Opinion ID: 2226504
Heading Depth: 1
Heading Rank: 3

Heading: net taxes receivable objections

Text: The objector contends that in the 1948 appropriation ordinance the estimate of net taxes receivable from the levies for the years 1942 to 1945 was understated to the extent of $1,281,518.97, that the estimate of net taxes receivable from the levy for the year 1946 was understated by $473,628.18, and that the liability of the levy for 1947 for repayment of tax warrants was overstated to the extent of $528,686.46. Objections based upon these contentions were sustained. Shortly stated, and omitting detail which would confuse rather than clarify, the pertinent facts with respect to all of these contentions are these: The annual appropriation ordinance for each year contains an estimate of losses in tax collections and of the costs of collecting taxes. Each appropriation ordinance contains such an estimate not only for the particular year for which it makes appropriations, but also for the outstanding and uncollected balances of the tax levies of preceding years. The figure originally estimated as the amount of loss and the cost of collection of taxes levied for a particular year is not required to remain constant; it is subject to revision as experience with the actual collection of taxes indicates. ( People ex rel Schlaeger v. Brand, 389 Ill. 298; see People ex rel. Schlaeger v. Bunge Bros. Coal Co. 392 Ill. 153; People ex rel. Schlaeger v. Frankenstein, 396 Ill. 524.) In these cases, which sustain the authority of the city council to revise its estimates of loss and cost, the fact of revision was shown by special summaries contained in the appropriation ordinances. But where the later appropriation ordinance failed to show that the city council had revised its original loss and cost estimates for prior years, it was held that the estimates fixed in the original appropriation ordinances for the respective years involved must stand. People ex rel. Nelson v. Kenneth Court Building Corp, 406 Ill. 357. In the case before us, the 1948 appropriation ordinance used loss and cost estimates which were different from the estimates originally made, but that ordinance failed to show the particulars of the revised estimates. The taxpayer urges that the disposition of this objection is therefore ruled by our decision in the Kenneth Court Building Corporation case. The collector takes the position that the city council did in fact revise its estimates of loss and cost for the prior years' taxes receivable, although the particulars of the revised estimates were not incorporated in the 1948 appropriation and levy ordinances. He contends that these particulars were supplied by an ordinance adopted November 30, 1951, and that the failure of the trial court to consider this amendatory ordinance was error. Subsequent to our decision in People v. Kenneth Court Building Corp. 406 Ill. 357, the legislature authorized the correction of appropriation ordinances by itemizing the deductions which had been made from the amount of taxes collectible so as to show the manner in which the estimate of net taxes receivable had been computed. That statute provides: Whenever the corporate authorities of any municipality with a population of more than 500,000 in any annual appropriation ordinance    stated the estimated amount of net taxes receivable as of the first day of that year without itemizing the amount of taxes    and the deductions prescribed by law, and said corporate authorities ascertained the total amount of appropriations required to be provided for in the tax levy for that year by giving effect to such estimate of net taxes receivable and levied taxes for the amount so ascertained, no part of such tax levy shall be vitiated for failure to specify in detail the amount of each item required to be stated in such appropriation ordinance in arriving at the estimate of said net taxes receivable; provided that the corporate authorities of such municipality before final judgment on objections to the application of the County Collector for judgment and order of sale against real estate for said year shall, by ordinance, correct the statement of the estimated amount of said net taxes receivable by amendment to such appropriation ordinance specifying the amount of taxes    which remains uncollected as of the first day of the fiscal year to which said appropriation ordinance applied   , the amount estimated to cover the loss and cost of collecting said taxes and the amount of principal of all unpaid tax anticipation warrants and all interest accrued thereon and an amount estimated to be sufficient to cover all interest to accrue thereon until redemption of said tax anticipation warrants to show the amount of net taxes receivable as estimated in the annual appropriation ordinance when originally passed. All such tax levies, not in excess of the maximum then authorized to be levied, are legalized and validated. Ill. Rev. Stat. 1951, chap. 24, par. 808b. On November 30, 1951, the city council, acting pursuant to this statutory provision, adopted an ordinance which amended the 1948 appropriation and levy ordinances to show the deductions which had been made from the taxes collectible as of January 1, 1948, in reaching the net amounts of taxes receivable. The net taxes receivable figures stated in the original 1948 ordinance were identical with those stated in the ordinance as amended. The only difference between the 1948 ordinance and the 1951 amendment is that the latter spells out the details of the computations made in reaching net taxes receivable while the former gives only the resulting figures. On its face, the 1951 amendment remedies the defect which was the basis of the objection. To avoid its effect, the objector first argues that the Kenneth Court case involved more than a mere absence of particulars, and that under our decision in that case the failure of the city council to show by the record of its proceedings at the time it passed the 1948 ordinance the details of its revision of the loss and cost estimates applicable to prior years' taxes compels the conclusion that the council adopted the loss and cost estimates made in those years. But the Kenneth Court case rested upon a different ground. There, so far as the record disclosed, the council did not revise its original loss and cost estimates; the argument made by the collector that the estimates had been revised was without proof. The court was required to make the most of the public records and held that the absence of records showing a change in loss and cost estimates indicated that no change was contemplated or made by the council. Since that case the legislature has provided for a method of proving revisions in loss and cost estimates which were actually made. In the case before us we have official action, sanctioned by the legislature, showing affirmatively the existence of the ultimate fact in issue,  that a revision in prior years' loss and cost estimates had been made by the city council in the preparation of its 1948 budget. The objector argues further that while an amendment spelling out particulars is permissible, our decision in People ex rel. Schlaeger v. Buena Vista Building Corp. 396 Ill. 164, makes ineffective an amendment which attempts to validate an illegal tax levy by changing loss and cost figures. This argument, resting on the premise that the 1951 amendment changed the 1948 ordinance loss and cost figures, begs the question. The record shows that both the original ordinance and the amendment state identical amounts of net taxes receivable. The amendment spells out the details of computations, including loss and cost figures, which were employed in determining those receivables in drawing up the 1948 budget. In the Buena Vista case, the amendment sought to delete certain appropriations and to balance the reduction in appropriations by reducing the net taxes receivable. The purpose of the amendment there involved was to change the amounts appropriated. No such purpose exists here. The objector argues that the practice of amendment followed here precludes an attack on the accuracy of reasonableness of loss and cost figures by the taxpayer; that unless special schedules or some similar methods are used to show revisions of those figures, objections such as those in the Bunge case and the Frankenstein case could not be made. We do not agree. The taxpayer can point out that either the gross amount of taxes collectible is understated or that the deductions (including the loss and cost estimates) from that amount are overstated or unreasonably large. Objections Nos. 5, 5B, and 5C, based on this loss and cost argument, were improperly sustained.