Court Opinion

ID: 9688969
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:14:55.809255+00
Date Added: 2024-06-11T18:18:43.316971
License: Public Domain

YETKA, Justice
(dissenting).
Article X, section 1 of the Minnesota Constitution requires taxes to be “uniform upon the same class of subjects * * Because I find that language to be clear and unambiguous and because all owners of homestead property constitute a single class, I would find that a tax that attempts to assess different homeowners at different rates violates the aforesaid provision.
The history of the adoption of our United States and Minnesota Constitutions reveals that our founding fathers were intent on a written document which defined the powers given to the government by the people. The founders wished to remind future generations that all people have certain inalienable rights; that constitutional documents limited the exercise of power, as well as delegated it; and that those powers not delegated to the government remained with the people. Article X, section I was clearly intended to be a limitation on the power to tax.
You are either a homeowner or you are not. Realistically, it cannot be said that homeowners who are assessed at one rate if their homes are worth $30,000, another at $60,000 and a third if over $60,000 are taxed by laws “uniform upon the same class of subjects.” I think the majority opinion misinterprets this court’s decision in Apartment Operators Ass’n v. City of Minneapolis, 191 Minn. 365, 254 N.W. 443 (1934). That case was decided in the midst of the Great Depression when the legislature felt compelled to limit real estate taxes in order to protect people’s homes. The legislature decided that the value of homesteads up to $4,000 would be assessed at a lower rate, but that all value greater than $4,000 would be assessed as non-homestead property. The legislature has always had the right to define what a homestead is and that’s all it did in Apartment Owners. Any other language was unnecessary to decide that case and is pure dicta. Because of the method used in arriving at assessed valuation and because of the inflation over the past half century, a home with an assessed valuation of $4,000 in 1933 might be equal to a home worth well in excess of $100,000 today. Thus, if the legislature adopted a statute defining a homestead as a home not exceeding $100,-000 and taxed it at a lower rate than other real estate, we would have the situation presented in Apartment Operators.
The pertinent language of the current article X, section 1 was adopted in 1906 in what was then article IX, section 1 of the state constitution. Minn. Const, of 1857, art. IX, § 1 (1906). Prior to 1906, article IX, section 1 provided that taxes be “nearly equal as may be, and all property on which taxes are to be levied shall have a cash valuation and be equalized and uniform throughout the state.” Minn. Const, of *6231857, art. 9, § 1. It is clear that the 1906 amendment gave the legislature greater latitude, but it is also noteworthy that the new amendment retained in the constitution the restriction that taxes should be “uniform upon the same class of subjects.” Clearly, the amendment was not intended to allow the progressive taxation of property. The Sixteenth Amendment to the United States Constitution only became effective in 1913, and, prior to its adoption, it was assumed that a progressive income tax was impermissible. Minnesota itself did not adopt an income tax until 1933. Those drafting the 1906 amendment could not have contemplated taxing real estate in a manner not even then allowed for income.
A property tax is entirely different from an income tax. The latter is, quite rightly, a progressive tax, with both the amount and the rate of the tax rising with income and, thus, the ability to pay. The property tax, on the other hand, is a so-called ad valorem tax, a tax according to value. If a tax of 1% were levied against the value of property, the net tax in dollar amounts might differ on different parcels of land, but the percentage of the tax would still be the same and would be an equal burden according to the property’s value. Therefore, if real estate had a $50,000 value, 1% would yield a $500 tax and a $100,000 parcel of real estate would have a tax of $1,000: The rate is the same, but the burden is based on value.
However, the law which is the subject of this litigation assessed the first $30,000 of property at 17%, the second $30,000 at 19% and all value over $60,000 at 30%. The result could mean a net tax on a $120,000 home would be not just double that of a $60,000 home, but over three times as much. That would be so because the base value against which the mill levy is made rises progressively.
It may be true that there is some overall relationship between the value of a person’s home and his or her ability to pay taxes. However, if the extremes of simple hovels and wealthy mansions were excluded, it is also true that, in very many cases, there is no relationship at all. For some, a home is a luxury on which they lavish a disportionate part of their income and wealth. For others, it is merely a necessity, a place to go to and spend as little time as possible. Two persons could work at the same place of business and have identical incomes; yet, one might own a home worth $30,000 and the other $100,000. Quite naturally, at the same rate of tax, the $100,000 home would pay more, but why should the rate be higher too?
The court, in Apartment Operators, in upholding putting homesteads in two classifications, said: “Placing homesteads in two classes on the basis of valuation was within the scope of the broad power of the legislature to classify property for the purpose of taxation.” Id., 191 Minn. at 370, 254 N.W. at 445. The majority opinion, in a footnote, points out that the legislature has apparently gone back to this two-class scheme, but this does not end the issue. Lund v. County of Hennepin, 403 N.W.2d 617, 618 n. 1, (Minn.1987). If we uphold this scheme of taxation, there is nothing to prevent an even more progressive scheme from being adopted in the future. Envision an even more serious scenario: Suppose the legislature were to decide on a regressive scale, that is, reverse the tax structure here and assess all homes at the rate of 30% on the first $30,000; 19% on the second $30,000 and 17% over $60,000. The deputy attorney general at oral argument, when presented with that question, argued that, while the legislature could tax property progressively, it could not adopt a regressive scale because that would be unfair, unreasonable and perhaps unconstitutional; yet, he could offer no legal authority as to why it would be unconstitutional. In my mind, if the legislature can do the one, it can do the other. The constitution is there to protect all, rich and poor alike, and that is precisely why it was written as it was.
The state argued further that, if the principles of this dissent were to be adopted, the result would be a loss in tax revenues, and should the legislature try to prevent such a loss, an increase in taxes on real estate of lower value would occur while those on expensive real estate would *624decrease. (The state’s argument is one heard more and more frequently in this court and is best illustrated by this syllogism: This court’s decision could have drastic consequences. Drastic consequences do, in fact, follow the court’s decision; ergo, it was the decision of the court that caused the consequences.) The state’s argument is fallacious. It is so, first, because it assumes that the legislature would not be willing to assume a loss in revenue from a tax structure found to be invalid and, second, that there is no other way to reduce real estate taxes than by means of the very complicated tax assessment and classification system adopted in this state.
I will take the unusual step of outlining several things that the legislature can do to reduce the burden on all real estate. I do this not as an undertaking to offer alternative solutions, but simply because I believe that, all too frequently, criticism is directed at the courts for causing problems by its decisions without outlining solutions to those problems. We are reluctant not because we are without ideas, but simply because, in the constitutional scheme of separation of powers, it is the legislative branch which is given the power to tax and appropriate money. However, we are in a position to understand the legal and judicial systems.
In light of the language both in article X, section 1, which is the subject of this litigation, and article I, section 8 of our constitution,1 the legislature might well consider more state funding of the courts and the criminal justice system as a whole. Why should local units of government — many impoverished — pay for the entire cost of public prosecution for crime and the state public defender system? Moreover, why should a poor rural county be expected to pick up the entire cost for prosecuting a notorious criminal merely because the crime was committed in that county? Undoubtedly, similar arguments could be made for public education given the constitutional guarantee of a “general and uniform” system of public schools contained in article XIII, section 1 of our constitution. If the state were to assume greater funding in these areas, all real estate taxes could be reduced.
The majority states that, in this case, relator’s property was taxed at only 4.9% of market value and goes on to hold that that rate of taxation is clearly not excessive. I disagree. I believe it is onerous and unreasonable. Under the present system, relator’s property pays far more for governmental services than other parcels which require more of those same services but pay much less in taxes. Some property owners in this state may pay as little as 1% of market value in real estate taxes. Relator pays five times more. Is that reasonable? Moreover, here, the owner will not only pay the purchase price of his property, but also pay for the property again in the form of taxes in the next 20 years if taxed at his present rate of nearly 5% per year of market value. An owner of real estate who pays more than twice for his property over the life expectancy of the improvements thereon should be found to suffer a burden invoking constitutional concerns.
The other issues dealt with in the majority opinion were not adequately briefed nor argued even though the court specifically called for amicus briefs from a number of organizations. Thus, I do not believe the court’s opinion should be firm precedent thereon.
I believe the taxpayer in this case has a legitimate complaint. If the constitutional phrase, “equal on the same class of subjects,” is to mean anything, let us apply it; otherwise, we will return to those days prior to 1776 when we were a nation not of laws, but of men. The Constitution of the United States and that of the State of Minnesota constitute an island in the fast stream of life — mostly a totalitarian life. I fear that opinions of the courts which do not impose a strict construction of the clauses in the constitutions which protect *625individuals from unreasonable taxation will allow that island of freedom to erode away until it ceases to exist.
Nineteen eighty-seven is the year we celebrate the bicentennial of our United States Constitution. It is also the 130th anniversary of Minnesota’s first constitutional convention in 1857. It should be the year that the rights guaranteed by these constitutions are enhanced. I thus dissent.

. "Every person is entitled to a certain remedy in the laws for all injuries or wrongs which he may receive to his person, property or character, and to obtain justice freely and without purchase, completely and without denial, promptly and without delay, conformable to the laws." Minn. Const, art. I, § 8.