Opinion ID: 853052
Heading Depth: 2
Heading Rank: 4

Heading: Local Share Is Based On Experience

Text: The Tax Court noted that Indiana's ninety-two counties have seventy-two different tax rates. See Griffin, 765 N.E.2d at 720. The reason for this, of course, is because the HCI property tax levy is based on an extrapolation of historical HCI costs in each particular county. The intended purpose of basing the HCI property tax classification system on such historical costs was to impose burdens in just proportions to the benefits received by each county's residents. (Amicus Curiae Br. at 2.) Before HCI, a county was responsible for the necessary costs of care, but there was no limitation on the amount of necessary costs a county might have to bear. Ind.Code § 12-5-6-6 (1998). Taxpayers who lived in a county with a higher percentage of indigent residents risked responsibility for very significant expenses for medical care. Because of this open-ended burden, the legislature made certain changes to the program in 1986 so as to reduce the counties' burdens. (Amicus Curiae Br. at 5-6.) For the first time, the amount of a county's financial obligation was capped. [5] Id. at 6. The amount of a county's financial responsibility for indigent medical care was calculated via a formula that took into account that county's actual HCI expenditures from 1984-1986. [6] Id. By definition, the limit of a county's financial obligation under the HCI program was not influenced by the HCI payment experience of any other county. Id. This formula remains in place today. [7] Local Taxes Always Vary. The theory of every republican government is that taxes should be levied equally, but this is impossible, even in the simplest states of society. State ex rel. Lewis v. Smith, 158 Ind. 543, 547, 63 N.E. 25, 27 (1902). The difficulty becomes more and more pronounced as civilization becomes more complex, because the circumstances and pursuits of the people become more diversified. Id. `A just and perfect system of taxation,' said Chancellor Kent, `is yet a desideratum in civil government.' Id. ( citing 2 Kent, Comm. 332). `Perfectly equal taxation,' it has again been said, `will remain an unattainable goal as long as laws and government and men are imperfect.'  Id. We recognized in Bright, 27 Ind. at 229-30, that the wants of towns and cities cannot be equal. Some require a higher, and some a lower, rate of taxation. Id.; see also, Robinson v. Schenck, 102 Ind. 307, 1 N.E. 698 (1885). Article 10 simply intended that the uniformity and equality of rate should be co-extensive with the territory to which the tax applies. Bright, 27 Ind. at 229-30. In like fashion, the wants of counties cannot be equal either, thus requiring varying rates of taxation among counties. Even Delegate Read acknowledged the aspirational nature of requiring uniformity and equality by implying that he did not expect the full achievement of absolute and precise exactitude: 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. Comments of Delegate Read (Dec. 3, 1850), Debates in Indiana Convention, 1850, Vol. 1, p. 946. Article 10 does not require that the rate of assessment shall be uniform and equal for all purposes throughout the State; and we think its meaning clearly is that the rate of assessment and taxation must be uniform and equal throughout the locality in which the tax is to be levied. Bright, 27 Ind. at 230. Based on this precept, we are hard pressed to see the constitutional evil in a program involving money from three levels of government that sets the rate of local contribution so that it varies in harmony with expenses for indigent health care in the local area. Pursuant to its broad discretion, the General Assembly properly decided that, for purposes of financing indigent health care, the counties were not similarly situated and varied the tax burden accordingly. We addressed the issue of varying taxes among towns and counties in Kent v. Town of Kentland, 62 Ind. 291, 292 (1878). In that case, we upheld statutes that authorized cities to collect a school tax of persons who lived outside the city limits, if their children were sent to school within the city. We held that this system did not conflict with Article 10, because throughout the state it operated alike on all persons in the same circumstances. Id. at 292. Justice Horace Biddle wrote: We can see nothing unconstitutional in any of these acts. They are uniform and equal in the rate of assessment and taxation, operate throughout the State, and upon all persons in the same circumstances, alike. Of course, the facts upon which these laws act are not equal and uniform, but continually vary; and a municipal law can no more act without facts, than the law of gravitation can act without matter. The laws, by which counties and townships levy and collect taxes for their own use, are uniform and equal, yet the rates of assessment and taxation in one county or township, as compared with another county or township, are not uniform and equal, and may vary from year to year. Those changes in fact do not affect the uniformity and equality of the law. Id. Similarly, in Wright v. House, 188 Ind. 247, 121 N.E. 433 (1919), we found no constitutional violation in a statute requiring the State and counties to share the expense of highway improvements in those counties. There, we stated: The fund to be provided in any county under the provision of the act to pay its part of the costs of the improvement of highways is raised by a general tax on the property of the county levied and collected as other taxes are levied and collected. The fact that the tax rate in counties where extensive improvements are made under the law may be greater than the tax rate in other counties where no improvements are made, or in counties where the improvements thereunder are less extensive, does not signify that the rates of taxation are not uniform within the meaning of the Constitution. Each county is a separate unit for the purpose of taxation, and it cannot be maintained that, within the county making the improvement, the tax levy is unequal. Id. at 437. By contrast to the present scheme of approximate balance between local tax burden and local benefit, Griffin proposes a single state-wide rate the revenue from which would be deployed wherever services were rendered. This would provide a mathematical equality of burden, of course. In light of the historic rule of local finance for local service in this field, we are not persuaded that the Constitution prohibits the legislature from matching burden with benefit.