Union Free School District No. 3 v. Town of Rye

Hagabty, J.

(dissenting). The Westchester County Tax Law (Laws of 1916, chap. 105, as amd.) provides for the utilization of *460the tax collection machinery of the towns of Westchester county on behalf of school districts within such towns. Upon certification by the trustees or board of education of a school district of the amount of its annual tax and special assessments, the town supervisor extends the tax for such tax district and delivers his warrant for the collection thereof to the receiver of taxes. The tax becomes a lien in September of each year and is paid by the supervisor to the treasurer of the school district in monthly installments until the following first day of February. Thereafter, whenever the supervisor shall receive from the receiver of taxes an account of unpaid school taxes, he shall “ borrow upon the credit of the town a sum not, exceeding the amount of the unpaid taxes so reported.” From the proceeds of such bonds or certificates of indebtedness, the supervisor shall pay to the treasurer of each school district the amount of unpaid school taxes of such district. After this has been done, the taxes as collected belong to the town (Westchester County Tax Law, § 24) and are used for the purpose of liquidating the bonds or certificates. In the event that the town cannot borrow upon such certificates or bonds or dispose of them, the supervisor shall continue to pay to the school districts the taxes as collected. (Id. § 31.)

On the 1st day of February, 1939, there remained uncollected a balance of $15,927.16 of the budget of the plaintiff school district in the sum of $205,289.58, which had been certified by the latter to the supervisor of the defendant the preceding June. Plaintiff demanded that the supervisor of defendant pay over this balance to it, which the latter refused to do, except as collected, on the ground that the Constitution of the State of New York (Art. 8, § 1) prohibited defendant from borrowing money for that purpose. The pertinent provision reads: “ No county, city, town, village or school district shall give or loan any money or property to or in aid of any individual, or private corporation or association, or private undertaking, or become directly or indirectly the owner of stock in, or bonds of, any private corporation or association; nor shall any county, city, town, village or school district give or loan its credit to or in aid of any individual, or public or private corporation or association, or private undertaking, but this provision shall not prevent a county from contracting indebtedness for the purpose of advancing to a town or school district, pursuant to law, the amount of unpaid taxes returned to it.” (Emphasis mine.)

In the light of this recent amendment, the provisions of the Westchester County Tax Law, in so far as they require the defendant to borrow upon its credit to pay school district taxes, are, in my opinion, unconstitutional.

*461The school district, itself a civil division of the State (Herman v. Board of Education, 234 N. Y. 196, 202), acts through its trustees, who also constitute the board of education. The board of trustees is a public corporation. (Bassett v. Fish, 75 N. Y. 303, 311; Van Campen v. Olean General Hospital, 210 App. Div. 204, 206; affd., without opinion, 239 N. Y. 615; Education Law, § 270.) There might be room for argument that, in adopting the above-quoted constitutional provision, it was not intended thereby to affect the power of the town to borrow on its own credit in aid of a civil division of the State; even though operating through the medium of a public corporation, but such a contention is not tenable in the light of the saving clause incorporated in the prohibition, which clearly indicates that the constitutional provision does contemplate the inclusion of school districts as public corporations on behalf of which a town may not lend its credit. A county alone may do so for the amount of unpaid taxes returned to it. Expressio unius est exclusio alterius.

It is plaintiff’s contention, in effect, that although the town, in form, is borrowing on its credit for the school district, it is in reality borrowing for itself, as education may under the circumstances be said to be a town purpose. Even though it may be held that moneys paid to a school district are expended for a town purpose (Village of Kenmore v. County of Erie, 252 N. Y. 437, 442), the State, in enacting the Westchester County Tax Law, elected to impose a tax directly for that purpose, although taking advantage of the taxing machinery of that political subdivision, rather than charge the subdivision with the obligation of maintaining the educational system within its confines. (Mayor, etc., of City of N. Y. v. Davenport, 92 N. Y. 604, 616.) Pursuant to the scheme of taxation evolved in the Tax Law under consideration, the budget for a school district is made and prepared by the trustees or board of education of such district, the assessment roll is subdivided to show a separate division or column for school district taxes, and the latter are kept apart as a fund independent of town taxes. The town as an entity is not primarily charged with the obligation of paying for educational requirements. Under such circumstances, the constitutional provision cannot be construed as ignoring the independent entities of the town and the school district, particularly in the light of the saving clause.

For the foregoing reasons, I am of opinion that, in accordance with the stipulation of the parties, judgment should be rendered for the defendant, dismissing the claim of the plaintiff, without costs.

Judgment directed for the plaintiff, without costs.