Court Opinion

ID: 9706599
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:47:11.798815+00
Date Added: 2024-06-11T18:22:23.842157
License: Public Domain

Connolly, L,
dissenting.
The common levy created by L.B. 839 constitutes a commutation of tax in violation of article VIII, § 4, of the Nebraska Constitution. The constitutional proscription against commuting a tax prevents the Legislature from releasing either persons or property from contributing a proportionate share of tax. Jaksha v. State, 241 Neb. 106, 486 N.W.2d 858 (1992). A tax burden lifted from one group of taxpayers must necessarily be shouldered by another group of taxpayers. Id. An example of the injustice underlying a commutation of taxes was expressed by William Jennings Bryan at the constitutional convention of 1919-20, “If you will take from one man ten dollars when you should only take five, and then take from some other man only five when you should take ten . . . you simply take five dollars from one man’s pocket and put it into another man’s pocket.” 1 Journal of the Nebraska Constitutional Convention at 310 (1919-1920). The result of the majority opinion is that the taxpayers of district 31 have had their pockets picked.
By consolidating separate school districts into one “system,” L.B. 839 causes the “system” as a whole to lose state equalization aid, and places the burden of making up the shortfall on the other separate school districts within the system, *483rather than on the districts which experience the loss in equalization aid. This “system” places unequal burdens of taxation upon some Class I districts for the benefit of the other Class I districts. Simply put, L.B. 839 takes $10 from Swanson when he should pay only $5 and gives it to the Class I districts, thereby reducing their contribution and, thus, putting $5 into their pockets.
In the instant case, Swanson’s district 31 tax levy for school purposes will increase from 0.6287 per $100 assessed valuation, generating $46,485 to a common levy of 1.2096 per $100 assessed valuation, generating $89,436. The excess $42,951 of property tax revenue generated on property located solely within district 31 will be distributed to other districts within the Valentine Class VI school system to satisfy a portion of their property tax requirements. In dollars, the impact on Swanson’s property is that out of a total tax of $465.21, of which $241.80 is required for district 31 and Valentine High School, the excess $223.41 will be distributed to the other districts within the Valentine Class VI school system to assist the other districts. The obvious result is that Swanson’s taxes are used to reduce the taxes to be paid by owners of taxable property in the other districts, particularly district 1.
As the majority recognizes, prior to L.B. 839, taxpayers within an unaffiliated Class I district paid tax only for their own Class I district and the Class VI district which students from their Class I district attend. What has changed under L.B. 839 is the additional burden placed upon the taxpayer in an unaffiliated Class I district. Swanson continues to fund his Class I and Class VI districts and must also support the other Class I districts with tax revenue derived from his property, although his property is not located in those districts.
The majority erroneously contends that the whole amount of the common levy must affect solely local purposes of the other Class I districts in order to constitute an unconstitutional commutation of tax. However, this court has held that a law imposing an unfair or unequal burden of taxation upon one school district for the benefit of another is unconstitutional. State, ex rel. Groves, v. School District, 101 Neb. 263, 162 N.W. 640 (1917).
*484By funding district 31’s schools and then redistributing the excess property tax revenue to the other Class I districts within the legislatively created system, the majority concludes that the Legislature is within its power to divert the funds because it has created a legitimate “taxing district.” Following the tax district concept to its logical conclusion, one could envision a “super taxing district” which could encompass the entire state, and utilize the property tax revenue raised in that “district” to finance expenditures only in Lincoln. The State could argue that the constitutional prohibition against commutation of tax is not violated by arguing that a “benefit” accrues to the entire state because the expenditure takes place in one portion of the taxing district.
Swanson will receive no benefit for his tax dollars. Class I districts adopt their own budgets, conduct their own elections for the Department of Education, and possess separate and distinct boundaries. That portion of Swanson’s tax dollar spent within district 31 benefits Swanson, whether he has children in the district or not, partly because Swanson may vote for board members and be represented. However, for that portion of tax paid which exceeds the need of district 31, Swanson receives no benefit. The excess funds will fall under the control of a board of education for which he has no right to cast a vote.
Under L.B. 839, any amount of tax collected by levy against property located in district 31 which exceeds the property tax requirements of district 31 will reduce or have the effect of reducing the tax burden of individuals residing in the other Class I districts which are a part of the artificially created “system.” The common levy of L.B. 839 results in a commutation no matter how it is disguised.
Wright, J., joins in this dissent.