Court Opinion

ID: 9539022
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:45:31.293794+00
Date Added: 2024-06-11T14:58:23.299138
License: Public Domain

STEWART, Justice
(dissenting):
I dissent because, in my view, the Legislature has clearly conferred upon counties the power to impose a franchise tax for revenue purposes. Utah Code Ann., 1953, section 17-5-27, provides that a county “may license for purpose of regulation and revenue all and every kind of business not prohibited by law....” Similar language in the Utah Code dealing with the powers of cities and towns has been uniformly construed to permit cities and towns to impose a license or franchise tax for revenue purposes only. E.g., Mountain States Telephone and Telegraph Co. v. Ogden City, 26 Utah 2d 190, 487 P.2d 849 (1971); Davis v. Ogden City, 117 Utah 315, 215 P.2d 616, 16 A.L.R.2d 1208 (1950); Ogden City v. Crossman, 17 Utah 66, 53 P. 985 (1898).
The basic justification for the Court’s invalidation of the tax in question is the Court’s reliance upon Cache County v. Jensen, 21 Utah 207, 61 P. 303 (1900), which invalidated an occupation tax on the ground, among others, that the predecessor of section 17-5-27 did not delegate power to counties to impose such taxes. In Cache County, this Court held that the term “and revenue” in the statute conferred on counties the power to tax only in an amount sufficient to cover the costs incurred by the issuance of a license to a business. However, the language of the statute on its face does not impose such a limitation.
Since Cache County, this Court has recognized the unsoundness of that ruling with respect to the taxing power of counties and has tacitly overruled that part of the case. A number of cases have cited Cache County since 1900, and only once, in 1908, did this Court cite Cache County for the limitation imposed upon a county’s taxing powers. See Salt Lake City v. Christensen Co., 34 Utah 38, 95 P. 523, 527 (1908). By 1930, that proposition appears only in dissents. See, e.g., Best Food v. Christensen, 75 Utah 392, 285 P. 1001, 1005 (1930) (Straup, J., dissenting).
In 1950, this Court in Davis v. Ogden City, 117 Utah 315, 215 P.2d 616, 16 A.L.R.2d 1208 (1950), finally interred, until today, whatever lingering effect Cache County had. In Davis, the plaintiff argued that under the Cache County rationale a city licensing and revenue ordinance was invalid. In response to that argument, Justice Latimer observed that “it is doubtful whether the language relied on [in Cache County ] by the plaintiff is not dictum for the reason that the important principle announced in that case was that the *120tax was arbitrary and discriminatory.”1 117 Utah at 326, 215 P.2d at 621. The majority opinion does not even cite Davis v. Ogden City.
In my view, it is no answer to argue that the Cache County ruling was in effect adopted by the Legislature when it reenacted that section (with changes in other parts of the statute) some years later. This Court in Davis v. Ogden City apparently did not think that was the case. More recently, we again considered the authority of counties to enact occupation taxes under the same statutory authority in State v. Taylor, Utah, 541 P.2d 1124 (1975). Although the issue was not raised for decision, the Court stated that the ordinance was a revenue measure and referred to section 17-5-27 as the source of the county’s power to enact an occupation tax.
It is true that the Court in State v. Taylor did not refer to Cache County v. Jensen, but neither did it refer to the rejection of Cache County in Davis v. Ogden City. In any event, the Court, on the plain language of the statute, concluded that the Legislature had conferred the power to levy an occupation tax. Sound reasons support that view. The Legislature’s intent was manifest and clear when it first enacted the statute in question. There is no evidence whatsoever that when it reenacted this provision along with other provisions dealing with counties, that it ever focused on, or was even aware of, this Court’s decision in Cache County. It is not without significance that our Legislature has little staff assistance, and no doubt had much less help, if any, when the reenactment of the statute in question was accomplished. The most logical assumption to be made is that when the Legislature revised the statute in question, it did not adopt the Cache County opinion nor take it into account at all. It is a strange notion that if this Court errs in construing a statute, then only the Legislature and not this Court can correct the error, especially when no vested rights are involved.
Furthermore, in my view it is past time for the law dealing with the powers of cities and counties to be freed from the outworn and paralyzing legal dogmas of the past century. Traditionally, the powers conferred on local governmental units have been construed with extraordinary strictness. But, as explained in State v. Hutchinson, Utah, 624 P.2d 1116 (1980), the rule that courts must strictly construe the powers conferred on cities and counties is no longer appropriate. In State v. Hutchinson, we unshackled the police power of local governments from the unrealistic restrictions imposed by the nineteenth century doctrine called Dillon’s Rule. In the instant case, the spirit of Hutchinson ought to be followed, in my view, to remove any doubt as to a taxing power which the Legislature has granted to counties. The fact that cities have long exercised this power is evidence enough that the Legislature is satisfied with the exercise of that power by local governments and that counties ought not to be treated differently. In Hutchinson, we stated in language fully applicable here:
[I]t is not appropriate for this Court to enfeeble local governments on the unjustified assumption that strict construction of delegated powers is necessary to prevent abuse.

In short, we simply do not accept the proposition that local governments are not to be trusted with the full scope of legislatively granted powers to meet the needs of their local constituents.
Id. at 1121. See also Salt Lake City v. Ronnenburg, Utah, 674 P.2d 128 (1983). Accord Tipco Corp. v. City of Billings, Mont., 642 P.2d 1074 (1982); 3 C. Sands & M. Libonati, Local Government Law section 13.05 (1982); 3 Sutherland, Statutes and Statutory Construction section 64.02 (C. Sands rev. 4th ed. 1974). See generally *1212 E. McQuillin, The Law of Municipal Corporations sections 10.18a-10.21, & vol. 6, sections 24.43-24.45 (3d ed. 1979).
Of course, the Legislature must exercise paramount control over the actions of municipalities except where the constitution dictates otherwise. Clearly, cities and counties cannot intrude on or subvert legislative policies, nor may they act in areas requiring a uniform state approach, whether the Legislature has specifically established a policy or not. State v. Hutchinson. However, in truth, state and local governance has become so complicated that the Legislature must, of necessity, rely upon local governmental units to attend to many areas that the Legislature might, in days gone by, have attended to. The Salt Lake County budget is now at a level where it would have exceeded the budget for the entire State of Utah not too many years ago. County governments and city governments deal with momentous decisions that affect the lives of the citizens who are subject to their jurisdiction perhaps more directly than any other level of government, at least in several critical areas. While there can be no doubt that the Legislature has paramount authority over the powers exercised by city and county governments, the relationship ought to be seen as essentially a cooperative relationship rather than an adversarial relationship.
The practical effects of today’s decision are significant. The only alternative that Salt Lake County has to raise additional funds in lieu of the franchise tax at issue, is to increase property taxes in the unincorporated areas for providing essentially municipal-type services. This Court is well aware of the difficulties and hardships, even extreme hardships, that have arisen as a result of escalating property taxes and of the impact which they have had on the average citizen. See generally Rio Algom Corp. v. San Juan County, Utah, 681 P.2d 184 (1984). The inequities of that system of taxation that have become apparent in the past few years will be significantly exacerbated by the Court’s refusal to leave Cache County interred in the grave benignly dug for it by this Court in Davis v. Ogden City.
Finally, every case I have found from other jurisdictions that has dealt with this issue under similar statutory grounds has ruled contrary to the result reached by the majority. See City of Phoenix v. Arizona Sash, Door & Glass Co., 80 Ariz. 100, 293 P.2d 438 (1956); Ex parte Mirande, 73 Cal. 365, 14 P. 888 (1887); City of Bellevue v. Patterson, 16 Wash.App. 386, 556 P.2d 944 (1976), overruled on other grounds, King County v. Algona City, 101 Wash.2d 789, 681 P.2d 1281 (1984). In view of these authorities, the rejection of Cache County by Davis v. Ogden City, and what I think the plain language of section 17-5-27 requires, I dissent.

. In Davis, Cache County v. Jensen is referred to as Matthews v. Jensen. 117 Utah at 325, 215 P.2d at 621.