Court Opinion

ID: 9734247
Source: CourtListenerOpinion
Date Created: 2023-08-26 17:29:32.979605+00
Date Added: 2024-06-11T18:26:46.402486
License: Public Domain

*97Loiselle, J.
(dissenting). The issue which threads through this case transcends that discussed in the majority opinion. Although not pinpointed in the complaint, it is implicit as the basis of the plaintiff’s action. This issue is whether a town has the right to accumulate tax revenues when it is not shown that such accumulation is for a public purpose even though there is charter authority to do so.
It is unquestioned that the $639,467.66 surplus was not earmarked for any current or future expenditure and was available for appropriation as of the close of the fiscal year ending August 31, 1976. The town refused to put this general fund amount for appropriation on hand as of August 31, 1976, toward the amount to be raised by taxation for the fiscal year beginning September 1, 1976. Their action, as stated in the majority opinion, was to transfer this sum to a “surplus account” as authorized by the town’s charter. The finding is explicit that this sum “available for appropriation was and is separate and distinct from the Reserve Fund for Capital and Non-Recurring Expenditures” maintained by the town. The finding that the amount of money in question was not for capital or nonrecurring expenditures that might occur in the future and the further fact found that it was transferred to a surplus account certainly is sufficient proof that the amount of money in question was put aside with no purpose other than accumulation. This conclusion is further fortified by the fact that the case was submitted on a stipulation of facts and that neither the stipulation nor the finding made by the court could reasonably support a contrary conclusion, except by guess or speculation.
The power to tax is an incident of the sovereignty of the state. International Harvester Co. v. Wis*98consin Dept. of Taxation, 322 U.S. 435, 444, 64 S. Ct. 1060, 88 L. Ed. 1373 (1944); M’Cullock v. Maryland, 17 U.S. (4 Wheat.) 316, 429, 4 L. Ed. 579 (1819); 71 Am. Jur. 2d, State and Local Taxation §71. “[T]he two elements upon which the power of taxation must rest [are] a public purpose and a public exigency . . . .” 71 Am. Jur. 2d, State and Local Taxation § 77. As to the latter basis, the legislative determination is broad indeed. See Kellems v. Brown, 163 Conn. 478, 313 A.2d 53 (1972), appeal dismissed, 409 U.S. 1099, 93 S. Ct. 911, 34 L. Ed. 2d 678 (1973). As to the first basis, the determination of a public purpose is subject to judicial review. People ex rel. McDavid v. Barrett, 370 Ill. 478, 19 N.E.2d 356 (1939). The tests for determining whether a public purpose is present stem from Loan Association v. Topeka, 87 U.S. (20 Wall) 655, 663, 22 L. Ed. 455 (1874), and this court has used these tests in its own determination of this issue. See Baker v. West Hartford, 89 Conn. 394, 399, 94 A. 283 (1915); Walsh v. Jenks, 135 Conn. 210, 223, 62 A.2d 773 (1948).
“Every definition of Taxation’ expressly or impliedly asserts that it is to be imposed only for public purposes. This is a foundation principle of all constitutional government. ... A republican form of government forbids the raising of taxes for any but public purposes, and under Article Fourth, Section 4, of the Constitution of the United States, Connecticut is forever bound to maintain such form of government, and cannot exercise legislative power inconsistent with it.” Beach v. Bradstreet, 85 Conn. 344, 348, 349, 82 A. 1030 (1912). “A tax is a public burden imposed by law upon the individual for a public purpose.” Cromwell v. Savage, 85 Conn. 376, 377, 82 A. 972 (1912); Hartford v. Connecticut Co., *99107 Conn. 312, 332, 140 A. 734 (1928). It is unquestioned that in this state, taxation may only be imposed for a public purpose and that a cardinal principle of taxation is that taxes may not be levied beyond the needs of government. See Moore v. Langton, 92 R.I. 141, 151-52, 167 A.2d 558 (1961).
Accumulation of tax funds where the only apparent purpose is to accumulate is taxation without a public purpose. “Taxes are levied because they are necessary to defray the expenses of government and not for the purpose of enriching the public treasury. Taxing authorities, therefore, will not be permitted to levy taxes faster than they are likely to be needed. An unnecessary accumulation of money in the public treasury is unjust, impolitic and against the policy of the law.” Cities Service Oil Co. v. Carter, 247 La. 974, 984, 175 So. 2d 288 (1965); People ex rel. Brenza v. Morrison Hotel Corporation, 4 Ill. 2d 542, 547, 123 N.E.2d 488 (1954); People ex rel. Kramer v. Chicago, Burlington & Quincy R. Co., 8 Ill. 2d 382, 387, 134 N.E.2d 335 (1956); 84 C.J.S., Taxation §352 c (3).
Although not specifically or expressly stated, the stipulation of facts and finding indicate that the $639,467.66 was transferred to a surplus account and the defendant builds its whole defense on the basis of the charter right to transfer such monies to a “surplus” account. As this amount was purely an accumulation for no public purpose, it was invalid and beyond the power of the town to do despite charter authorization.
This dissenting opinion is not to be construed as stating that there can be no accumulation of tax monies by a municipality where there is statutory authority to do so for a public purpose that is rea*100sonably anticipated or for sinking funds, or payments of public purpose debts that are to accrue in the future. See General Statutes § 7-389, where specific authority is granted for accumulation of funds to ease the transition of towns to a fiscal year. Such accumulations are for public purposes and would be a valid exercise of the sovereign power to tax. In the instant case, there is no evidence of this. Reduced to the essentials, the town accumulated monies not earmarked for any purpose and put them aside for some undefined future use. I maintain that that is illegal and an abuse by the town of its taxing power.
I respectfully dissent.
In this opinion Cotter, C. J., concurred.