Court Opinion

ID: 3845991
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:19:42.469178+00
Date Added: 2024-06-11T11:17:24.789916
License: Public Domain

The majority opinion concedes that if the authority undertakes projects that are self-liquidating, "no valid objection to them could be founded upon section 4 of article IX," the debt limiting provision of the Constitution, but reasons that we are here confronted with a project not self-liquidating. It is to be observed that it is the application of this act to the contract to be assumed by the State, rather than the act itself, which they hold unconstitutional as to the instant or analogous facts. I join in their conclusion concerning self-liquidating projects, but I disagree with the majority's conclusion as to the constitutionality of the act as it relates to the facts in this case, and it is to these that the majority opinion must be restricted. It can be extended no further for the court had no other facts before it. Giving to that opinion this effect, it divides projects under the act into two classes: self-liquidating projects wherein the State as such is not obligated to pay the cost under any guise, and other projects where the State as such makes payment of the liquidating cost in whole or part in some fashion. I do not assume that the majority at this time would object to the federal government presenting the State with a project free of charge.
The majority opinion in the instant case concludes that, after the erection of a waterworks for an epileptic hospital, the State obligates itself to pay rent which purchases the plant at the end of thirty years, this causes an incurring of a debt in violation of the Constitution. If so, then the recent decision of this court in Tranter v. Allegheny County Authority, 316 Pa. 65, has met a premature death, for the facts of that case and the logical and necessary conclusions to be drawn from it, present a compelling legal analogy to the instant situation.
The majority opinion admits that the constitutional inhibition as to illegal debts is just as strong against a *Page 463 
municipality, with which we are confronted in the Trenter case, as it is against the State, with which we are here concerned.
I have carefully examined the Act of December 27, 1933, P. L. 114, as it was applied to the contract in the Tranter case and where we held it constitutional. It differs in no essential particular from the Act of June 28, 1935, P. L. 452 and its application to the contract here under consideration. Both acts set up machinery for undertaking the construction of public improvements with the financial assistance of the federal government; the composition of the several boards is immaterial.
Under the contract in the Tranter case we held that the county could constitutionally convey away various existing public improvements to the county authority though some of those improvements were state highways, the property of theState, in actual public use and essential to the life of the community. This authority to convey embraced not merely land but tunnels, bridges and highways. Under neither act are the obligations issued by the authority involved so as to constitute indebtedness of either unit of government. Both contracts require the costs of maintenance and repairs of the projects to be borne by the unit of government involved, although the county in the Tranter case had a much heavier burden as to repairs and maintenance.
Liquidation under the Act of 1933 was through revenues from tolls paid by the public traveling over the completed projects. Under the Act of 1935 liquidation for this one project is to be through rent received from the State for the use of the project.
The majority opinion states that here the Commonwealth would be purchasing a "capital asset" through rents payable over a number of years sufficient in amount to amortize the principal and interest of the bonds to be issued for the cost of construction, and that *Page 464 
the purchase of a capital asset is the creation of a debt prohibited by section 4, of article IX.
In the Tranter case the county was to convey to the authority the property necessary for the various projects and, as the highways belonged to the State, we held it could validly authorize the county to make such conveyance free of charge. This included new projects such as the Duquesne tunnel and also existing projects such as the present Liberty Tubes owned by the State and which cost millions.1 On this property the bonded indebtedness of the authority was fastened and remains as a lien until paid when the project's "capital assets" would again become the property of the State. In that case, as here, capital assets were to be acquired by the State; in both cases the State's property given to the respective authority was put in jeopardy for any default on the bonds. In the Tranter case the tolls and charges were to be used in liquidation of the bonded debt. To that extent it was self-liquidating but this was not the only source of payment. Here, in my judgment, the parallel between the Tranter case and the instant case is definitely established. For the county, in aid of the payment of the bonds through tolls definitely assumed payment of the cost of operation, repair, maintenance, insurance, lighting, sweeping, cleaning, policing, removing snow and ventilating tunnels, and other incidentals without limitation. With, for instance, thousands of automobiles using daily the Liberty Tubes, this cost will run into many, many thousands yearly, to say nothing of other contingencies. All of this in relief of the *Page 465 
bonded indebtedness. It could not be otherwise unless we apply a rule hitherto unknown to business. The county by assuming to pay all the costs attendant on these projects, bridges, tunnels and roads in the Tranter case contributed that much money to the retirement of the bonded indebtedness. The Allegheny improvements were not self-liquidating projects. But this court sustained the assumption of those charges by the county though they arise regularly every year and extend far into the future (1950) and indirectly affect the purchase of a capital asset. Why then may not the State assume to pay a rental charge over a period of thirty years?
We sustained this extraordinary charge or obligation in the Tranter case created by contract because it was within current revenues. In the Allegheny County Authority case2 and the present case the cost or partial cost of the thing to be acquired, be it annual maintenance charge or annual rent, is equally within the normal revenues of the government — in both they are within current expenditures.
The decision in the Tranter case forecloses extended discussion. That the State may make contracts for current needs to be paid out of current revenues is unquestioned. Sufficient authority appears in other opinions filed in this case without restating them here. That the State Colony for Epileptics will require some form of water supply which may be purchased by the State as long as the State Colony for Epileptics continues to exist is also unquestioned. Although it is admitted that an undertaking to meet recurring needs of the community may extend beyond the current fiscal term (Wade *Page 466 
v. Oakmont Boro., 165 Pa. 479; Scranton Electric Co. v. Old Forge Boro., 309 Pa. 73), the majority opinion would outlaw rentals paid, as here, out of current revenues because property given the authority by the State is thereafter returned in improved condition, though the Tranter case sustained similar obligations from current revenues with like results. In both cases corporations were created. In the Tranter case the authority sold its service to the public that used the facilities. In the instant case, the authority sold its service (water supply) to its only customer, the State. Had the state authority agreement provided for the same payment for service without return of the property given by the State it would weather the storm.3
A presumption of constitutionality ordinarily attends the acts of the legislature. The burden of proving illegality beyond a doubt is upon that person who alleges it (Rettinger v. School Board of City of Pgh., 266 Pa. 67), and there is nothing to show the expenditure of $2,000 a year will overstep the limits of the State's unexpended current revenue. To assume that it will do so is simply to seek a means to strike down legislation. The Commonwealth is entitled to the presumption that the sums provided by this lease were within current revenues. The obligations of the county in the Tranter case run to 1950. It is a heavy obligation, and one which the federal government may specifically enforce. I believed then, as I do now, that so long as these outlays do not exceed annual current revenues no debt within the constitutional sense is created. Petitioners having failed to demonstrate that in this case these expenditures would exceed current revenues that have been appropriated, the court is bound to presume that they are within them.
I can view the majority opinion in no other light than that the Tranter case is overruled; to hold that what *Page 467 
was done there cannot be done here is to deny to the Tranter case its force and effect.
1 The projects mentioned were: 1. Pittsburgh-Homestead High Level Bridge. 2. Highland Park Bridge and approaches. 3. Fort Duquesne Bridge and Tunnel. 4. River Front Improvements. 5. The existing Liberty Tubes. 6. Glenwood Bridge and approaches. 7. Dravosburg Bridge and approaches. 8. Jerome Street Bridge and approaches. 9. Rankin Bridge and approaches. 10. Banksville Road. 11. Saw Mill Run Boulevard. 12. Jerome Street Improvement.
2 In the Tranter case the defendant's paper books (no doubt those referred to in the opinion) stated, "the defendant is informed that the plaintiff will formally concede that the cost to the county of performing such agreement will be well within its annual current revenues."
In the present case, as has been noted, current revenue exceeds by $10,000,000 that which was estimated for the present biennium.
3 Wade v. Oakmont, 165 Pa. 479; Scranton Electric Co. v. Old Forge, 309 Pa. 73.