Court Opinion

ID: 9709348
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:45:35.085225+00
Date Added: 2024-06-11T18:22:47.942543
License: Public Domain

HANSON, J.
(dissenting). I am unable to concur. The State Board of Equalization is a creature of statute whose powers do not extend beyond those expressly delegated to it. The extent of those powers must, therefore, come from an interpretation and application of our present constitutional and statutory provisions. The laws of the past are helpful in determining their meaning but are not *450controlling as to the legislative intendment of the present. Our tax laws have undergone constant and drastic change since statehood. Our present statutes are but fragmentary bits retained in the culling out process. Companion statutes that once gave a meaning to some of our present laws are no longer in effect. Our constitution too has twice been amended since 1900. Art. XI, § 2, formerly provided that “All taxes to be raised in this state shall be uniform on all real and personal property, according to its value in money, * * *>>_ rp^g amen¿ments thereto in 1912 and 1917 placed emphasis on uniformity and equality of taxation. The constitution now directs that “Taxes shall be uniform on all property of the same class, * *.” It further provides “* ...... the valuation of property for taxation purposes shall never exceed the actual value thereof.” Such provision is a limitation against confiscation of property- — -it is not a standard of either assessment or equalization.
A careful review of our entire statutory tax structure indicates, in my opinion, a clearly defined legislative design to keep separate the functions of “assessment” and “equalization”. The subjects are separately treated in our Code. Different standards govern the application of the two.
The function of assessing property is to place a valuation thereon for purposes of taxation. This requires an intimate knowledge of particular items and parcels of property. It is a process which can only be performed by the local assessor and the local boards familiar with valuations in their respective communities. Our legislature wisely and logically placed the responsibility of assessing and evaluating property upon the local assessor and upon the governing bodies of the local townships, towns, and cities. Their guiding standard it to assess all property at its “full and true value”. That such officials do not always conform to that standard may be judicially recognized. However, there are stringent methods provided in our laws to compel conformance to that standard. That property is not assessed at its full and true value is no basis, or justification, for an equalizing board to assume that function. ■
Under our laws the function of equalizing assessments is vested in the County Boards of Equalization and in the *451State Board of Equalization. The general purpose of “equalization of assessments” is the bringing of the assessments of different parts of a taxing district to the same relative standard so that no one of the parts may be compelled to pay a disproportionate part of the tax. Cooley on Taxation, Vol. 3, § 1195, page 2390.
In performing their function of equalization neither the County Boards nor the State Board are directed or authorized to equalize property according to the standard of “full and true value.” Our statute clearly prescribes a mode or method of equalization to be followed by the State Board. It directs it to “Equalize the assessment of * * * [all real and personal property] by adding to the aggregate value, thereof, in every county in which the board may believe the valuation to be too low, such rate per cent as will raise the same to> its proper proportionate value, and by deducting from the aggregate assessed value thereof, in every county in which the Board may believe the value to be too high, such per cent as will reduce the same to its proper proportionate Value.” SDC 57.0420(1) and (2) combined. The' standard of equalization is thus clearly directed to be “proper proportionate value.” Webster’s New International Dictionary defines the word “proportion” to be “The relation of one portion to another, or to the whole, or of one thing to another, * * * or degree; relative size or magnitude and disposition or arrangement; comparative relation; ratio; as, the proportion of the parts of a building, or of the body.” This is in accord with the historical meaning of the words “equalize” or “equalization”. To “equalize” means to make equal, to cause to correspond, or be alike in amount or degree as compared to something. 14A Words and Phrases, p. 439. It logically follows that in equalizing property in accordance with the standard of “proper proportionate value” the State Board is required to compare valuations throughout the State and to bring all valuations to the same relative level. In the process the high valuations must necessarily have to be lowered and the low valuations must necessarily have to be raised to some relative intermediate level. In doing so the total aggregate assessed valuations of some classes of property, or of some counties, might be increased or decreased to the extent the *452same was reasonably necessary to achieve equitable equalization of all property at its proper proportionate value.
The State Board is necessarily required to find the proper scale of valuation from the abstracts of assessments of the various counties. This places a natural and logical limitation on their power to equalize. To hold otherwise is to grant such Board the unlimited inherent power to assess, in addition to their limited statutory power of equalization. Territory v. Board of Supervisors, 9 Ariz. 405, 84 P. 519.
The State Board of Equalization has no power to increase values, merely for the purpose of raising valuations. As the court stated in the case of Hacker v. Howe, 72 Neb. 385, 101 N.W. 255, at page 260:
“* * * ^gy have authority only to equalize, and to equalize is to adjust difference in value so as to bring all to a common standard, and to the end that all property assessed shall bear its just proportion of the burdens of taxation. Where equalization is the main object, and the increase resulting therefrom is incidental, we think the action is undoubtedly a legitimate exercise of the powers conferred upon the board. If the object appeared to be to raise the aggregate of the total assessed valuation, such action would, in our judgment, have to be condemned as an unwarranted exercise of the authority to equalize.”
The State Board of Equalization generally increased the 1956 assessed valuations on all classes of property in the state. It raised the total aggregate assessed valuation of all property from approximately $1,800,000,000 to $2,500,000,000 —a raise of at least 40 per cent. It substantially raised the total aggregate valuation of all real property, of all personal property, and of every county in the state. No class of real or personal property was lowered. The rates per cent of additions and deductions were largely fractional and not even as required by SDC 57.0420(3). The rate per cent of increases and decreases varied considerably within the same taxing district on the various classes of property.
In my opinion the record of the State Board’s action affirmatively shows that the valuation changes made by it *453were not incidental, or necessary, to an equitable equalization of the assessed valuations. The result of their actions was not equalization of property at its “proper proportionate value.” Instead, it can only result in many cases of overvaluation and aggravation of existing inequalities. It further throws out of balance the percentage ratios of valuations contained in the original assessments thus shifting the burden of taxation from one class of property to another in varying degrees within the same taxing district. The reevaluation of property by the State Board constituted a re-assessment of property in excess of its limited power of equalization.
In considering the powers of the State Board it should be remembered this same body has . the power to levy taxes. The present Board proceeded in the utmost good faith. They merely applied an erroneous standard. However, if such a Board has the unlimited power to revalue property, combined with the power to levy taxes, then certainly and surely they possess the potential power “to destroy”. I cannot believe any legislature ever intended to sire a State Board with such enormous and unrestrained powers from which there is no statutory appeal.