Court Opinion

ID: 7025773
Source: CourtListenerOpinion
Date Created: 2022-07-24 05:05:57.666988+00
Date Added: 2024-06-11T12:05:27.459171
License: Public Domain

JUSTICE SCARIANO, dissenting: I respectfully dissent from most of the majority’s holdings, for although the District has evidently succeeded thus far in the delicate political art of obtaining money from the taxpayer without disturbing the voter, I decline the offer to let the matter glide ever so blithely by this court. The District’s budgeting process takes place prior to the budget year, and the levy of the tax is generally made 18 months later; accordingly, as the majority indicate, the District’s 1983 budget was adopted on December 9, 1982, and amended December 16, 1982, and its 1983 tax levy was extended by the county clerk in June 1984. The corporate fund levy included the amount of $3,800,000 for interest expense to be paid on tax anticipation warrants, to which the taxpayer objected on the ground that the District knew more than one year prior to the extension of the levy that the General Assembly made it unnecessary that there be any need for the expenditure of those funds for the purpose stated by the District. Public Act 82 — 1046, which rendered the levy unnecessary, became effective February 2, 1983, only six weeks after the 1983 budget was passed.1  The Act amended section 9(b)2 to authorize the District to augment its corporate working cash fund through the sale of long-term bonds which eliminated the need for the issuance of annual tax anticipation notes. Such working cash bonds were issued in March 1983, shortly after the effective date of Public Act 82 — 1046, which reduced by $3,800,000 the amount of funds actually expended by the District out of the corporate fund for 1983, a reduction attributable to the interest saved by the District’s not having to mortgage its tax receipts. Indeed, the reason offered to the General Assembly by its proponents for adopting the bill was the savings the District’s taxpayers would realize thereby. As Representative Terzich stated to the House: “I am sure that many of you have received a letter from the president of the sanitary district as well as the ... news article from the Tribune which states that this is a good government Bill. The Bill would raise from 40 to 90% the amount of its levy that the district can put into its working cash fund. This would allow it to minimize borrowing *** and reduce interest costs which *** is bore by the taxpayers.” (82d Ill. Gen. Assem., House Proceedings, April 22, 1982, at 132 (comments of Representative Terzich). On July 14, 1983, the Pollution Control Board, pursuant to a petition filed by the District, granted it a variance allowing it to reduce the level of chlorinating its effluent, which in turn reduced by $2,500,000 the amount of funds actually expended by the District from the corporate fund for chlorination purposes. While neither of these events (the passage of Public Act 82 — 1046 and the granting of the variance by the Pollution Control Board) had formally transpired before the December 9, 1982, adoption of the budget and appropriation ordinance, it is equally clear that both matters transpired more than one year before the 1983 tax levy was extended in June 1984. Thus, for a period of more than one year, the District knew that these items for which expenditures had been appropriated were no longer necessary. The District, however, did not abate the corporate fund levy to take into account that the items were no longer required expenditures, even though they had an exceedingly long period of time to do so, and even though such a procedure was altogether possible. Indeed, $2,341,138 was abated by the District from the levy for the bond and interest fund with respect to pre-1979 bonds, which indicates quite clearly that the abatement process is neither a foreign nor even an esoteric one for the District to employ. I have not the organs to perceive that the efforts of the General Assembly and the Pollution Control Board were intended by either of them to result in the disadvantage which has befallen the taxpayers of the District. On the contrary, Representative Terzich’s remarks and, indeed, the clarity of purpose inherent in Public Act 82 — 1046 and in the Pollution Board’s grant of a variance, leave no doubt that the aim of both agencies was to make it possible for the District to alleviate the tax burden of its constituents, who, not incidentally, are those of the legislature and the Board as well. And this is perhaps the most telling and ironic part of this whole affair: That the District would intensively lobby the legislature for the passage of Public Act 82 — 1046 as a “good government” measure, gain media support for it, and win an equally tax-saving variance from the Pollution Control Board, only to stand by stoically for months on end, despite the splendid opportunity it had to make a good-faith effort to fulfill the prophesy of the measures that endowed it with the capacity to act in the best interests of its taxpayers. I disagree with the view the majority takes of the case of People ex rel. Brenza v. Fleetwood (1953), 413 Ill. 530, cited by the objector. There, an objection to the library fund was sustained where it was shown that for the preceding five-year period, appropriations for machinery and equipment totalled $23,000, yet no expenditures were made from that account. Accordingly, the current appropriation for the same expenditure was held illegal over the City’s contention that although the expenditure was intended to be made, war conditions prevented it. In the case at bar, however, the situation is far more compelling — the expenditure of $6,300,000 was not prevented by anything that even remotely resembled a force majeure; it was rendered wholly unnecessary. As the objector here notes, the District’s actions clearly fall within the rule that “[i]t is against the policy of the law to raise taxes faster than they are likely to be needed.” Matthews v. City of Chicago (1930), 342 Ill. 120, 139. The District and the majority rely on People ex rel. Brenza v. Gebbie (1955), 5 Ill. 2d 565; yet Gebbie, as the majority acknowledge, dealt with estimates made by the District and the taxpayer was essentially questioning the accuracy of the estimate. The majority also acknowledge that in Fleetwood “the supreme court stated that an objection is not established merely by a showing of a difference between the estimation and the result.” (241 Ill. App. 3d at 756.) Yet, it is clear that the objector here challenges the $6,300,000 item relating to tax anticipation bonds and chlorination on the ground that they were not necessary — he raises no issue as to excessive estimates. Indeed, it is the stipulation of the parties in the instant case that the $6,300,000 appropriation was wholly unnecessary. Moreover, section 5.3 provides, in pertinent part: “Such appropriations shall specify the objects and functions (activities) for which they are made and the amount appropriated for each object or junction (activity) and shall include appropriations for (a) all current expenditures or charges to be made or incurred during such budget year ***.” (Emphasis added.) Ill. Rev. Stat. 1989, ch. 42, par. 324(m). Thus, the District’s argument that the surplus of funds resulting from its admittedly unnecessary appropriations was carried over and was taken into account with the 1984 tax levies so that 1984 taxpayers would have been given credit for these amounts which were levied for 1983 but not spent ignores the fact that the budget process is an annual one so that only expenses for the current year are to be included in the levy. (Ill. Rev. Stat. 1987, ch. 42, par. 324(m).) Significantly, the District cites no authority for the proposition that levies can be either made or held for contingent purposes. In addition to violating section 5.3, the District’s conduct falls within the well-defined and well-settled principle of law which prohibits the unnecessary accumulation of moneys by taxing bodies. People ex rel. Clark v. Baltimore & Ohio Southwestern Ry. Co. (1933), 353 Ill. 492. The objector argues that the District overestimated the amount of 1983 expenditures made from the corporate fund by some $18 million or 14% of the amount actually expended. As indicated above, $6,300,000 of this overestimate of expenditures was the result of the failure of the purpose for which those moneys were to be spent. The balance is simply the result of a significant overestimate of anticipated expenses. The principal difference between the parties as to this issue is that the District claims the right to estimate expenditures for services to be paid for in a later year, e.g., 1984. Yet, as indicated above, the budgeting process is annual in nature and section 5.3 plainly provides that estimates for expenses must be relative to expenses being incurred in the budget year. The circuit court found the levy for expenses beyond the budget year to be justified by the provisions of section 5.8, which requires the District to create and maintain an appropriation record when it enters into a long-term contract calling for expenditures over a period of years. A plain reading of the statute, however, demonstrates that it does not give the District authority to levy for future expenses beyond the budget year. The parties have stipulated that the District estimated the amount of corporate fund surplus available for appropriation for 1983 to be $16,082,360. The actual amount of surplus available for appropriation on a budgetary basis of accounting was $21,063,000. Under generally accepted accounting principles, the amount of surplus available was reported at $27,467,000. Accordingly, the corporate fund surplus was underestimated by approximately $11.4 million under generally accepted accounting principles, while the underestimate would have been almost $5 million on a budgetary basis of accounting. Even if we assume that the budgetary basis of accounting is the one to be used, the understatement of approximately $5 million constitutes a 30% disparity between the estimate and that which was actually on hand. Here the underestimate is significant enough to be violative of the rule in Gebbie. Moreover, the 1983 incident is not an isolated one; the objector shows that the District made a similar underestimate of approximately $12 million with respect to the corporate fund for the 1984 tax year. It goes without saying that the accumulation of unnecessary funds in the public treasury unnecessarily increases real estate taxes. If these are difficult times for taxing bodies, they are even more trying for the taxpayers of this country who are already required to devote, individually, several months of each work year to the payment of the myriad of taxes levied on them. We need not add to those rigors by looking the other way when taxing bodies take unwarranted liberties with their money. Surely, the legislature has manifested no such intent — anywhere. I concur, however, in the majority’s rejection of the objector’s challenge to the District’s appropriation of $8,711,350 for various items in the 1983 budget referred to in paragraph 12 of the stipulation entered into by the parties herein which relates to the District’s allegedly stating only vaguely the purposes for which the amounts were appropriated. In the case of In re Application of Novak (1986), 142 Ill. App. 3d 1004, on which the objector relies, the alleged vagueness as to purpose went to such labels as “for the purposes set forth in the ‘Illinois Highway Code,’ as amended,” and “for the purposes set forth in ‘an Act to Revise the Law in Relation to Counties,’ as amended” (142 Ill. App. 3d at 1006), etc., which, although held invalid by the court, resulted only in a remand in order to give the taxing body an opportunity to amend the designations. I agree with the majority that the purposes here were validly stated. I concur also in the majority’s holding that the trial court improperly dismissed the taxpayer’s objection relating to the bond and interest fund and the annuity and benefit fund levies; I would not agree, though, if a proper calculation of the bond and interest fund levy should result in an excess of $424,917, the figure the trial court had before it, that it should be held to be de minimis, as the trial court did, since the error would have affected the tax rate and the discrepancy is actionable. To the extent that the levies were improperly made, I would hold that the pro rata proportion of the 4% levy for loss and costs in collection should be held to be equally invalid. I would, therefore, hold that the trial court erred in overruling the taxpayer’s objections to the 1983 corporate fund levies, except the levy objected to as vague and those relating to the bond and interest and the annuity and benefit funds. Accordingly, I would reverse and remand this cause to the circuit court with instructions to sustain the taxpayer’s objections to the improper levies and order the treasurer, accordingly, to make a proper refund to the taxpayer of the taxes he paid under protest.   The legislative history of the bill indicates that it was passed by the General Assembly on May 6, 1982, but returned by the Governor with an amendatory veto affecting other provisions of the bill on November 5, 1982. The legislature accepted the change on December 3, 1982 (six days before the budget was adopted), and the bill was certified by the Governor and simultaneously became law on February 2,1983.    All statutory references are to Ill. Rev. Stat. 1989, ch. 42, unless otherwise indicated.