Court Opinion

ID: 3986690
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:48.866586+00
Date Added: 2024-06-11T07:44:19.995188
License: Public Domain

While I think the permanent writ must be denied because of reasons herein stated, the prevailing opinion fails to decide the real question presented to us. It seems to me this case was brought to us in order that we might rule for the guidance of the Tax Commission in the future. It is quite true, as says the Chief Justice, that it is too late to reallocate the *Page 530 
tax revenues which have already been distributed. County treasurers must make detailed reports of "all moneys paid in redemption of property sold to the county and for assignments of certificates of sale thereof" on the first Monday of March of each year and at such other times as the state auditor may direct. Section 80-10-70, R.S. Utah 1933. This gives the state auditor an account of all delinquent taxes paid in and it seems to me should show the year for which they were levied. The state auditor must "notify the state superintendent [of public instruction] of the actual amount of money in the state treasury to the credit of the state district school fund on the 31st days of December, October and March of each year." Section 75-8-2, R.S. 1933. The statute does not say that the auditor must notify the state superintendent of the aggregate of all delinquent taxes paid on account of the state district school fund for the various years for which they were levied. I think it is one of the minor duties implied in order to carry out the intent of the statute. The state auditor should be able to compile this information from the detailed reports given him by the county treasurers if these latter reports carry that information. The state superintendent of public instruction, after receiving such information from the state auditor, must apportion the fund among the several school districts of the state according to the school population residing in such districts as shown by the last school census lists. It is not expressed in the statute that delinquent taxes included in the moneys in the state treasury be allocated to the school districts according to school population for the years for which the taxes were levied or that they should be credited to the district for the years they were delinquent if the districts did not receive their $25 per capita of school population, but I think that, too, is implied by the statute. I shall attempt to demonstrate this later.
I think the obligation of the county treasurers to keep separate account of the aggregate of delinquently paid taxes for each particular year in which they were levied, transmit *Page 531 
them to the state auditor in such form, the duty of the state auditor to inform the state treasurer of the aggregate amount of delinquent taxes for any particular year accruing to the state district school fund, the duty of the state auditor to notify the state superintendent of public instruction of, not only the total amount of money to be allotted to the school district from the state school district fund, but the aggregate of all delinquent taxes for any particular year making up that total sum, to be all implied from the statute.
The reason I think these duties to be implied arise from what I conceive to be a more major implication of the statute, to wit, that the aggregate of delinquent taxes paid for any particular year from the state school district fund must first be used to make up any shortages in the $25 per pupil in the particular years for which those taxes were collected, and that until those shortages are made up, such aggregates are not available to be included in the amount on hand for calculating, by the tax commission, the amount necessary to be collected by levy in order to make up the current $25 per pupil. I shall illustrate this more plainly when I consider the method of arriving at the levy for current state school district fund. But if I am correct in this fundamental implication arising from the fabric of statutes relating to the levying, collecting, reporting, and allocating of state school district funds, it follows that these officers must keep accounts and transmit the information regarding the aggregate of these delinquent taxes for any particular year as will permit the superintendent of public instruction to allocate those aggregates to the year for which they were collected (not the year in which they were collected) until the $25 per pupil for such years is made up. The accomplishment of this duty depends on the complete chain of functions from the county treasurers through the state auditor and state treasurer to the state superintendent of public instruction, each properly keeping accounts and transmitting information. *Page 532 
I now come to the main point of this case on which every other point depends, viz., whether the tax commission could include, in calculating the levy for this state school district fund, the delinquent taxes which were received for years previous to the year for which the levy is to be calculated or whether those taxes should go to the school districts to make up what they lacked in those years of the $25 per capita of school population. It is of that question which I shall attempt to treat.
I shall restate the problem. I start with the constitutional amendment, section 7, article 13, adopted in 1930, which as far as material to our problem reads as follows:
"The rate of taxation on tangible property shall not exceed * * * such levy for district school purposes which together with the interest on the permanent school fund * * * will raise annually an amount which equals $25.00 for each person of school age in the state as shown by the last preceding school census."
This passage measured the levy for the state school district fund. By chapter 38, Laws of Utah 1931, the Legislature amended section 5998, Comp. Laws 1917, and directed the tax commission in accordance with the then recent mandate of the people, as expressed in the said constitutional amendment, as follows:
"The tax commission is hereby authorized and directed to levy annually a State tax for district school purposes at such rate as will raise an amount, which added to any other State funds available for district school purposes, includes the money covered into the State district school fund on July first last preceding from the proceeds of the income tax Act of 1931 and the franchise tax Act of 1931 as provided in said Acts, equals as nearly as may be twenty-five dollars for each person of school age in the State as shown by the last preceding school census."
The language seems to be a mixture of a formula for annual computation and one for disposition of the revenue derived from the 1931 franchise and income taxes. But it would result in the following calculation: Determine what *Page 533 
was the (1) income from the permanent school fund available to the district school fund. Add to that figure (2) 75 per cent of the revenue received from taxes on income which were collected up to July 1st of the year for which the rate was to be calculated (required by reason of the constitutional amendment to section 3, article 13, passed in 1930). Add to this figure (3) 75 per cent. of the revenue from the corporation franchise tax (required by section 61, chapter 39, Laws Utah 1931). Add to this (4) anyother funds available for district school purposes. The italicized phrase of this formula is the one in question hereafter. Take this total from the sum resulting from multiplying 25 by the number of persons of school age in the state as found during the preceding October. The difference is what must be made up by a levy on tangible state property. That sum is arrived at by taking the valuation of the state property obtained from the assessment returned by the counties and the tax commission and applying such a rate to it as would net the said difference. I think a tolerance factor is figured in for delinquencies and collections, but in the main, the above is the formula by which the levy for any year, including and after 1931, was to be figured. But owing to taxpayers' delinquencies in the school year of 1931-1932, there was a deficiency of $3.39 per child of school age; for the year 1932-33 a deficiency of $4.18 per child of school age; for the year 1933-34 a deficiency of $3.45 per child. From July 1, 1934, to June 30, 1935, when taxpayers were better able to pay, and in response to a campaign by the tax commission, property owners paid in $520,377.24 in delinquent taxes for previous years. And during the state fiscal year from July 1, 1935, to June 30, 1936, a total of $735,448.68. The application does not state what part of these amounts represented back taxes for particular years. The Legislature had given various extensions to delinquent taxpayers. What the tax commission did was to include the sum of $520,377.24 as an item of "other funds available for district school purposes" (item 4 in the formula) in arriving at the levy for the year of 1935 *Page 534 
and include the sum of $735,448.68 as funds available to district school purposes for the year 1936. This, of course, meant a great decrease in the two levies for district school purposes for these years. It is the contention of plaintiffs that when a property owner pays delinquent taxes levied and owing for any back year, that part of the tax payment which is represented by the levy for school district purposes for that year should be allocated to that year because it is only a belated payment of an amount which should have been made during the year of the levy. I cannot see why the reasoning is not sound. If a beneficiary is to obtain from a trust fund income of a certain amount each year and because of delinquencies in the payment of income from investments held by the trust such beneficiary fails to receive such sum, can the trustee in after years keep back payments from the investments to the extent they exceed the amount payable to the beneficiary for the current year? I suppose no one would deny that such trustee must pay such belated income to the beneficiary to make up the amounts he was short in the lean years. I see little difference in principle in the instant case. The result of applying these aggregations of belated tax payments to make up current district school funds is to reduce the amount which the taxpayer must pay for general state purposes. This results as follows: By chapter 63, section 21, Laws Utah 1933, as amended by chapter 20, Laws 1933, 2d Sp. Sess., chapter 92, Laws Utah 1935, it was provided that certain revenues derived from license and sales taxes should be allocated first, up to $2,000,000, to relief direct and in co-operation with the federal government. Any sum above $2,000,000 plus expense of administration was to make up deficiencies in the amount of taxes collected "during the preceding or current year from the levies for district school purposes and for district school equalization purposes." The remainder to be allocated as follows: The first $300,000 or so much thereof as the Governor may find necessary, to make up deficiencies in the general fund to meet appropriations, "Thebalance to be allocated *Page 535 to the state district school fund for the reduction of theproperty tax levy for such purposes." Any balance of the first $2,000,000 not needed for relief also went to reduce the property tax levy for district school purposes.
Thus, it may be seen that if the two large sums above mentioned are not included in the formula for calculating the district school levies for 1935 and 1936, much more of the money from sales and license taxes from those years will be required to go into this fund for those years and thus cut down the amount which may go into the general fund, thus, to that extent, failing to relieve the taxpayer in the levy for general state funds; or by the same token if there is not sufficient available from the sales tax and license revenue fund to fill up the hole which would be left by taking out these two big sums, the district school levy to the general taxpayer would be increased.
I think there is much to be said for the contention of counsel for the plaintiffs, that when the taxes are levied in that year, that part of the total levy represented by the levy for district school purposes immediately attaches for the benefit of the district school fund for that year. When the county treasurer collects it, he holds it as trustee for such district school fund and that by turning it over to the state treasurer, one trustee is substituted for another. Now the fact that some of the tax levied for a particular year is paid in subsequent years does not change the principle.
It is stated by the Attorney General that there is no specific law on the subject; that is, that the law does not specifically state that these belated payments shall be allocated to the years for which they were paid and not to the year in which they were received. This principle that the state school districts are entitled to have the belatedly paid taxes credited to the years for which they were levied up to the point where any deficiency in the $25 per capita of school population is made up, is implied from the act. It is implied in the statutes as they are read all together. The purpose is plain. Perhaps the schools did get along during the *Page 536 
lean years after a fashion by cutting teachers' salaries and other forced economies because they had to, but I do not think that is any reason why this money that belongs to the district schools for those periods should not go to them.
Says the Attorney General, that it would be very difficult to go back over the books of each county and allocate each parcel of these huge sums to each particular year of delinquency and in support he sets out a letter from the state auditor dated August 6, 1936, showing what an insuperable task and what expense it would entail if this court handed down a decision in favor of the plaintiffs. Moreover, if the County Treasurer presents the state auditor with the information suggested herein, and the latter carries it over to the state superintendent, I see nothing insuperable about carrying out the intent of the law. I do not see why this should be permitted to cloud the issue or make wrong law. It is admitted the two large sums above mentioned represent in the aggregate the total amounts of that part of delinquent taxes paid in 1935 and 1936 belonging to the district school fund. It is admitted that the respective shortages for the three school years from 1931 to 1934 were totals amounting to the following, $3.39 multiplied by the number of children of school age taken from the census of October, 1930; $4.18 multiplied by the number of children of school age taken from the census of October, 1931; $3.45 multiplied by the number of children of school age as taken from the census of October, 1932.
They ask only that such part of these funds represented by belatedly paid taxes for these respective years be applied to make up those differences. So much of these funds which were collected for the respective school fiscal years of 1931, 1932 and 1933, together with future funds from delinquencies necessary to make up the shortage in those years, should have been and should in the future be so allocated until that shortage is made up. There has been no shortage under the $25 per pupil since the fiscal year ending June 30, 1934, so there would be nothing to make up after that time. *Page 537 
The Attorney General says no funds are available for allocation. This was because they have been already given to the district school fund, but as a part of their 1935 and 1936 allotment. I hardly think a wrong allocation is a sufficient defense. But the Attorney General states that for 15 years past the funds have been so allocated and no objection was raised. It seems to me this is a serious handicap to plaintiffs' recovery. Certainly, the school districts, or at least the state superintendent of public instruction for them, must or should have taken cognizance of how the levy for 1935 and 1936 was calculated. To stand by and permit the tax commission to follow an undisputed precedent and fix the levy as it did without taking action to test out the question timely, seems to me to smack strongly of laches. It is quite apparent that if we compelled the tax commission to make a reallocation and all the other defendant officers to do those things which they would have to do in consequence thereof, the march of events would finally lead to warrants on the state treasurer which he would not have funds to pay unless as suggested by plaintiffs he pay them out of the funds for general state purposes on the theory that it would be following trust funds due to the district school fund. But granted such could be done that might seriously cripple the state government until such funds could be replaced by levies. These new levies being pyramided would be a severe and unexpected burden on the taxpayer. I think we cannot issue the mandamus when there has been such laches.
For this reason, I concur in the result which orders that the alternative writ of mandamus be recalled and the permanent writ denied. *Page 538