Court Opinion

ID: 9705892
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:25:32.675796+00
Date Added: 2024-06-11T15:26:11.124768
License: Public Domain

HUNTER, Justice,
dissenting.
It is with grave concern that I respectfully dissent from the majority opinion. I believe their interpretation of Article XIII, section 1, is incorrect and is not consistent with the rationale of previous cases of this Court,. I would affirm the trial court's finding that the bond issue in this case is not an "indebtedness" that falls within the limitations of our Constitution.
This Court has considered Article XIII, section 1, on several previous occasions and has consistently been guided by the well settled principles that phrases and sections must be considered in their entirety and the Court cannot be guided solely by the meaning of a word standing alone. Allen v. Van Buren Township, (1962) 243 Ind. 665, 673, 184 N.E.2d 25, (the word "value" was held to mean the "assessed value" of the property); City of Valparaiso et al. v. Gardner, (1884) 97 Ind. 1, 15 (the term "indebtedness" does not include obligations under contracts for necessary city services).
The majority in this case has looked at the phrase "indebted in any manner" and found that there is such a clear meaning to those words that it is not necessary to consider any of the context in which the phrase is found. I do not agree. This Court rejected that argument over one hundred years ago when it held that the word "debt" could not be said to have a firmly settled meaning. City of Valparaiso, 97 Ind. at 6. We have continually rejected a narrow interpretation of Article XIII, seetion 1, as we stated in Lurie v. City of Indianapolis, (1964) 245 Ind. 457, 199 N.E.2d 699:
"Fortunately the well-reasoned opinions of most Indiana decisions for many years have refused to extend the meaning of the debt limitation provision of the Indiana Constitution to prohibit the creation of new political subdivisions or the financing of local public improvements by bond issues paid for by assessments or special taxes. The common law imposed no debt limitation whatever, and we should not at this late date attempt to turn the clock backward by engrafting additional words into the debt limitation provision of the Indiana Constitution to make it more restrictive than at the time of its enactment."
Lurie v. City of Indianapolis, 199 N.E.2d at 699 (Supplemental Footnote). See also South Bend Public Transportation Corp. v. City of South Bend, (1981) Ind., 428 N.E.2d 217; Hawkins v. City of Greenfield, (1967) 248 Ind. 593, 230 N.E.2d 396.
Clearly, it is the constitutional sense of the word "indebtedness" which we must determine. To do this, we must look carefully at the entire context in which the word is used. Article XIII, section 1, is in fact a single sentence which covers two subject matters, a debt limit and a debt prohibition with an escape clause from the debt limit. Both subjects are drawn solely with respect to ad valorem property taxes. The debt is limited to two percent of the value of the taxable property. This debt *69limit is not stated in terms of a percentage of all tax revenues or other similar general terms, but is clearly stated to be based upon a percentage of property tax revenues. Furthermore, the debt limit can be avoided only through a petition of a majority of property owners in number and val-we. This eseape clause is also firmly related to property taxes. This relationship of both the escape clause'and debt limit to property taxes is very explicit and direct and since the debt prohibition is within the same sentence it is obvious that there was an intended relationship among the nature of the debt, the limitation of the debt and the debt escape provision. Rather than ignoring the nature of the debt limit in construing the phrase "indebted in any manner" and ignoring the debt escape provision, this Court should construe "indebted" in the context of how the debt is limited and how that debt limit can be escaped.
It is then clear that "indebted" encompasses only those obligations which look to general ad valorem property taxes for retirement and not obligations which are to be retired by excise taxes.1
I see no merit to the argument that the total assessed property value was chosen as the means of limitation because it was the only fixed and stable measure of the wealth of a municipal corporation. There is a wide variety of measures which are used by other states for debt limits, including revenues for the current fiscal year, a total of the income and revenue for a current year, and a flat dollar amount. Thus, the use of a debt limit based upon property values is a clear indication that the term "indebtedness" refers solely to debts which are payable from ad valorem property taxes.
Similarly, the debt escape provision is specifically related to the ad valorem tax since it is the majority of property owners "in number and value" who must vote in favor of exercising the escape provision. The intent here is clearly that the property taxpayers who actually paid the majority of the property taxes would determine whether or not to use the escape provision. Thus, this provision is related explicitly and directly to property taxes.
I believe the meaning of Article XIII, section 1, is clear when the section is read and considered as a whole and the debt which is limited is debt which is to be retired by the general ad valorem property taxes and not debt to be retired by excise taxes. I do not believe this interpretation would remove all restrictions on the indebtedness of a local governmental unit as the majority contends. The necessity of financing public improvements in an equitable manner will always be a matter of concern for our legislators. At some point, they may decide to place a cap on the amount of excise taxes which can be imposed by a given municipality. Our Constitution, as it now stands, does place a cap on the amount of debt to be repaid from ad valorem property taxes and does help shift the tax burden to the members of the pub-lie who most directly benefit from a public improvement rather than throw all of the burden on property owners who pay the ad valorem property taxes in a particular area. This Court is not called upon to make a policy decision as to whether there should be an absolute debt prohibition for municipalities and counties as there is for the state under Article X, section 5. The issue for this Court is the meaning of Arti*70cle XIII, section 1, as it is considered in its entirety.
I agree with the trial court's finding here that case law from other jurisdictions also supports the conclusion that this section refers to debts which are to be retired out of property taxes. It is true that the cases in other jurisdictions are divided as to whether or not their own constitutional debt limits include only debts to be retired from ad valorem property taxes and not debts to be retired by excise taxes. However, the key point in analyzing these cases is that each court carefully considered the specific constitutional provisions which were applicable and found that when a particular constitution limited debt in terms of a percentage of assessed values for ad valorem property tax purposes and had an approval or escape provision conditioned on a voter qualification of those paying property taxes or owning property, that constitutional provision was held not to encompass a debt to be retired solely by excise taxes. City of Phoenix v. Phoenix Civic Center, (1966) 100 Ariz. 101, 412 P.2d 43; Switzer v. City of Phoenix, (1959) 86 Ariz. 121, 341 P.2d 427; Cottingham v. State Board of Examiners, (1958) 134 Mont. 1, 328 P.2d 907; Banner v. City of Laramie, (1955) 74 Wyo. 429, 289 P.2d 922; State v. Connelly, (1935) 39 N.M. 312, 46 P.2d 1097.
While several jurisdictions have reached the result that the debt limits in their constitutions do include debts to be retired by excise taxes, their decisions are always the result of their constitutional provisions lacking a clear indication that the prohibit ed debts were tied to ad valorem property taxes.
Some states have specifically differentiated between state debt limit provisions and municipal debt limit provisions, and Montana has even reversed its position as to the type of debts which were subject to the debt limitation, but all of these cases are based upon a consideration of the specific constitutional provisions which apply.
In Wyoming, the court has expressly differentiated the state debt limit provision from the municipal debt limit provision and held that a debt to be retired by excise taxes is within the state debt limit but is not within the municipal debt limit. Wit zenburger v. State, (Wyo.1978) 575 P.2d 1100. The court, there, found no special voter qualification clause in either debt limit provision and had to consider other factors. The Montana Supreme Court did subsequently change the holding of Cotting-ham but only after the requirement of voter approval encompassing only those on the property taxpaying rolls was found to be unconstitutional. There was then no provision in the Montana constitution which tied the debt limit to ad valorem property taxes. State v. Anderson, (1971) 158 Mont. 279, 491 P.2d 868.
In summary, I can find no cases from other jurisdictions which are inconsistent with my analysis that when there are specific provisions that a debt limit is based upon a percent of property tax revenues as well as an escape clause with voter qualification limited to property taxpayers, then the debt prohibited or limited is one to be retired by ad valorem property taxes.2 The case law from other jurisdictions supports my conclusion that the authors of our Constitution intended not to overburden property taxpayers by limiting the amount of debt that could be incurred which was to be repaid out of ad valorem property taxes.
In this case, the bonds are to be repaid entirely from the special Fund set up by the CIB gand the operating revenues of the expanded Indianapolis Convention Center and Hoosier Dome. There is no obligation or liability of the general credit of the state or of any municipality, and resort may not be had to ad valorem property taxes. In my judgment, the authors of Article XIII, section 1, were principally concerned with the protection of the general taxpayers and particularly their property from onerous *71financial obligations. The use of excise taxes limited to specific and related projects clearly falls outside the intended parameters of the constitutional sense of "debt."
I believe the majority commits grievous error and seriously hampers the ability of the municipalities of this state to cope with the realities of the financial world and at the same time provide the necessary facilities to attract new residents and industries. I agree with the trial court that the new bonds of the Capital Improvement Board are not a debt within the seope of Article XIII, section 1, and are not properly attributable to the total bonding limitation on Marion County.
I would affirm the judgment of the trial court.
DeBRULER, J., concurs.

. Another similar Indiana constitutional provision has been limited solely to ad valorem property taxes. The original 1851 version of Article X, Section 1, provided:
"The General Assembly shall provide by law, for a uniform and equal rate of assessment and taxation; and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, excepting only a municipal, educational, literary, scientific, religious, or charitable purpose, as may be specifically exempted by law."
In spite of the general reference in Article X, Section 1, to "taxation," this Court has uniformly limited this Article to ad valorem property taxes due to the context of the word "taxation." See Lutz v. Arnold, (1935) 208 Ind. 480, 193 N.E. 840, 849; Gafill v. Bracken, (1924) 195 Ind. 551, 145 N.E. 312; and Thomasson v. State, (1860) 15 Ind. 449, 451.

. One court did apparently rule contrary to my present interpretation but did not analyze its own constitutional provisions and so cannot be said to be authority either in support or opposition to my position. City of Trinidad v. Haxby, (1957) 136 Colo. 168, 315 P.2d 204.