State ex rel. City of Fargo v. Wetz

Robinson, J.

(dissenting). The purpose of this suit is to secure the assessment and taxation of motor vehicles in the same manner as other property. In 1917 the legislature passed an act to create a highway commission (chap. 131), and an act imposing on motor vchi*337cíes a specific license tax in lieu of all other taxes (chap. 156). By the first act a highway commission is created, with power to construct and improve highways. By the second act, in lieu of all other taxes, there is levied on motor vehicles a license tax of $6 on the first 20-horse power, and 50 cents for each additional horse power. The secretary of state is authorized to employ agents and to pay all expenses of collecting the tax. But after making such payments, the balance of the money, if any, is divided into three parts, — one part is apportioned to the several counties, and the rest is put to the credit of the highway commission “to be paid by the state treasurer upon vouchers approved by the secretary of the Commission.” Under the statute the money allotted to the Highway Commission is virtually thrown into its lap. It is given the key to the treasury and the right to expend, as it did from March, 1917, to May 15, 1918:

For drawings .........................'........$50,480.00
For road work ..............................$ 335.21
For the years 1917 and ’18 the motor tax is $722,753.

Those facts are subject to many grave and serious objections. Indeed, they are in direct conflict with several sections of the Constitution and the fundamental principles of law governing taxation. Under the Constitution no act may embrace more than one subject, which must be expressed in its title. § 61. And yet the title to chapter 131 does manifestly embrace several subjects: The title is an act (1) to create a highway commission; (2) to fix the salary of the state engineers; (3) to provide for disposing of fines and penalties; (4) to assent to an act of Congress; (5) to provide state aid in the construction and repairs of roads and bridges; (6) to amend and repel half a dozen sections of the compiled laws. Such a title speaks for itself, and shows beyond question that the act is void and hence in law there is no highway commission.

Now for each year the state tax levy must not exceed 4 mills on the dollar of the assessed valuation of all taxable property, and a sum sufficient to pay interest on the state debt. § 174. But how can that limitation have any force or effect if taxes may be levied on motor vehicles or on other property without any assessment; and if one kind or class of property may be subjected to a tax levy without an assessment, what is there to prevent a similar levy on all kinds or classes *338of property ? If we may levy on motor vehicles a specific tax of from $6 to $60, what is there to prevent a similar levy on every other kind of property? And if we may levy a tax on city property to make country roads, or to fill the pockets of a commission, why may we not levy a tax on country property to pave city streets ? Why may we not levy a tax on one class of people to benefit or enrich another class ?

Furthermore, no tax may be levied except in pursuance of law, and every law imposing a tax must state distinctly the object of the same, to which only it shall be applied. § 175. Yet the law imposing a motor vehicle tax to an amount sufficient to pay nearly all the necessary expenses of the state does not state how it shall be applied. Its application is left mainly to the discretion of the secretary of state and the highway commission. Under the statute the bulk of the money should go to a commission that is left entirely free to expend it when and where and as they may please. The only limitation is that 90 per cent shall be spent in the several counties in proportion to the amount collected therein. “Ten per cent of the fund shall be spent according to the discretion of the commission,” and. “none of the money shall be expended within the limits of any incorporated city or village.” The money is to be paid on vouchers approved by the secretary of the Commission; though the Constitution provides no money shall be paid out of the state treasury except upon appropriations made by law, and on a warrant drawn by the proper officer,— the state auditor. § 186.

Of course, the statute does contemplate that the bulk of the tax shall be used for the construction or improvement of country highways, but the people have not by a two-thirds vote authorized the use of the money in that way, and under the Coiistitution the state may not engage in any work of public improvement unless authorized by a two-thirds vote of the people. § 185.

Moreover, all individual property must.be taxed by uniform rule, according to its value in money, and there may be no exemption of personal property in excess of $200 for each individual, § 176. And all property must be assessed in the county, city, town, village, or district in which it is situated, in manner prescribed by law, except railroads and other public utilities, which are assessed by the state board of equalization. § 179.

*339By vote of the people in 1914 the first sentence of § 176 was amended to read thus: “Taxes shall he uniform upon the same class of property, including franchises within the territorial limits of the authority levying the tax.” Under this innocent amendment, of course, the legislature may classify property for the purposes of taxation, but it may not dispense with an assessment. The amendment does fairly contemplate a classification of property for assessment’ and taxation purposes, and under it an act was passed dividing all property into three classes: (1) The real estate class — to be assessed at 30 per cent of its value; the personal property class, at 20 per cent; the nonproductive class of household property, at 5 per cent. Laws 1917, chap. 59. Motor vehicles are in the second class, and they must be assessed at 20 per cent of their true and full value, and they may not be exempt from taxation. Under said last and latest amendment, approved in 1914, every motor vehicle, like other personal property, must be assessed in the county, city, township, village, or district in which it is situated, and in the manner prescribed by law. § 179. When the assessments are made, then taxes may be levied in pursuance of law by the state and by the several municipalities. Aside from the small sum necessary to pay interest on the public debt, the state may levy no tax in any one year in excess of 4 mills on the dollar of the assessed valuation of all the taxable property. § 174. It may not levy taxes for counties, cities, or other municipalities of take the control of their affairs; because their existence and rights are imbedded in, and guaranteed by, the Constitution. True, the state may, by general law, provide for the organization of municipal corporations and- restrict their power to levy taxes and assessments and to borrow money and contract debts. § 130. But that is not a power to destroy the .municipalities, to manage their affairs, or to levy and disburse their taxes; and most assuredly it is not a power to levy taxes on one municipality or locality for the special benefit of another.

In the majority opinion it is said of those limitations of the Constitution: “If still applicable, as we believe they are, they will necessarily preclude the legislature from taxing a great amount of property according to such a method as is employed in the instant case.” This is an admission that the tax is illegal and void, with a hope that the legislature may not do it again to any great extent. Bor if this method *340of taxation may not be applied to all other property, it must be in conflict with the uniform method of the Constitution. Indeed, it is in no way possible to sustain the motor vehicle tax by a single point of law or logic. For under the plain words of the Constitution there can be no tax without an assessment.

Finally, if the state may levy a specific tax on motor vehicles or on one class of property, “to be in lieu of all other taxes, general or special,” then it may in like manner levy a similar tax on any other class of property, and in that way deny to every municipality the power to levy any tax. It may virtually destroy every municipality by depriving it of any resources, collecting all.its taxes and giving the same to a Commission to be used according to its discretion, but not •in any city or village. As the argument shows, the specific motor vehicle tax, which the statute imposes without any assessment, is in direct conflict with all the fundamental principles of taxation, as guaranteed by the Constitution. Hence, the tax and the statute are illegal and void. That is all as clear and as certain as it is that twice two is four.