the people. It will be before the Legislature. It will strengthen those who wish to secure a system of just and equal taxation. The rule will be a part of the organic law, and the people and the Legislature will endeavor to work up to a rule so manifestly just and equitable. If the rights of society are to be equalif men are to stand upon the same platformif none are to enjoy special privileges or exemptions which others do not enjoy, let the rule requiring it go into the Constitution. Whatever else we omit, let us not omit a principle so fundamental in its character, and lying at the very foundation of free government. Id. An argument similar to that urged by the State Board in the present case was presented during the convention debates by Delegate Stevenson, who preferred leaving the whole subject of taxation to the Legislature. Comments of Delegate Stevenson (Dec. 4, 1850), in 1 REPORT OF THE DEBATES AND PROCEEDINGS, 947. Stevenson opposed Read's proposal, and argued that the general provision found in the Wisconsin Constitution, The rule of taxation shall be uniform, and taxes shall be levied upon such property as the Legislature shall prescribe, was sufficient to embrace all that should be included in the Indiana Constitution. Id. at 948. This view, however, did not prevail, and Article 10, Section 1, was adopted, almost exactly as originally proposed by Read. The purpose and intent of Article 10, Section 1, was reviewed just fifteen years later in Bright v. McCullough, 27 Ind. 223 (1866), which explained that [t]he constitutional provision under consideration is a restriction upon the otherwise discretionary powers of the legislature, and prescribes the rule for its government in authorizing the levy of taxes, and it must be governed by that rule.... Id. at 232. [5] The language of Article 10, Section 1, along with the circumstances of its adoption at the Constitutional Convention, clearly demonstrate that the framers did not intend to give the legislature unrestrained discretion as to the laws of assessment and taxation. The foundational requirement of uniform and equal assessment and taxation is not diminished by the language delegating to the General Assembly the responsibility to prescribe regulations to secure a just valuation for taxation of all property. Article 10, Section 1, does not immunize legislative policy judgments from judicial oversight, but rather establishes mandatory minimum requirements for our system of property assessment and taxation. The Tax Court did not err in undertaking to determine if Indiana's system of real property assessment complies with the constitutional prerequisites.