Court Opinion

ID: 9731140
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:35:21.553896+00
Date Added: 2024-06-11T18:26:13.913248
License: Public Domain

Kelly, Justice
(concurring in part, dissenting in part).
I concur in that portion of the majority opinion holding that Glen Northrup had standing but dissent to that part of the majority opinion holding that Ex. Sess. L. 1971, c. 24, the metropolitan fiscal disparities law, satisfies the requirements of Minn. Const, art. 9, § 1, that taxes shall be uniform upon the same class of subjects.
The trial court found, contrary to defendants’ assertion, that c. 24 did not establish the 7-county area as a taxing district. The legislature manifested no intent to do so. Chapter 24, as the court *162noted, requires the existing taxing districts to assume the burden of their own delinquencies. The court in its memorandum went on to say:
“* * * [Chapter 24] provides for no new additional services nor does it create new and specific obligations. It requires each taxing district affected to contribute towards the establishment of a base fund and distributes that fund on a formula having no reasonable relationship between that contribution made and the benefit derived by the segment of the population required to bear the financial burden. Its plan imposes a tax on some districts for the benefit of others. It establishes a non-uniform classification of property within a seven county area since it does not exempt that area from its existing statewide classification.
“In general the law fails to pass the test not only of practical and common sense equality but totally fails to pass the test of constitutional uniformity requiring that the burden of a tax must fall equally and impartially upon all persons and properties subject to it.”
Chapter 24, in any event, fails to pass the essential test of uniformity required by Minn. Const, art. 9, § 1, regardless of the status of the 7-county area as a taxing district. No useful purpose would be served in citing the cases of this court that have directly or in effect held that uniformity in distribution of benefits is required under the constitution. They are discussed in the majority opinion, which correctly states that we ar.e invited by defendants to reconsider and overrule those cases to the extent that they hold that uniformity in distribution is required. In my view the majority opinion would effectively overrule those cases.
I concede that absolute uniformity of distribution is not required by our constitution nor by our case law. However, there should be some reasonable relationship between distribution of benefits and the taxes levied. In the present case, defendants’ exhibit 1, attached to the majority opinion, shows many instances with little or no contributions by some communities which none*163theless receive substantial amounts of tax money raised in and paid for by other communities. While an argument may be made that these unequal distributions may change in the future, it isn’t persuasive because in a number of instances the recipients of the benefits under c. 24 are so-called bedroom communities that have never wanted commercial-industrial property with its accompanying noise, smells, and unsightliness in spite of the tax benefits that might accrue to residents of those communities.
The defendants contend that c. 24 reduces the importance of tax base to the planning and development of municipalities, that new commercial-industrial property will be shared to some extent with other municipalities within the metropolitan area, that the race for tax base will be reduced, and the changes brought about should facilitate orderly development within the metropolitan area!
If there is anything to this contention, bedroom communities with little or no commercial-industrial property will have even less incentive for permitting its existence within their boundaries. Thus, it is difficult to conceive of any changes in conditions in the next decade or longer whereby these particular communities will contribute as much as they receive.
Nor can it be said that the distribution of area-wide taxes to these communities bears a direct relation to need. A casual observation of the homes in such areas and common knowledge of the wealth of the inhabitants of those areas make it clear that there is no need for tax relief there.
If defendants’ contentions are valid in this case, why couldn’t the legislature pass a law similar in all respects to c. 24 except that the valuation of residential properties rather than commercial and industrial would be the base for the area-wide tax. Presumably such a law would create an economic force by which bedroom communities would scramble for more industries. This in turn would presumably help facilitate orderly development within the metropolitan area.
What happens if some industry planning to locate on the edge *164of but within the metropolitan area realizes that, because of c. 24, its taxes will be less in an adjoining county outside of the metropolitan area and builds there instead? Will c. 24 then contribute to urban sprawl and adversely affect the metropolitan area’s development? In other words, isn’t the claim of defendants that c. 24 will create benefits that will be enjoyed by all of the contributing communities rather nebulous and speculative?
We know from defendants’ exhibit 1 that the distribution of tax money collected under c. 24 is anything but uniform. It is inconceivable that the speculative benefits suggested by defendants will be enjoyed by the communities involved in any substantially uniform degree. Thus we overrule Village of Robbinsdale v. County of Hennepin, 199 Minn. 203, 271 N. W. 491 (1937), and our other Minnesota cases holding that uniformity of distribution is required if we uphold c. 24.
It is clear that benefits to be distributed need only have a reasonable relationship to the apportionment of taxes to the various taxing districts. Thus, this court in Visina v. Freeman, 252 Minn. 177, 195, 89 N. W. 2d 635, 650 (1958), said:
“* * * If there is a reasonable relationship to the apportionment of the taxes and the benefit to be derived by that segment of our population required to bear the financial burden, it lies within the province of the legislature to make such apportionment.”
Visina cannot be equated with the present case because clearly Duluth, St. Louis County, and the state would benefit from a seaway port and the taxes were apportioned on the basis of benefits to be derived. In the instant case, there is no reasonable relationship between the apportionment of taxes and money distributed to the taxing districts. The claimed benefits of an orderly development of the metropolitan area are too nebulous and speculative to be considered as having any reasonable relationship to the taxes collected and money distributed.
*165Chapter 24 could possibly have been structured so as to be equated with Visina in the area of distribution of benefits. If c. 24 had provided for a parks authority whereby a park or series of parks were to be established in the metropolitan area and the cost thereof was apportioned among the taxing units in accordance with the benefits to be received on some reasonable basis, there might then be uniformity in distribution of benefits. This is just one example of what might be done to accomplish some of the goals of the act. The difficulty with c. 24 as it is presented is that tax monies are distributed to various communities and placed in their general revenue funds and may be used for purposes which cannot be said to be of any benefit to other communities that do not receive as much of the area-wide tax as they contributed.
Chapter 24 should also be declared to be in violation of the uniformity clause of the Minnesota Constitution because it creates a non-uniform rate of taxation upon the same kind of taxable property throughout the metropolitan area within which the tax is to be raised. If we assume that c. 24 did establish the metropolitan area as a taxing district, as contended by defendants, the taxes raised within that district should be at a uniform rate upon the same class of property.
Under c. 24 the metro-area mill rate is applied to commercial-industrial (C-I) property. However, under Minn. St. 473F.08, subd. 6, the area-wide mill rate is applied against a percentage of C-I property, i. e., the ratio that 40 percent of the annual growth in C-I valuation in a particular subdivision since 1971 bears to its total C-I valuation. Because of the variation in growth of C-I property in each taxing unit in the metro area, the C-I property will be taxed at different rates. Thus, it is conceivable that a parcel of C-I property in one community valued at $1,000,000 may pay a tax based on a valuation of $100,000 whereas in an adjoining community a like parcel of C-I property with *166a value of $1,000,000 may pay a tax on only $10,000 of its value.1
Defendants concede that a different proportion of the total assessed valuation of each parcel of C-I property will be subject to the area-wide tax rate in each municipality and state in their brief:
“* * * Amicus’ suggestion that this differential exists is correct. The differential is an essential aspect of the mechanics of Chapter 24. If commercial-industrial tax base is to be shared among communities in proportion to increases which have occurred since 1971, the extent to which individual parcels are subject to the area-wide tax rate must vary from municipality to *167municipality in the same proportions as the rates of growth in valuation vary among those municipalities.”
While defendants admit that the legislature has in essence made a classification by rate, they do not agree that the classification is invalid for that reason and contend that the only question is whether the classification which the legislature has made based upon the location of property in relatively high- or low-growth municipalities is a reasonable one. Defendants then go on to contend that classification by location is reasonably related to the purpose of the statute. This concept, looked at from the standpoint of the taxpayer paying more in area-wide taxes than his competitor located in the next community with an identical facility, no doubt would seem to him to be anything but uniform. Similar statutes that might tax homeowners in one area more than those in another area simply because of location would hardly seem uniform “upon the same class of subjects.”
Incidentally, one of the fringe results of c. 24 is that the greater the growth in value of C-I property the larger the percentage of the value of each piece of property used to make up the area-wide levy. This leaves a smaller portion of the value of each parcel on which to apply the local rate. Then, if that taxing unit does not receive as great a distribution as its contributions to the area-wide tax, that taxing unit will have to increase its local mill rate higher than would otherwise be necessary in order to raise the same amount of revenue. Thus, homeowners in municipalities which contribute more in metro area taxes than they receive in the distribution of those taxes will have to pay more taxes than if c. 24 were not in existence.
It is predictable that the uniformity clause of our Constitution will have little or no effect in the future decisions of this court on tax cases and that it will be easy to circumvent because the standards of Visina and City of Robbinsdale and a host of Minnesota cases will have been washed out.

 As stated in the amicus brief of the city of Bloomington, a short example reveals this nonuniform treatment within the same area-wide taxing district:
“Assumptions:
“1. The seven-county metropolitan area has been established as the taxing district.
“2. An area-wide mill rate of 300 mills.
“3. Forty percent of Community X’s C-I growth since 1971 is equal to ten percent of that community’s total C-I valuation.
“4. A C-I taxpayer in Community X has property valued at $1,000,000.
“5. Forty percent of Community Y’s C-I growth since 1971 is equal to one percent of that community’s total C-I valuation.
“6. A C-I taxpayer in Community Y has property valued at $1,000,000.
“In Community X, the 300 mill levy is applied to $100,000 of the value of that taxpayer’s property. In Community Y, the 300 mill levy is applied to only $10,000 of the value of that taxpayer’s property. Yet, both taxpayers reside within the same alleged metropolitan taxing district and both taxpayers’ property is classified as commercial or industrial by Chapter 24. This is clearly not the uniformity in rate of taxation required by Article 9, Section 1. See Chicago and N. W. Railroad Co. v. State, 128 Wise. 553,108 N. W. 557, 564, where the Court said:
“ ‘There can be no uniform rule, which is not at the same time an equal rule, operating alike upon all the taxable property throughout the territorial limits of the State, municipality, or local subdivision of the government within which and for which the tax is to be raised.’ (Emphasis supplied.)”