Opinion ID: 2131483
Heading Depth: 3
Heading Rank: 2

Heading: The purpose of the tax must be one which pertains to the public purpose of the district within which the tax is to be levied and raised.[8]

Text: That education in the public schools is a public, not a private purpose, is conceded, and no more need be said. The heart of the majority opinion is that the negative aids law violates the second part of the rule. The majority contends that the law compels one school district to levy and collect a tax for the direct benefit of other school districts, or for the sole benefit of the state in violation of art. VIII, sec. 1, Wis. Const. As one can see from the holding of the majority and from the cases following, the rule that taxes must be spent at the level at which they are raised means only that there must be some correspondence between the taxing district or districts upon whom the burden of a given tax rests and the district or districts thought to be benefited by the expenditure of the proceeds. One taxing district cannot be taxed for the sole benefit of another taxing district. [9] This court has said `there can be no legitimate taxation unless for the uses of the government' levying it. [10] The public purpose limitation upon the tax power is not an arbitrary rule governing legislative power but is a doctrine of fairness whose purpose is to prevent fundamentally unjust and unfair exactions. The limited function of the judiciary in this regard must be kept firmly in mind, lest dicta and language used in prior cases be applied as if they and not the constitutional and inherent limitations on the legislature were the source of the doctrines to be applied. An analysis of the cases and the application of the rule to the specific fact situations will show that the negative aids legislation violates neither the public purpose rule nor this court's prior decisions. Lund v. Chippewa County, 93 Wis. 640, 67 N.W. 927 (1896), and State ex rel. Board of Education of City of Oshkosh v. Haben, 22 Wis. 629 () (1868), are cited by the majority for the rule the state could not require one or more counties of the state, less than the whole, to support a state institution. [11] A similar case was State ex rel. McCurdy v. Tappan, 29 Wis. 664 (1872), in which the court held that the state could not require Oshkosh to raise funds for furnishing soldiers to the United States Army. The act was invalid on two grounds: (1) it singled out one municipality; and (2) furnishing bounties to volunteers was not a municipal purpose. Thus the act violated the uniformity clause and the constitutional requirement (art. VII, sec. 2) that the legislature establish but one system of town and county government which shall be as nearly uniform as practicable. One of the purposes of the uniformity clause, said our court, was to protect the taxpayers in any particular county or town from being compelled by the legislature without their consent to bear burdens in respect to matters not strictly municipal which other counties or towns are not required to bear. Tappan, supra, at p. 679. Thus the proposition for which Lund, Haben and Tappan stand is that the state shall not use its power to impose a tax on one local governmentrather than all local governmentsfor state purposes without the consent of the local entity. The imposition of an extra tax burden solely on taxpayers of one unit was declared invalid. The rule established was that all local unitsall taxpayersshould make a contribution to support the state purpose. The negative aid law in question here applies across the state to all school districts. No one school district is singled out to support another school district or state education. Thus the negative aids legislation is substantially different from the statutes in the cases cited by the majority, and the application of those cases to our question is therefore questionable. However, it is important to note that the negative aids law does not contravene the quoted black-letter doctrines set forth in these cases. No taxpayer is relieved of his proportional contribution to the support of education. The goal of the legislation is that all Wisconsin taxpayers shall contribute their fair share to the support of public education, and all will be, relative to any given spending level, equally burdened. The fact that the result of the negative aid provision will be that some but not all districts will pay negative aid is not grounds for its invalidation. The rules governing aid payments apply to all school districts alike which meet the terms and conditions of the statute. Cf. Joint School Districts v. Sosalla, 3 Wis.2d 410, 420, 88 N.W.2d 357 (1957); Columbia Co. v. Wisconsin Retirement Fund, 17 Wis.2d 310, 322, 116 N.W.2d 142 (1962); West v. Tax Commission, 207 Wis. 557, 564, 242 N.W. 165 (1932). Accordingly, we conclude that the statute before us meets the test set forth by these cases that the state not require one local unit to support a state institution or purpose. The next issue is whether the legislature is requiring the local school districts to raise and expend funds for a purpose which is not germane to the local school district in violation of the public purpose doctrine. [12] The question is, therefore, narrowed to a single point: Is the purpose in this instance a public onedoes it concern the common welfare and interest of the municipality? Brodhead v. Milwaukee, 19 Wis. 658 (), 689 () (1865). The majority opinion assumes without any discussionthat a payment by a school district to the state for redistribution for education is not germane to any purpose of the school district making the payment. However, the Lund and Haben cases recognize the power of the local unit to raise funds for a state purpose. A local government raising funds for a state purpose does not violate the uniformity clause or public purpose doctrineif it can be shown that the unit also has an interest in the state purpose. That expenditures are made outside the district do not render the appropriation invalid because such expenditures may still be a valid school district purpose. [13] In Sharpless v. Mayor of Philadelphia, 21 Pa. 147, 171, 172 (1853), a case relied upon by the majority, the court noted that the right of a local unit to fund public works was not confined to those works within the geographical unit whose people were taxed. The determinative factor is not the geographical location of the expenditure but the interest of the local unit and its people. The Pennsylvania court set forth the test as follows: . . . Local taxes for local purposes, and general taxes only for purposes which concern the whole state, are a vital principle of our political system, and there is no feature in it which has attracted more unqualified admiration from those who understand it best. Its justice is too obvious to need explanation. . . . The city's charter was granted by the legislature. It may be enlarged. The same power which gave them the privileges which they have, may give them others. It cannot be so enlarged as to enable the corporate authorities to embark the city in a private business, or to make the people pay for a thing in which they have no interest. But within these limits there is nothing to prevent an indefinite extension of their corporate powers. But it is insisted that the right of a city or county to aid in the construction of public works, must be confined to those works which are within the locality whose people are to be taxed for them. The Water-Gap Company stops its road north of Vine street, outside of the city limits, and the Hempfield road has its eastern terminus at Greensburg, three hundred and forty-six miles west of Philadelphia. I have already said that it is the interest of the city which determines the right to tax her people. That interest does not necessarily depend on the mere location of the road. Therefore the location cannot be an infallible criterion. . . . A railroad may run through a county without doing its inhabitants the least service. May such a county assist to make it, while a city which it supplies with bread and whose trade is doubled by it must not do so, merely because it ends outside of an imaginary line that limits the corporate jurisdiction? It seems very plain that a city may have exactly the same interest in a road which terminates outside of her borders, as if the depot were within them, and a great deal more than if it passed quite through. If she has an interest in any part, she has probably an equal interest in every part. (pp. 171-172) Even if there is a national or state interest, the courts have recognized that there can also be a local interest which the local unit has in common with the whole state sufficient to sustain or authorize the local tax. In Sharpless the court decided that the city had a special local interest in the improvements outside the city limits. In Brodhead, supra, at p. 674 (-), it was argued that Milwaukee has no obligation to pay soldiers who entered the service of the United States. They are not the soldiers of Milwaukee, but of the nation . . . . In what view, then, will taxation to pay these bounties be justified? Is its object to fill up the national armies and put down rebellion? This is not a matter of local or municipal duty or concern. This court upheld the law finding a municipal purpose although national and state interests were present. These cases support the rule that a local interest, even one which a local unit has in common with the state, is sufficient to justify local taxation. The courts have repeatedly said that if the local unit has any such local interest, then the question of taxation is for the legislature and not for the courts. In Brodhead (p. 686, ) this court said: . . . The objects for which money is raised by taxation must be public, and such as subserve the common interest and well being of the community required to contribute. To justify the court in arresting the proceedings and declaring the tax void, the absence of all possible public interest in the purposes for which the funds are raised must be clear and palpableso clear and palpable as to be perceptible by every mind at first blush. In Sharpless, supra (p. 172), the Pennsylvania court similarly gave great weight to the legislative determination if one could find any special local purpose. But it is not our business to determine what amount of interest Philadelphia has in either of these improvements. That has been settled by her own officers, and by the legislature. For us it is enough to know that the city may have a public interest in them, and that there is not a palpable and clear absence of all possible interest perceptible by every mind at the first blush. All beyond that is a question of expediency, not of law, much less of constitutional law. If the majority (and petitioner) are saying that the payments to the state are invalid because property receiving no direct benefit from a tax for a particular purpose should not be taxed for that purpose, this position is not defensible. A citizen must pay a proportion of a school tax although he or she has no children. As Cooley on Taxes so aptly states: No system of taxation has yet been devised which will return precisely the same measure of benefit to each taxpayer or class of taxpayers in proportion to payment made, as will be returned to every other individual or class paying a given tax; and it follows that neither the federal nor state courts have power to revise the taxing system of a state for the purpose of attempting to produce a more just distribution of the burdens of taxation than that arrived at by the legislature. (Sec. 89, p. 216) The question then is whether there is a local public purpose which rationally justifies the legislative enactment requiring the local school districts to return some revenues raised by school taxes to the state. [14]