Court Opinion

ID: 9856299
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:44:05.780112+00
Date Added: 2024-06-11T09:38:32.848048
License: Public Domain

NEELY, Justice,
dissenting:
I respectfully dissent from the majority’s opinion. I believe that the analysis of my brothers is technically flawed and, in large part, disingenuous, and that their decision is unnecessary and fundamentally wrong.
I
The words of Article X, § 1 of the West Virginia Constitution do not mandate or even imply the result in this case. The majority has focused in syllabus point 3 on the word “value,” taken out of its context. The context in which the word “value” is found is as follows: “... taxation shall be equal and uniform throughout the State, and all property, both real and personal, shall be taxed in proportion to its value to be ascertained as directed by law.” (Emphasis mine). The Constitution’s command is that taxation be in proportion to value, and the current taxing system obeys that command. If the drafters of our Constitution had intended today’s result, they could have required that property “shall be taxed at its value to be ascertained by law.”
It should be obvious that the expression “in proportion to value” has a very different meaning from the word “value” alone, and in the past, this difference has not escaped us. In numerous cases we have required that taxation be equal and uniform in the sense that the tax paid by each *623taxpayer must be in the same proportion to the value of his property as the taxes paid hy similarly situated taxpayers are to the value of their property. See, In re United States Steel Corp., 165 W.Va. 373, 268 S.E.2d 128 (1980); In re Assessment against Pocahontas Land Corp., 158 W.Va. 229, 210 S.E.2d 641 (1976); In re Assessment of Kanawha Valley Bank, 144 W.Va. 346, 109 S.E.2d 649 (1959).
I have no quarrel with the majority’s definition of the term “value” and the exhaustive authority they marshal to support it. The majority can define value until they are blue in the face and still not escape the fact that the Constitution requires only that property be taxed in proportion to even admittedly full and fair value.
Furthermore, there is nothing in the phrasing of the Constitution to indicate that the dependent clause, “to be ascertained as directed by law,” is intended to modify “value” alone. The clause could equally operate to mean that the proportion to value is to be ascertained by law. Indeed the West Virginia Code appears to give this provision such a reading: the law directs that the proportion to value be ascertained at “not less than fifty percent nor more than one hundred percent of the appraised valuation of each said class of property: Provided, however, that beginning July one, one thousand nine hundred eighty-one, the total assessed valuation in each of the four classes of property shall not be less than sixty percent of the appraised valuation of each said class of property.” W.Va.Code, 18-9A-ll(f) [1981],
Finally, even if one finds the majority construction convincing, it still does not require today’s result. California and Virginia have articulated what I believe to be the correct rule regarding the revitalization of language in a state constitution after decades of desuetude. The supreme courts of Virginia and California have both faced constitutionally-based objections to discounted assessments where the state constitution required assessments at full value. Article 10, § 2 of the Constitution of Virginia requires that “all assessments of real estate ... shall be at their fair market value...”, and § 1 directs that “all taxes... shall be uniform upon the same class of subjects....” Article 11, § 12 of the California Constitution states that “All property subject to taxation shall be assessed at its full cash value.”
The Virginia Court held that there is only a “constitutionally required relationship between fair market value and assessment value (where uniform ratios are applied)”, Fray v. County of Culpeper, 212 Va. 148, 150, 183 S.E.2d 175, 177 (1971) (emphasis added) and that they “have consistently honored the breach” of the literal rule “by taking notice of the fact that most local taxing authorities apply a fixed multiple or percentage... to fair market value in order to arrive at assessed value”. Id. at 149, 183 S.E.2d at 177. The Supreme Court of California looked to the history of the adoption into the state constitution of the “full cash value” amendment, and concluded that since a discounted assessment was the practice at the time of the amendment, it “must be deemed to have incorporated into the Constitution the settled interpretation of its predecessor statute.” County of Sacramento v. Hickman, 66 Cal.2d 841, 851, 428 P.2d 593, 599, 59 Cal.Rptr. 609, 615 (1967).
While there are moral injunctions in constitutional provisions like the Bill of Rights and its state counterparts which can, and should be, resurrected or rediscovered by courts, this is possible precisely because they are moral injunctions. Their resurrection can confound no legitimate reliance interest. The same cannot be said about provisions concerning taxation. Although the constitutional mandate of equal, uniform taxation arose from a bitter dispute with Eastern Virginia which had pronounced natural law overtones, the constitutional purpose of ensuring fundamentally equal taxation has long since been satisfied. It is inopportune of the majority to beat the “tyranny of taxation without representation” drum; a substantively neutral provision limiting the flexibility of local assessments to within a fixed percentage of the tax commissioner’s appraisals cannot legitimately be equated to the diseriminato-*624ry system of taxation under which Western Virginians chafed before our independence from Virginia.
II
Courts are not infallible in their readings of statutory or constitutional language, but it is unfortunate when such an error is made by a court of final appeal. In this case the tragedy is that by insisting on applying their erroneous reading the majority has improperly intruded into the province of the legislature. The issue of taxation is, probably more than any other subject, first and last an issue for the legislature. It is the classic political question into which courts should not intrude themselves.
There are uses and abuses of the “political question” doctrine. When a court avoids a truly justiciable question arising from a constitutional provision, and that constitutional provision illuminates a moral imperative, the “political question” doctrine becomes nothing more than the means for a flight from responsibility. On the other hand, when there is an entire matrix of legislative acts, court decisions, and executive policies predicated upon an existing political structure that reflects the rational and completely moral accommodation of conflicting interests, it is improvident for a court to intrude itself gratuitously. There is no issue known to the law or to politics that cannot be phrased by skilled lawyers in constitutional terms; if timidly avoiding truly justiciable controversies is a vice, then straining, contorting, and twisting constitutional language in order to achieve a value-mandated result that reflects nothing but the personal preferences of judges is as great a vice.
The “political question” justification for declining to decide an issue must be predicated upon a careful analysis of the matrix of political accommodations that a particular court decision is likely to disturb.1 In this case such an institutional analysis compels the conclusion that an application of the “political question” doctrine is fitting in this case, and that therefore it is temerarious of this Court to substitute the majority’s political values for those of the legislature and the executive. Politics is the process of accommodation. The only group in society today whose values are entirely vindicated is the courts, and I dissent to that proposition.
Ill
There is little more to law than its application, and its application is determined by institutions. The value of stare decisis is not only that it protects reliance interests, but also that the doctrine helps provide a stable environment in which the institutions which apply laws can grow and change gradually. A successful analogy can be made to the situation in which an oyster finds himself when a piece of sand enters his shell. He cannot dislodge it, so he accommodates himself to it by encasing it in pearl. Similarly, law, even bad law, is made livable and useful by institutional coatings. Shattering the pearl in order to remove the speck of sand would be a foolish tactic, yet that is exactly what this Court has done.
The ramifications of this decision are many. First and foremost, we have today raised taxes. The majority opinion observes that “the framers of the United States Constitution recognized the fundamental requirement of representative taxation in the organic law of the country when they gave sole authority to lay and collect taxes to Congress. U.S. Const., art. 1, § 8. Similarly, the West Virginia Constitution vests in the legislature the power to impose taxes.” However, by requiring that property be assessed at its full appraised value, the Supreme Court of Appeals has raised *625property tax bills by an average of over 60%.2
While the majority points out that levying bodies may now reduce their levy rate to maintain taxes as they are, I doubt that this will occur. The pressures on the county commissions are probably such that they will quickly use all money available to them. The counties may, in fact, be prohibited from lowering their levy rate in response to the rise in assessments this Court now demands. W.Va. Code, § 18-9A-10 [1982] was amended in 1981 to penalize counties that fail to lay the maximum regular tax rates provided by the Code by reducing financial benefits to county schools.3
IV
Property taxes are among the most regressive taxes available to a sovereign. They look to the value of one’s property, not to one’s ability to pay. Thus a working-class West Virginian might save and struggle all his life so that from the age of fifty on he and his family can enjoy a house worth $150,000, while a dentist fresh from the West Virginia University Dental School might purchase such a house at the age of 27. While both the ordinary worker and the dentist have property of equal value, they assuredly have differing capacities to pay a property tax. Where the lion’s share of a political subdivision’s revenue comes from taxation of property, the worker making $25,000 a year bears the same tax burden as the dentist making $95,000 a year.
Considerations going to the regressive nature of property taxes in general have led West Virginia to select other taxes of a less regressive nature whenever needs for more revenue have appeared in recent years. The Constitution has been amended in order to fix maximum rates for ad valorem property taxes, thereby all but eliminating the property tax as a source of revenue for state government.4 W. Va. Const., Art. X, § 1 (adopted by amendment in 1932). Revenue demands have been met by enacting various alternative tax measures, including the business and occupation tax and the consumer sales tax in 1933, the cigarette tax in 1947, the soft drink tax in 1951, the personal income tax in 1961, and the carrier income tax and corporation net income tax in 1967. Although some of these taxes are more progressive than others, all are substantially more progressive than the property tax. Income taxes are, of course, by definition progressive. The business and occupation tax is at least levied on the basis of volume of business, if not on profitability. The consumption, or value-added taxes are progressive in the sense that they tax a transaction from which, particularly in the case of luxury or unnecessary items, citizens may abstain.
The State of West Virginia funds with these taxes a uniquely high proportion of county school costs.5 The policies inherent in the property tax limitation amendment have led the State practically to take over the financial support of county schools. The majority writing in Pauley v. Kelly, 162 W.Va. 672, 255 S.E.2d 859 (1979) made the observation:
*626The Legislature almost forty years ago recognized that: “Because of the adoption of the ‘Tax Limitation Amendment’, it has become necessary for the State to participate to an increasing degree in the financing of the free public schools.” W.Va.Code, 18-9B-1. It passed what is now W.Va.Code, 18-9B-1, et seq., creating the State Board of School Finance and giving it a variety of administrative and budgetary powers over county boards of education.
Id., at 882.
This is a good example of the oyster and pearl phenomenon. In order to mitigate the effects of regressive taxation the property tax limitation amendment was added to the State Constitution. This forced the State to fund the lion’s share of county education through its more progressive taxes. The elaborate provisions of Articles 9, 9A and 9B of Section 18 of the West Virginia Code created an entire bureaucracy to permit and oversee the transfer of State funds received from other sources than the property tax to county schools in order to finance the bulk of county school expenses with revenues not derived from the regressive property tax.
Now it appears that this long and arduous legislative effort is for naught. The Court has permitted the Logan County Board of Education a judicial end run around this legislative bulwark, and handed over to it the fruits of a regressive tax which the bulwark was deliberately erected to protect.
This legislative protection of West Virginia’s citizens from the regressive property tax is not limited to school finance. In 1972 the Federal Grants and County and Municipal Aid Amendment to the West Virginia Constitution was proposed and ratified. W.Va. Const., Art. X, § 6a. This amendment provided that state taxes could be imposed or dedicated “for the benefit of and use by counties, municipalities and other political subdivisions of the State for public purposes.” Id. This amendment allowed the State to funnel revenue from more progressive taxes to the counties, thereby limiting the regressive tax burden on West Virginia’s citizens. Today’s decision thus violates a clear legislative policy disfavoring regressive taxes.
V
The majority opinion speaks darkly of “out-of-state interests” who own the land. However, most land in West Virginia is held by West Virginia residents or businesses. Evidence has been presented before the Court in this case that the small, individual landowner bears a disproportionate weight of the tax burden in West Virginia because of inequitable appraisals by the State Tax Commissioner himself resulting from delays in the state-wide reappraisal demanded by the legislature.6 Enforcement of the one hundred percent assessment by the same official will therefore only serve to increase the disproportionality of the tax burden.
The majority should have considered that for every coal company that underpaid its taxes, there will be countless retired couples (the favorable exemptions going to the very poor notwithstanding) who will either lose their homes because they cannot pay the court’s new tax, or will otherwise be required to live in penury during their declining years because this Court has imposed upon them an unconscionable, regressive tax that would never have been countenanced by their elected officials. Finally, since the commissioner of commerce is constantly soliciting bigger and better “out-of-state interests” to come to West Virginia to open factories and mines, it appears that out-of-state interests are not entirely pernicious.
VI
In this year 1982, the United States is suffering the worst economic conditions since the Great Depression. More to the point, states of the Northeast and North Central regions, like West Virginia, are *627suffering proportionately more than the rest of the country since they are the states where mature industries, often with obsolete plants, are located. West Virginia at this moment has one of the highest unemployment rates in the country. Property taxes tax business in proportion to the value of its property holdings and not in proportion to profitability. Land-intensive businesses, for example, that are on the margin today in the sense that they are just hanging on waiting for an upturn in the economy, but still employing a full or partial labor force, may find a forty percent increase in their property tax bill to be the proverbial, back-breaking straw.
At the same time, states like Texas and Louisiana are extremely aggressive in their competition for industry. Taxation is inextricably intertwined with both a state’s ability to attract new industries and the continued vitality of a state’s existing industries. The political authorities in this State are entrusted with designing our strategy for competing successfully in the national market for industries, and taxation is an essential element of any such strategy. What this Court has done is to increase taxes significantly at a time when the executive and legislative branches must be able to tinker with the economy. We have thus severely reduced the freedom of action of the elected7 branches in exactly the area where a high degree of responsiveness is most required.
The argument that I make concerning the effect of taxation on West Virginia’s attractiveness to industry might appear to the untrained observer to be unjustified. After all, the level of local taxation is not the only criterion upon which industry bases its location decisions. The quality of labor is one important consideration, as is the degree of labor strife or cooperation. The transportation costs of moving raw materials to plants and of moving finished products to customers are also important factors, along with countless other considerations of a similar nature.
Certainly no one will observe a wholesale removal of plants from West Virginia as a direct result of today’s majority ruling. The process is far more subtle and obscure; furthermore, it is not wholesale removal but rather removal at the margin that requires careful consideration. Only a one percent change in employment can have a substantial effect on West Virginia’s economy. Consequently, perhaps a real life example will illuminate the problem.
The Union Carbide Corporation employs approximately 10,000 men and women in four plants in West Virginia. Three of these plants, namely the South Charleston, Institute, and Sistersville plants, produce a diverse range of plastics and chemicals. While these three plants occupy individual parcels of land, each is not just one plant, but really many plants. Within, for example, the South Charleston plant numerous unrelated chemical processes are undertaken, and many different end products manufactured.8 Each separate process is constantly being modernized; every year certain equipment and even total systems for the manufacture of individual products become obsolete, and must be replaced. Thus a chemical plant, like the human body which entirely regenerates itself every seven years, is constantly undergoing minor transformations. In effect, a chemical plant is itself a process.
Union Carbide also has plants outside of West Virginia, among them the Taft, Louisiana plant and the Brownsville, Seadrift, and Texas City plants in Texas. All of these plants are capable of carrying on the *628chemical processing currently going on in the West Virginia plants. Consequently, while today’s decision will not result in the immediate closure of the Union Carbide plants in this State, it does harm the business climate. Our decision could encourage the slow transfer of functions carried on in West Virginia today to other locations outside the State as the equipment used for those functions in West Virginia becomes obsolete, and is replaced elsewhere in Union Carbide’s corporate system. This phenomenon is called by economists “marginal change.”
Unfortunately for the State, the relationship between taxation and the health of West Virginia industry is no less real for its subtlety; over time we are likely to suffer a deterioration in our competitive position because of this Court’s decision today.
VII
Article IX, § 1 of our Constitution directs that “the voters of each county shall elect ... one and not more than two assessors, who shall hold their respective offices for the term of four years.” The inescapable implication of the Constitutional requirement that assessors be elected is that they are expected to be, in some sense, representative. The majority decision postulates vigorously the principles that there should be no taxation without representation, and that the representatives of the people must impose the taxes the people are to pay. This artful rhetorical smoke cannot obscure the actual effect of their decision. The elected office of the assessor has been emasculated, and the assessors have been made the minions of an appointed central taxing authority.
Such an interference with the political balance is inexplicable on the basis of true and uniform valuation requirements. If we are to have to live with the majority’s construction of the Constitutional valuation requirement, it would still have been possible, from a mechanical point of view, to have enjoined the local assessors to assess property at its “true and actual value,” leaving to the Tax Commissioner only the overall supervisory powers currently attendant on that office.9 It is unnecessary to mandate that the commissioner’s appraisal be the standard. In a matter as changing and complex as the calculation of property tax, the simplistic conclusion that the appraisal equals the fair market value will be accurate only coincidentally.
The practice of allowing local assessors to establish the property tax value, subject to the legislative requirement that their assessments total no less than fifty percent (now sixty percent) of the commissioner’s appraisal, has long been accepted in West Virginia. The majority questions whether the elected assessors should set the proportion of taxes by the assessment percentage or the levying body should do so through levy rates, and concludes that the “proportion to value” should be determined by the levying body. There is no cogent authority for that proposition to outweigh the force of a long-established custom based on political practicality, particularly in light of the rigidity of those levy rates, discussed supra.
The custom of permitting elected assessors to establish the relationship between value and assessment has become an integral part of the taxation process, allowing for local relief from the State Tax Commissioner’s appraisals on a large scale and without the expense and nuisance of having to resort to court on a case by case basis.10 Courts can now expect a deluge of litigation; given the small staff of the tax commissioner and that staff’s unfamiliarity *629with property in the fifty-five counties, I should think the commissioner’s evaluations are hardly precise.
VIII
There is a final irony to the majority’s ill-advised and destructive foray into the realm of tax assessments. This catastrophic endeavor was undertaken to ensure that “taxation shall be equal and uniform throughout the State” W.Va.Const., Art. X, § 1, and yet the decision does not require that any county levy (through the county commission) at exactly the same rate as other counties. “... blind guides, which strain at a gnat, and swallow a camel.” Matthew 23:24.

. For what it is worth I have elsewhere tried to construct a practical theory to explain where and when courts should intrude themselves into the political process based on the nature of political institutions. The reason I wrote an entire book on the subject was so as not to have to explain the theory piecemeal in concurring and dissenting opinions. Consequently, for the reader who is not entirely satisfied with my brief reference to the continued viability of the "political question” doctrine, a more elaborate analysis of my position is to be found in R. Neely, How Courts Govern America, Yale University Press (New Haven and London, 1981).

. Local Government Relations Division, State Tax Department, Study of Property Valuations as they Relate to Levies Laid for the Support of Schools (December 1981), p. VI. The study states that in 1981 the statewide ratio of assessed value to appraised value was 61.40%. A raise to 100% will therefore increase current taxes by 62.86645%.

. This amendment was, of course, not designed with this purpose in mind, but rather to foreclose any “free rider” problems in the administration of the school fund. The unforeseen effects of the amendment are an example of the maleficial consequences of judicial meddling in a complex matrix of pre-existing political accommodations.

. Currently, 991/2 percent of property tax revenue remains in the counties. Study of Property Valuations, supra, p. ii. This revenue is insufficient to fund the counties, however, so the property tax limitation amendment in effect requires vast transfusions of state revenue to the counties. It operates not as a limitation on county revenue, but as a limitation on the amount of revenue a county is permitted to receive from the regressive property tax.

. Appendix IV to Pauley v. Kelly, 162 W.Va. 672, 255 S.E.2d 859, at 893 (1979).

. Appalachian Regional Commission; "Severed Wealth/Severed Future: An Examination of the Extent and Impact of Large Scale Land Ownership in West Virginia”, 7 Appalachian Land Ownership Study, 29-38 (Wash., D.C., Nov. 1980).

. We are of course elected officials as well, but the twelve-year duration of our terms serves to indicate that in the system of government we are not intended to be responsive in the same sense or to the same degree as popularly elected legislators, or a popularly elected governor.

. The South Charleston Plant, opened in 1925, now spreads over 230 acres and employs a labor force of 1,375. The plant produces more than 450 different chemicals and plastics including polyols, silicones, propylene glycol, alkanolan-imes, ethers, ketones, vinyl resins, synthetic oils and plasticizers, which find application in everything from brake fluid to chewing gum. Interestingly, the original construction of the plant was primarily to satisfy a three million pound contract for a chemical to keep dynamite from freezing. That chemical later became the base for PRESTONE antifreeze.

. The legal machinery for concerned citizens to challenge any assessments which would not conform to a "true and actual value” standard enacted by this Court is, in fact, already established. Tug Valley Recovery Center, Inc. v. Mingo County Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979).

. One reason for permitting assessments to be only a proportionate percentage of actual value is to avoid constant litigation over what property is worth. In today's economy a house that would have been worth $200,000 in 1977 may only be worth sixty percent of that today. Where assessments are based on only about sixty percent of the “full value” debates of this type are obviated.