Court Opinion

ID: 3494476
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:02:27.778674+00
Date Added: 2024-06-11T14:05:11.346637
License: Public Domain

The school district of the city of Lansing consists of the territory within the corporate limits of the city of Lansing together with a portion of Lansing township which is east of the city. The area of the school district outside of the city is approximately 588 acres.
In 1932, article 10, § 21 of the State Constitution was adopted. This amendment is commonly known as the 15-mill amendment. The city of Lansing, a home-rule city, not having voted to come within the limitations of the constitutional amendment above referred to, the property therein was not limited to a total tax of 15 mills. Property within the township of Lansing was so limited. As a result of the above amendment the school district of the city of Lansing would be limited by the 15-mill amendment. To meet such situations, the legislature enacted Act No. 162, Pub. Acts 1933 (Comp. Laws Supp. 1940, § 3551-41 et seq., Stat. Ann. § 15.511 et seq.), which reads in part as follows:
"SEC. 2. * * * In the case of any school district lying partly within and partly without the limits of a municipal corporation the following procedure shall be observed: The commission shall find, *Page 569 
in accordance with the provisions of the property tax limitation act the maximum tax rate which may be levied against all of the property lying within such school district. Such tax rate is hereinafter referred to as the `regular tax rate.' Thereafter the commission shall find the maximum additional tax rate which fairly and reasonably is equivalent to and represents the additional annual value to the property lying within the boundaries of the municipal corporation resulting from the greater proximity of the school buildings and facilities to such property and the greater accessibility thereof, and not already reflected in assessed valuations. In no case shall the additional tax rate be such as to increase beyond the net limitation tax rate the total of all taxes levied against property within the limits of such municipal corporation, exclusive of rates levied for the payment of interest and principal on obligations incurred prior to December eight, nineteen hundred thirty-two, and rates levied pursuant to the provisions of the charter of such municipal corporation. The findings and order of the commission made and entered concerning the maximum tax rates of such school district shall specify both the maximum regular tax rate and the maximum additional tax rate computed as aforesaid.
"SEC. 3. * * * The findings of the commission on questions of fact as to the fairness and reasonableness of the additional tax rates shall be conclusive.
"SEC. 4. * * * The board of education of any school district for which the commission has found and ordered an additional tax rate as hereinbefore provided is hereby empowered to levy such additional tax rate upon the property of the district lying within the municipal corporation, such levy to be in addition to the regular tax rate which is permitted to be levied upon all of the property of such district, both that lying within such municipal corporation, and that lying outside thereof. Such additional rate *Page 570 
shall be certified to the proper officers of the municipal corporation at the same time as the regular rate is certified, and such additional rate shall be assessed, levied, collected and returned in the same manner as the taxes of the municipal corporation are assessed, levied, collected and returned."
The Ingham county tax allocation board found the maximum tax rate of 8.10 mills, which was designated as the regular tax rate, might be levied by the school district upon property lying within the entire school district on the 1944 tax roll for the year 1945. Thereafter, the tax board found the maximum additional tax rate of 2.5 mills might be levied by the school district against property lying within the city of Lansing only. The board of education of the school district by virtue of the above act levied an additional tax rate of 2.5 mills upon the property lying within the city as authorized by the Ingham county tax allocation board.
Plaintiff as a resident and taxpayer of the city of Lansing paid the additional tax under protest and applied to the city council for a refund as required by city charter. His petition was denied. He brings the present action in assumpsit for recovery of the amount of tax paid under protest. The trial judge held Act No. 162, Pub. Acts 1933, constitutional and rendered judgment in favor of defendants.
Plaintiff appeals and urges that the act in question is unconstitutional as it contravenes article 10, § 3 of the Michigan Constitution (1908), which provides:
"The legislature shall provide by law a uniform rule of taxation, except on property paying specific taxes, and taxes shall be levied on such property as shall be prescribed by law:Provided, That the legislature shall provide by law a uniform rule of *Page 571 
taxation for such property as shall be assessed by the State board of assessors, and the rate of taxation on such property shall be the rate which the State board of assessors shall ascertain and determine is the average rate levied upon other property upon which ad valorem taxes are assessed for State, county, township, school and municipal purposes."
Plaintiff also contends that the act is unconstitutional as it permits double taxation on the same property for the same purpose.
Defendants urge that in the enactment of the quoted legislation, the legislature created two taxing units and provided for uniformity within each taxing unit; that the creation of taxing districts is committed to the discretion of the legislature and two taxing districts may be created within one municipality without violation of the principle of uniformity; and that the legislature may provide for a reasonable classification of property for purposes of an ad valorem tax without violating the uniformity rule of the State Constitution or the equal protection provision of the Federal Constitution.
In coming to our conclusions in this cause, we shall keep in mind that the provision in the Constitution relating to a uniform rule of taxation cannot be repealed or amended directly or indirectly by the legislature, nor can it be set aside by the courts; that school districts are specifically recognized in the Constitution and must be continued (Const. 1908 art. 9, § 8); and that the rule of uniformity forbids double taxation.
Defendant school district urges that the creation of taxing districts is a subject committed to the discretion of the legislature and two taxing districts may be created within one municipality without violation of the principle of uniformity. In support of this claim defendant cites Pioneer Iron Co. v.City *Page 572 of Negaunee, 116 Mich. 430, and Mitchell v. City ofNegaunee, 113 Mich. 359 (38 L.R.A. 157, 67 Am. St. Rep. 468).
In the Mitchell Case, supra, plaintiffs were the owners of unimproved lands within the corporate limits of the city of Negaunee. They sought to enjoin the city from carrying out a contract which it had entered into for the erection of an electric lighting plant. Plaintiffs there contended that the taxing district in which the tax may be levied should be limited to the locality which is to be benefited by the expenditure of the tax and that their land would not be benefited by the erection of such a plant, they should not be taxed for the same. We there held that the fixing of city limits and taxing districts is within legislative discretion and the determination of the legislature in relation thereto will not be disturbed by the courts. Plaintiffs were denied relief. This case does not support defendants' theory that a school district may have two taxing units.
In the Pioneer Iron Company Case, supra, a bill of complaint was filed to restrain the collection of taxes by the city upon the theory that the assessment was made against the lands as mineral lands instead of wild lands. This court denied relief and reaffirmed its holding in the Mitchell Case to the effect that the establishment of a taxing district is within legislative discretion. This case is not authority for the claim made by defendants.
Defendants also rely upon Callam v. City of Saginaw,50 Mich. 7, and Smith v. Mayor and Common Council of the City ofSaginaw, 81 Mich. 123. In the Callam Case the city of Saginaw by legislative act was authorized to bear the entire expense of erecting a county court house. In the above case the local act under which the court house was erected provided that in case the county seat should be removed *Page 573 
from the city, the county was required to pay to the city the amount expended for the construction of the building. In the case at bar, the schoolhouses in the city of Lansing are the property of the school district of the city of Lansing. The act in question makes no provision whereby the city of Lansing could be reimbursed in the event of a dissolution of the school district.
In the Smith Case the cities of Saginaw and East Saginaw were consolidated and each former city was retained as a tax district, but only for the purpose of local improvements, such as sewers, sidewalks, ditches, waterworks and street improvements. This case is readily distinguished from the case at bar. In a school district a schoolhouse cannot be termed a local improvement. It is built for the use of the people in the entire district.
In Huron-Clinton Metropolitan Authority v. Boards ofSupervisors of Five Counties, 304 Mich. 328, we said:
"A constitutional provision requiring a uniform rule of taxation was considered in the case of Exchange Bank ofColumbus v. Hines, 3 Ohio St. 1. The court said, p. 15:
"`What is meant by the words "taxing by a uniform rule?" And to what is the rule applied by the Constitution? No language in the Constitution, perhaps, is more important than this; and to accomplish the beneficial purposes intended, it is essential that they should be truly interpreted, and correctly applied. "Taxing" is required to be "by a uniform rule;" that is, by one and the same unvarying standard. Taxing by a uniform rule requires uniformity not only in the rate of taxation, but also uniformity in the mode of the assessment upon the taxable valuation. Uniformity in taxing implies equality in the burden of taxation; and this equality of burden cannot exist without uniformity *Page 574 
in the mode of the assessment, as well as in the rate of taxation. But this is not all. The uniformity must be coextensive with the territory to which it applies. If a State tax, it must be uniform over all the State; if a county, town, or city tax, it must be uniform throughout the extent of the territory to which it is applicable.'"
In Simmons v. Ericson, 54 S.D. 429 (223 N.W. 342), the legislature passed an act authorizing a regular school tax and an additional tax upon that portion of the district represented by the city portion of the school district. The act provided for a limitation on the levy on agricultural lands to 10 mills on the dollar of assessed valuation, while other lands within the district could be taxed 25 mills on the dollar. The supreme court of South Dakota held that "the tax levy be extended at the same rate for all purposes upon all taxable property within the district." In its opinion the court said:
"We are unable to see any difference which furnishes a reasonable ground for making a distinction between the rate of taxation for school purposes upon agricultural lands and that upon other real estate within the same school district. * * * We think the placing of agricultural lands within the school district in a different class than that of other real estate is not based on differences in the character of the property which furnish a reasonable ground for making a distinction between the two classes, and that it really results in permitting agricultural land to escape a burden imposed on other real estate situated in substantially similar circumstances and conditions, and that the limitation of 10 mills on the dollar in the case of agricultural land while the levy on other real estate may be 25 mills on the dollar contravenes that provision of the Constitution that taxes shall be uniform on all property *Page 575 
of the same class. In Monaghan v. Lewis, 5 Pennewill (21 Del.), 218 (59 A. 948, 10 Ann. Cas. 1048), under a constitutional provision requiring taxes to be uniform on all property of the same class, an act providing that rural or suburban property within the city limits should be taxed at a lower rate than property within the built-up portion of the city was held unconstitutional."
Since the writing of the above opinion, Mr. Justice NORTH has written for affirmance of the judgment upon the theory that the constitutional provision relating to a uniform rule of taxation, Constitution 1908, art. 10, § 3, is in conflict with the 15-mill amendment to the Constitution (1908), art. 10, § 21.
Under the uniform rule of taxation we have held that taxes cannot be imposed in disregard of any rule of uniformity,Merrill v. Humphrey, 24 Mich. 170; and that the policy of the State is to secure uniformity and equality, Hogelskamp v.Weeks, 37 Mich. 422. It seems clear that "a uniform rule of taxation" means just what it says, i.e., that taxation shall be uniform. It has no relation to the maximum or minimum limits of taxation. The so-called 15-mill amendment of the Constitution relates solely to the amount of taxes that may be assessed against a piece of property in one year and provides for a limitation of such amount. It in no way infringes upon the rule of uniformity.
If the school district seeks or needs a rate of taxation in excess of 15 mills, the amendment provides a method for so doing. The Constitution of the State of Michigan is our basic law. All acts of the legislature should and must harmonize with the Constitution. Act No. 162, Pub. Acts 1933, permits an additional tax to be levied and assessed against property located in the city portion of the school district. The effect of this act is to authorize two *Page 576 
rates of taxation within a single taxing unit. The act offends the uniform rule of taxation and as such is unconstitutional.
The judgment should be reversed, and the cause remanded to the circuit court of Ingham county for entry of judgment in favor of plaintiff. Plaintiff should recover costs.