Court Opinion

ID: 9629697
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:47:28.822211+00
Date Added: 2024-06-11T09:17:57.432865
License: Public Domain

LEVY, J.,
concurring in part and dissenting in part.
[¶ 32] Although I concur with the result reached by the Court, I do not agree that the Portland Property Tax Relief Program violates Article IX, Section 8 of the Maine Constitution. I believe the Program vio*41lates Article IX, Section 9, and therefore I write separately.
[¶ 38] The Court characterizes the Portland program as establishing a property tax exemption, as it must in order to conclude that the program results in an unequal tax apportionment in violation of Article IX, Section 8. The program, however, authorizes a tax rebate, not a tax exemption. As an expenditure of municipal revenues, the program must be presumed to be valid unless it is demonstrated to be contrary to a state or federal constitutional restriction on the City’s home rule authority. See 30-A M.R.S.A. § 3001(2) (1996) (creating a rebuttable presumption that any ordinance enacted under a municipality’s home rule authority is a valid exercise of that authority). The presumption of validity is overcome here not because the program results in an unequal assessment or apportionment of taxes in violation of Article IX, Section 8, but rather because it is an exercise of the State’s power of taxation without prior legislative authorization in violation of Article IX, Section 9.
I. ARTICLE IX, SECTION 8 OF THE MAINE CONSTITUTION
[¶ 34] The Portland program contains two components. First, it authorizes the expenditure of municipal tax revenues for the purpose of providing a rebate to certain taxpayers in order to reduce their tax burden. In both Delogu and McBreairty, we recognized that a critical distinction exists between the assessment of taxes and the spending of tax revenues:
Although Article IX, Section 8 requires equal assessment of property taxes, it does not apply to the manner in which the government chooses to spend [its] tax revenues. There is no requirement that the Legislature distribute tax revenues equally.
Delogu v. State, 1998 ME 246, ¶ 18, 720 A.2d 1153, 1156 (quoting McBreairty v. Comm’r of Admin, and Fin. Servs., 663 A.2d 50, 55 (Me.1995)).10
[¶ 35] Second, the Portland program anticipates the added expense to the City’s treasury resulting from the program by adopting an across-the-board and uniform increase in the property tax mill rate of eighty-nine cents. This increase is an “apportionment” of taxes subject to the requirement of Article IX, Section 8 that “[a]ll taxes upon real and personal estate ... shall be apportioned and assessed equally according to the just value thereof.” Because the Portland tax increase is uniform as to all taxable property, it is not discriminatory and satisfies the constitutional mandate of equality.
[¶ 36] The Court relies on the apparent linkage between the rebate program and the eighty-nine-cent increase in the mill rate to pay for the program in reaching its *42conclusion that the program results in an unequal apportionment of taxes. However, because the program involves an expenditure from the City’s general fund to qualifying taxpayers, it does not involve the “internalization” that arises when a spending measure and a tax exemption are adopted in a single measure. Internalization occurs where a “credit or exemption defended as an independent payment measure reduces the challenged tax qua tax.” Dan T. Coenen and Walter Hellerstein, Suspect Linkage: The Interplay of State Taxing and Spending Measures in the Application of Constitutional Antidis-crimination Rules, 95 MICH. L. REV. 2167, 2197 (1997). Internalization is not present in programs involving outright government payments. “[T]he absence of internalization in both the strong and weak senses' — through reduction of the tax in question or the reduction of some other tax — substantially undercuts the case for linkage whenever the state makes outright payments of cash.” Id. at 2215.
[¶ 37] The absence of internalization is constitutionally significant because there is, as in this case, a clear and functional barrier drawn between the spending measure and the tax increase. Portland’s rebate program is funded by the City’s various general fund revenue sources and relies on an annual appropriation in order to be sustained. The program must, therefore, compete with all other programs for annual budget approval. Unlike a tax exemption, the Portland program does not place in the hands of individual taxpayers the means to unilaterally reduce their tax apportionment.
[¶ 38] The Portland program does not run afoul of Article IX, Section 8, because the rebate it authorizes is an expenditure of municipal revenues and is not an exemption, and the tax increase associated with it is apportioned equally among all taxpayers.
II. THE RELATIONSHIP BETWEEN HOME RULE AUTHORITY, ARTICLE VIII, PT. 2, § 1 AND THE POWER OF TAXATION, ARTICLE IX, § 9
[¶ 39] Article VIII, pt. 2, § 1, directs the Legislature to prescribe the procedure by which municipalities exercise their home rule authority.11 In School Committee of Town of York v. Tenon of York, 626 A.2d 935 (Me.1993), we held that the enabling legislation enacted to implement this provision, currently codified at 30-A M.R.S.A. § 3001 (1996), “eonvey[ed] a plenary grant of the state’s police power to municipalities, subject only to express or implied limitations,” 626 A.2d at 938, contained in the state and federal constitutions, id. at 939.
[¶ 40] Article IX, Section 9 provides an express limitation on the plenary grant of home rule authority to municipal governments: “The legislature shall never, in any manner, suspend or surrender the power of taxation.” We have construed this language as creating a “ ‘strong and sweeping prohibition’ against delegation of the legislature’s power to tax.” Me. Milk Producers, Inc. v. Comm’r of Agric., 483 A.2d 1213, 1220 n. 11 (Me.1984) (quoting Boston Milk Producers, Inc. v. Halperin, 446 A.2d 33, 40 (Me.1982)). The question presented here is whether the power to tax includes *43the establishment of a program, such as Portland’s, that provides for direct payments to individual taxpayers for the purpose of reducing their tax burden. I conclude that it does.
[¶ 41] The sovereign’s power of taxation has various attributes, among them the establishment of a process for obtaining the abatement of taxes. This is reflected in the Maine Tax Code, which provides for the abatement of taxes based on errors or mistakes in assessments and the infirmity or poverty of the taxpayer. 36 M.R.S.A. § 841(1), (2) (1990 & Supp.2003). An individual may apply for an abatement based on an error or mistake “within one year from commitment” so that, in some instances, an abatement may be sought and obtained after the tax has been paid. Id. § 841(1). When a taxpayer receives an abatement of taxes after having paid a tax assessment, the abatement takes the form of a rebate. A rebate is “[a] return of part of a payment, serving as a discount or reduction.” BLACK’S LAW DICTIONARY 1273 (7th ed.1999).
[¶ 42] Regardless of whether one characterizes a payment made pursuant to the Portland program as an abatement or a rebate, the result is the same: the City makes a direct payment so as to effectively reduce the recipient’s tax burden. This is precisely what was intended through the enactment of the program: “The purpose of this program is to provide property tax relief to Portland homeowners.” Portland, Me., Code ch. 2, § 2-430. Although, for the reasons previously discussed, the Portland program payments do not constitute a tax exemption subject to scrutiny under Article IX, Section 8, they do constitute an abatement of taxes subject to the nondele-gation mandate of Article IX, Section 9.
[¶ 43] Article IX, Section 9 is unequivocal: “The Legislature shall never, in any manner, suspend or surrender the power of taxation.” Because the creation of a tax abatement arises from the power to tax, approval by the Maine Legislature is required before a municipality may create and implement a tax abatement program. In view of the “strong and sweeping” constitutional proscription contained in Article IX, Section 9, I conclude that Portland exceeded its home rule authority by adopting the program without prior legislative authorization.

. The plaintiffs attempt to distinguish this case from the holdings in Delogu and McBreairty largely on the identity of funds involved — -specifically, that a portion of the same property tax dollars being paid in are automatically being paid out to some, but not all taxpayers. This contention is unfounded. The revenues resulting from the increase in the City’s mill rate are not segregated, but are instead paid into the City's general fund. Accordingly, the source of funds for the rebate program is an amalgamation of all revenue sources, including property taxes, excise taxes, revenue sharing, forfeitures, fees, etc. In addition, Delogu does not stand for the proposition that Article IX, Section 8 requires legislative authorization as a prerequisite for a municipal property tax rebate or repayment program targeting selected properties. In De-logu, we concluded that the City of Bath’s tax increment financing program did not violate Article IX, Section 8 because the TIF was an expenditure of tax revenues, and not an assessment of taxes. Delogu, 1998 ME 246, ¶ 18, 720 A.2d at 1156. The fact that the TIF had prior legislative authorization had no bearing on this conclusion.

. Article VIII of the Maine Constitution states:
The inhabitants of any municipality shall have the power to alter and amend their charters on all matters, not prohibited by Constitution or general law, which are local and municipal in character. The Legislature shall prescribe the procedure by which the municipality may so act.
ME. CONST, art. VIII, pt. 2, § 1.