Court Opinion

ID: 9726447
Source: CourtListenerOpinion
Date Created: 2023-08-26 12:50:04.99785+00
Date Added: 2024-06-11T18:25:27.344002
License: Public Domain

MR. JUSTICE CLARK, dissenting: I respectfully dissent from the majority opinion. I think that the taxation scheme contemplated by the Act violates the uniformity clause of the Illinois Constitution. Under the terms of the Act, once an ordinance is passed by a municipality authorizing tax increment allocation financing, then the ad valorem taxes, if any, arising from the levies upon taxable real property in the project area by the taxing districts will be paid to the county treasurer. “That portion, if any, of such taxes which is attributable to the increase” in real property values over and above the last real property valuation prior to passage of the ordinance is withdrawn from the revenues of each taxing district in the project area and paid to the municipal treasurer for deposit in a special tax allocation fund. (Ill. Rev. Stat. 1977, ch. 24, par. 11-74.4-8.) Thus, before any monies are ever paid to any of the various taxing districts, the county clerk is required to deduct a portion of the revenues and send it to the municipal treasurer to retire the costs and obligations incurred by the municipality in redeveloping an area within that municipality. In my opinion the Act authorizes an invasion of the fiscal integrity of the various taxing districts and is in direct conflict with the opinions of this court which hold that “[t]he prohibition of the constitution is that one municipality may not force another to levy taxes to pay a debt which it did not incur or for the corporate purpose of the other municipality.” (Board of Library Directors v. City of Lake Forest (1959), 17 Ill. 2d 277, 286; Flynn v. Kucharski (1970), 45 Ill. 2d 211, 219.) Even assuming, arguendo, that since the elimination of urban blight serves a public purpose of the State, it need not serve a corporate purpose of each taxing district, it cannot be denied that the various taxing districts are required to levy taxes to pay debts they did not incur. A taxing statute enjoys a strong presumption of validity (Williams v. City of Chicago (1977), 66 Ill. 2d 423, 432-33), and one attacking it must negate every conceivable basis which might support it (Lehnhausen v. Lake Shore Auto Parts Co. (1973), 410 U.S. 356, 364, 35 L. Ed. 2d 351, 358, 93 S. Ct. 1001, 1006). Still in all, there are limits to the taxing power, which limits the judiciary must enforce. A scheme of taxation which permits the compulsory diversion of taxes levied and collected by one municipality to another municipality is constitutionally infirm. (Flynn v. Kucharski (1970), 45 Ill. 2d 211, 219-20.) In Flynn v. Kucharski the act in question permitted taxpayers in Cook County to pay their real property taxes directly to their township collector rather than the county collector. The township collector could retain 2% of the revenues collected as a fee before remitting the remainder to the county collector. The result, it was held, was that the uniformity clause of the Illinois Constitution was violated (Ill. Const. 1870, art. IX, secs. 9, 10; Ill. Const. 1970, art. IX, sec. 4) because a portion of the taxes paid by the taxpayers of Cook County was being diverted to the township for the benefit of the township’s taxpayers. That decision was based on the ground that taxes of the county taxpayers were diverted to the use of the specialized corporate purposes of the townships. My disagreement with the majority opinion stems from the fact that the Act permits a tax to be levied and collected by one unit of government which inures to the benefit of another unit of government. The effect of such revenue diversion is that the taxing districts lose revenue which, while perhaps caused by the redevelopment project, was still levied and collected under the aegis of, and presumably for the exclusive use of, the particular taxing districts. There is no rational basis why an increase in revenue of a taxing district, regardless of the cause for it, should be commandeered and given to another taxing district. The lack of a rational basis becomes even clearer when it is realized that revenues of a large taxing district, such as a county, covering territory far in excess of the municipal boundaries, must be turned over to the municipal treasurer to pay for the elimination of blight within a city. Thus revenue raised for use by the entire county, albeit as a result of urban re development, is not permitted to be used by the county but must be paid to reduce the debt of the municipality. The taxpayers in the county are therefore being taxed in order to pay the debts of the municipality. This results in “a diversion, in the process of collection, and as part of the statutory machinery of collection, of taxes paid by the taxpayers of one governmental unit for the benefit of the taxpayers of another governmental unit.” (Flynn v. Kucharski (1970), 45 Ill. 2d 211, 219.) The Act thereby offends the uniformity provision of article IX, section 4(a), of the 1970 Constitution. Finally, it is argued by the city that the sharing of revenue among units of government is expressly authorized by the 1970 Illinois Constitution, article VII, section 10(a). That section provides: “SECTION 10. INTERGOVERNMENTAL COOPERATION (a) Units of local government and school districts may contract or otherwise associate among themselves, with the State, with other states and their units of local government and school districts, and with the United States to obtain or share services and to exercise, combine, or transfer any power or function, in any manner not prohibited by law or by ordinance. Units of local government and school districts may contract and otherwise associate with individuals, associations, and corporations in any manner not prohibited by law or by ordinance. Participating units of government may use their credit, revenues, and other resources to pay costs and to service debt related to intergovernmental activities.” While this constitutional provision permits revenue sharing among governmental units, that function is quite separate from what is embraced under the act in question here. There is a fundamental difference between the levying and collection of tax revenues by one district for the use of another taxing district, which is involved here, and the voluntary distribution or expenditure of tax revenues, as is contemplated by the constitutional provision authorizing an intergovernmental project designed for the mutual benefit of all units participating. The type of revenue sharing envisioned by the drafters of the Constitution is described in the official explanation of section 10: “This section is new. It permits government at all levels to cooperate in working out common problems. Thus, one local government can contract with another government or private parties to share services and divide the costs equitably.” (7 Record of Proceedings, Sixth Illinois Constitutional Convention 2730, cited in Anderson & Lousin, From Bone Gap to Chicago: A History of the Local Government Article of the 1970 Illinois Constitution, 9 J. Mar. J. Prac. & Proc. 698, 794 (1976).) The sharing of revenue between the State and local governmental units has been approvingly referred to by this court in the past (Goldstein v. Rosewell (1976), 65 Ill. 2d 325, 329), and I know of no reason to assume a different position toward revenue sharing of units of local government inter se. It is quite another matter, however, for the tax revenues generated within one taxing district to be compulsorily diverted to another taxing district, without the consent of the taxpayers in the first taxing district. While my disagreement with the majority opinion is limited to the ground that the Act violates the uniformity clause, as did the act in Flynn v. Kucharski, I note that this legislation also raises serious questions as to the deprivation of the due process and equal protection rights of the taxpayers in the various taxing districts. See Comment, The Constitutionality of the Exercise of Extraterritorial Powers By Municipalities, 45 U. Chi. L. Rev. 151 (1977). MR. JUSTICE MORAN joins in this dissent.