Opinion ID: 1992041
Heading Depth: 1
Heading Rank: 3

Heading: uniformity in tax rates

Text: Swanson's second argument as to how L.B. 839 violates the Constitution of the State of Nebraska is that the common levy results in a nonuniform levy to be assessed against taxable property in school district 31. The prohibition against a nonuniform levy derives from Neb. Const. art. VIII, § 1, as amended in 1992, which states in part: Taxes shall be levied by valuation uniformly and proportionately upon all real property and franchises as defined by the Legislature except as otherwise provided in or permitted by this Constitution. This provision requires a uniform rate of taxation on all real property and franchises within a taxing district. State ex rel. Douglas v. State Board of Equalization and Assm't, 205 Neb. 130, 286 N.W.2d 729 (1979). The parties to this case stipulate that within the Class VI school system, all Class I districts will be taxed at an estimated rate of $1.2096 per $100 assessed valuation under the 1995-96 common levy. Swanson argues that L.B. 839 violates the uniformity clause, irrespective of the fact that the common levy by its very definition taxes all Class I districts at the same rate. This argument derives from Swanson's theory that some Class I districts must support through taxes other districts without any return of benefit. This argument is meritless. The amount of the common levy is computed according to the fair value of all property within the Class VI school system. Within and without each Class I district, the common levy affects each property owner in a Class VI school system equally. Swanson contends that L.B. 839 violates the uniformity clause by indirectly compelling certain property to bear more than its just proportion of the tax requirement. This argument derives from the same reasoning as Swanson's commutation challengethat is, the district where Swanson's property is located putatively receives no benefit for the revenue in excess of its own property tax requirement. As authority, Swanson cites State ex rel. Ahern v. Walsh, 31 Neb. 469, 48 N.W. 263 (1891). Although the disputed property tax in State ex rel. Ahern, had been imposed on all property within a school district to support a school general fund, taxes assessed against only railroad-owned property were diverted from the school general fund and used to fund railroad improvements in other districts. That diversion, of course, required the district to tax nonrailroad property at a level to compensate the loss. In diverting part of the total revenue from the school general fund to the support of other taxing districts and then requiring public compensation, the Legislature had compelled the nonrailroad property to bear more than its share of another district's railroad improvements, thereby violating both the commutation and uniformity clauses of the Nebraska Constitution. State ex rel. Ahern, presented this court with a question quite different from that presented by this case. In State ex rel. Ahern, the lack of uniformity was inherent within one taxing district, wherein some property owners incurred higher rates of taxation than other property owners within the same district in order to support both their own district and a wholly separate district. In this case, the Class I districts in the Class VI school system are part of the same taxing district, and, thus, L.B. 839 does not involve an increased tax imposed on one taxing district to be diverted to another. Therefore, in enacting L.B. 839, the Legislature has not violated the uniformity clause.