No. 2--96--0842
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IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
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In re APPLICATION OF THE ) Appeal from the Circuit Court
DU PAGE COUNTY COLLECTOR, ) of Du Page County.
for Judgment for Delinquent )
Taxes for the Year 1990 ) No. 91--TX1--130
)
(John Lotus Novak, Petitioner- )
Appellee, v. American National )
Bank, Trust No. 62999; Athena )
Industries; Brush Hill Trust; )
Connecticut Mutual; DeVry, )
Inc.; Edgewood Bank; Wilbur A. )
Eich, Trustee; FVOC II/Walsh, )
Higgins; Glen Ellyn Clinic; )
High Grove East/Walsh, Higgins; )
IR Construction Products Compa- )
ny; John M. Smythe Company; )
Lawrence Kadish; Pansophic Sys- )
tems; Rogers and Company; Summit)
Associates; Urbco, Inc.; UTI of ) Honorable
Illinois; and Walsh, Higgins, ) John W. Darrah,
Objectors-Appellants). ) Judge, Presiding.
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JUSTICE COLWELL delivered the opinion of the court:
Objectors, owners of real property in Du Page County, appeal
an order granting summary judgment to the petitioner, John Lotus
Novak, the Du Page County Collector (Collector), and overruling
objections to taxes levied by various school districts and other
taxing bodies for contributions to the Illinois Municipal
Retirement Fund (IMRF). Objectors and the Collector stipulated
that, with specified exceptions, the trial court's resolution of
the objection of American National Bank, Trust No. 62999, to the
tax levy of School District No. 203 (the district) for fiscal 1990
would bind other taxing districts for other years insofar as the
objections to those levies raised legally indistinguishable issues.
On appeal (see 155 Ill. 2d R. 304(a)), objectors argue that
the trial court erred in upholding the district's IMRF-related tax
levy for fiscal 1990. Objectors maintain that the district did not
comply with section 7--171(a) of the Illinois Pension Code (Ill.
Rev. Stat. 1989, ch. 108½, par. 7--171(a)(now codified, as amended,
at 40 ILCS Ann. 5/7--171(a) (Smith-Hurd Supp. 1996))) because it
failed to pass an appropriation ordinance approving the IMRF
contributions before it levied the taxes to raise these sums.
According to objectors, section 7--171(a) required the district to
follow section 8--2--9 of the Illinois Municipal Code (Ill. Rev.
Stat. 1989, ch. 24, par. 8--2--9) by adopting an appropriation
ordinance that included the IMRF contributions. Thus, they
maintain, the district did not validate the tax levy merely by
including the sums in the annual budget it adopted pursuant to the
School Code (see Ill. Rev. Stat. 1989, ch. 122, par. 17--1 et
seq.).
The Collector responds that the district complied with section
7--171(a) by allocating money for the IMRF contributions through
its normal budget process and that it did not need to pass an
appropriation ordinance to "appropriate" the necessary sums. The
Collector relies in part on People ex rel. Bonefeste v. B.D.H.
Rentals, 277 Ill. App. 3d 614 (1996), in which the Appellate Court,
Fourth District, rejected a similar challenge to a school
district's tax levy for pension contributions. The Collector also
observes that, when the legislature amended section 7--171(a) in
1995, it explicitly validated IMRF-related levies that school
districts adopted prior to the amendment's effective date. See
Pub. Act 87--329, eff. August 17, 1995 (amending 40 ILCS 5/7--171
(West 1994)). As he did at the trial level, the Collector argues
that the history of this legislation shows that it was intended to
clarify existing law rather than change it and thus is evidence
that section 7--171(a) previously authorized the appropriation
method the district used here.
We agree with Bonefeste that (irrespective of the 1995
amendment) section 7--171(a) allows a school district to levy a tax
for IMRF purposes if the school district has set aside this money
in a duly adopted annual budget. Thus, we affirm.
As in effect in 1990, section 7--171(a) provided, in pertinent
part:
"(a) Each municipality shall appropriate an amount
sufficient to provide for the current municipality
contributions required by Section 7--172 of this Article, for
the fiscal year for which the appropriation is made and all
amounts due for municipal contributions for previous years."
(Emphasis added.) Ill. Rev. Stat. 1989, ch. 108½, par. 7--
171(a) (now codified, as amended, at 40 ILCS Ann. 5/7--171(a)
(Smith-Hurd Supp. 1996)).
According to objectors, the above language requires school
districts, which are "municipalities" for purposes of the Illinois
Pension Code (see Ill. Rev. Stat. 1989, ch. 108½, par. 7--
132(a)(2)), to pass appropriation ordinances as opposed to merely
budgeting for IMRF-related expenditures, as they do for other
matters, pursuant to the School Code. We disagree.
Objectors acknowledge that this argument was rejected in
Bonefeste, where the appellate court upheld a school district's
IMRF-related levy even though the district passed no appropriation
ordinance but relied on its annual budget. The court observed
first that, unlike most other municipalities, school districts are
not required by statute to pass appropriation ordinances.
Bonefeste, 277 Ill. App. 3d at 624, citing Ill. Rev. Stat. 1989,
ch. 85, par. 802(1). The court reasoned that requiring school
districts to pass appropriation ordinances for IMRF purposes would
conflict with the legislative intent behind this general exemption.
Bonefeste, 277 Ill. App. 3d at 624.
The court explained second that section 7--171(a)'s command to
"appropriate" money requires only that the district set aside a
specified amount of money for the governmental purpose at hand
(here, IMRF-related expenditures). Bonefeste, 277 Ill. App. 3d at
624, relying on Black's Law Dictionary 101 (6th ed. 1990).
Bonefeste reasoned that a school district that formally adopts a
budget pursuant to the School Code "appropriates" money by
legislatively authorizing spending a given amount on a particular
object. Thus, the court concluded, the district followed section
7--171(a) and its IMRF-related levy was valid. Bonefeste, 277 Ill.
App. 3d at 624-25.
We agree with Bonefeste that a duly adopted school district
budget that sets aside spending for IMRF purposes "appropriates"
money for that purpose in satisfaction of section 7--171(a) of the
Illinois Pension Code. This commonsense conclusion avoids carving
out an exception to the School Code or elevating formalities over
substance. Moreover, it accords not only with the dictionary
definition of "appropriate" but also with the case law. See
Illinois Municipal Retirement Fund v. City of Barry, 52 Ill. App.
3d 644, 646 (1977); Schwartz v. City of Chicago, 223 Ill. App. 184,
192 (1921) (an appropriation is setting apart from public revenue
a certain sum of money for a specific object).
Objectors maintain that Bonefeste's reading of section 7--
171(a) conflicts with People ex rel. Larson v. Thompson, 377 Ill.
104 (1941). However, Thompson established no enduring principle
that local tax levies must always be preceded by appropriation
ordinances of the type specified by the Illinois Municipal Code.
Rather, Thompson merely discussed and applied the municipal budget
statute as it then existed, noting that the law at that time
applied to school districts as it did to municipalities in general.
Thompson, 377 Ill. at 116-18. Nothing in Thompson casts doubt on
the validity of Bonefeste.
For the foregoing reasons, judgment of the circuit court of Du
Page County is affirmed.
Affirmed.
McLAREN and BOWMAN, JJ., concur.