Dwyer v. Omaha-Douglas Public Building Commission

Newton, J.,

dissenting.

The question at issue is whether sections 23-2601 to 23-2612, R. S. Supp., 1971, comprising L.B. 1003, Eighty-second Session of the Nebraska Legislature, and the construction of a courthouse thereunder, comprise an unconstitutional effort to evade the provisions of Article VIII, section 5, Constitution of Nebraska. That section of the Constitution is as'follows: “County authorities shall never assess taxes the aggregate of which shall exceed fifty cents per one hundred dollars actual valúa*54tion as determined by the assessment rolls, except for the payment of indebtedness existing at the adoption hereof, unless authorized by a vote of the people of the county.”

The legislative bill mentioned will hereinafter be referred to as “the act.” Its declared purpose is to provide a means “whereby buildings, structures and facilities can be acquired, constructed, remodeled or renovated and financed for use jointly” by metropolitan cities and the counties in which they are located. It creates a public building commission but provides it can only be activated by resolution of the county board. The commission shall be governed by a board of five members, two appointed by the county board, two by the mayor of the city, and the fifth by the other four members. They serve without compensation. The life span of the commission is 20 years or until all liabilities and bonds have been discharged, after which its properties vest in the county and the city. The commission may acquire personal property and also real property, the latter either by gift, purchase, or condemnation. It may also levy a tax not exceeding one-half mill “upon the assessed valuation of all the taxable property in the county,” and issue bonds subject to authorization by the city and the county. (Emphasis supplied.) The commission books are to be audited by the county auditor. The city and county may each operate and maintain any project of the commission, appropriate funds therefor, convey property to it, acquire real property for its use, and contract for the use of commission projects. The city may levy a tax sufficient to make payments accruing on bonds issued: “* * * Provided, that if the city shall be subject to a limitation by statute or charter on the amount of taxes which may be imposed by the city for its operating expenses, the maximum which may be levied in excess of such limitation pursuant to the authorization of this subdivision, shall not exceed one half mill on the dollar of assessed valuation of all *55taxable property except intangible property; * * *.” § 23-2611, R. S. Supp., 1971.

A county is a governmental or political subdivision of the State and has only such powers as are conferred by legislative act. See Lindburg v. Bennett, 117 Neb. 66, 219 N. W. 851. As far back as 1856, when Nebraska was still a territory, counties were authorized and required to provide “courthouses.” Laws 1856, p. 71. Counties are still required to perform this traditional function. See § 23-120, R. S. Supp., 1971. Notwithstanding the act in question, the construction of courthouses remains a primary county function, just as does the building and maintenance of highways and bridges and the operation and financing of county offices. In fact, without a courthouse, a county could not function at all. If the duty to build a courthouse, jail, etc., primarily county functions to be provided for by a county tax levy, can be abdicated by legislative fiat and financed by some other governmental unit specially created for that purpose, then the same can be done with all other county financed activities. The constitutional limitation on levies for county purposes becomes absolutely meaningless as it can be evaded at will. That the act was conceived for purposes of evasion is readily apparent on examination of legislative committee proceedings which reveal the following statements:.

“SENATOR SNYDER: (Introducer of the Bill.) * * * The city is not included in this bill. The city says it has the money it needs to build the city-county building. But, the county has had its mill limit, and if it is going to partake in a city-county building, it is going to have to find an additional means of revenue. * * *
“SENATOR CARPENTER: You are tryng to bring out that the county board is going to be the landlord, right?
“MR. CAVANAUGH: No, Sir. They are going to build the building; the commission is going to be the landlord.
“SENATOR CARPENTER: Well, it is about the same *56thing. You are going to guarantee it — the county is.
“MR. CAVANAUGH: The county and the city, through our agreements. * * *
“MR. JOHNSON: Senator Carpenter and members of the Committee, I’m Warren Johnson from the Omaha Chamber of Commerce, Staff Manager of the Chamber. The Omaha Chamber has consistently supported the building of a city-county civic center. We feel that LB 1003 provides a means for the county to finance its particular share as you’ve heard it explained, * *.*. * * *
“SENATOR CARPENTER: One other question. On this bill, for example, it says .in this language, ‘to a project of partly for such purposes and partly for other city or county purposes, by purchase or condemnation in the manner prescribed by law and acquisition.’ Are we talking about the acquiring of existing roads, streets, parkways, etc.? Why do you have to have the (inaudible) for a project or partly for such purposes and partly for other city or county purposes?
“MR. HASSETT: (Member of Douglas County Board) The only, purpose that is in there is that the bond attorneys have tried to write this so that if it is attacked at court, it would hold up in the Supreme Court. * * * As far as we’re concerned, we would be just as happy with that out, because we have just one thing in mind, and that is to build the city-county building in a block immediately west of the courthouse. * * *
“MR. HASSETT: And if we can amend that and take those provisions out, and still have this a constitutional bill, we would support it, because we have no other projects in mind. * * *
“SENATOR GOODRICH: Mr. President, Members of the Body, I’d like to call your attention to the fact that this is a building which will be a joint-use building between the city council and the county commissioners. Consequently the county only has to come up with half of the cost of this building or less. * * *
“SENATOR SNYDER: * * So it is imperative that *57the Legislature pass LB 1003 if the county is going to be able to fulfill its part of the financing.”

These quotations have no direct bearing on the issues of constitutionality, but they do indicate the legislative purpose and intention.

The act itself makes it clear that it is a patent attempt to evade the constitutional provision. It will be noted that the commission can only be activated by the county board; commission members are appointed by the city and county officials; it can levy a tax only on the assessed valuation of the county, but the city may and must levy its own tax for its contribution. The books are audited by the county and both the county and city may transfer real and personal property to the commission without consideration. Both the city and the county may operate and maintain commission projects and appropriate funds therefor. On the demise of the commission, its properties revert to the city and county. It is contemplated that the county may occupy the combination courthouse and city hall free of charge.

It is a well-settled rule that a county can exceed the constitutional limitation on county levies only when authorized by a vote of the people of the county. See Chase County v. Chicago, B. & Q. R.R. Co., 58 Neb. 274, 78 N. W. 502. Also, avoidance of the constitutional limit cannot be accomplished by indirection. Grand Island & W. C. R.R. Co. v. County of Dawes, 62 Neb. 44, 86 N. W. 934. In a similar case, the court commented: “If constitutional and statutory prohibitions could be evaded in this manner, they would in effect be completely nullified and constitute no- restraint against the evils they were intended to correct.” Warren v. County of Stanton, 145 Neb. 220, 15 N. W. 2d 757.

The trial judge aptly and ably analyzed the situation as follows: “In appraising the validity of the Statute before it and the action taken to proceed thereunder, the Court must consider the purpose of the debt limita*58tion section of the Constitution and must look through the form of the Statute to the true inwardness of the situation and to the substance of what it does.

“It seems that the clear purpose- of Section 5, Article VIII of the Nebraska Constitution was to prevent the creation of an excessive ■ debt (tax) by a real limitation upon the powers of the Legislature and the Counties to authorize (taxation) indebtedness beyond a certain amount unless authorized by a vote of the people.
“If the Constitution may be circumvented by the simple device of creating new and additional political subdivisions in the same territory to perform a function assigned by statute to another political subdivision, each with separate and independent taxing power, for the purpose of evading the Constitutional prohibition, no real limitation upon the Legislature and the Counties to levy taxes is provided and the object of the Constitutional provision is defeated.
“If one unit of government after another may be imposed upon the same territory for substantially the same purpose, or if every purpose may be subdivided and new debt limits created for each subdivision, there will be, in effect, no Constitutional debt (tax) limitation at all.”

In a similar situation, the court in Lowery v. County of Jefferson (Ky. App.), 458 S. W. 2d 168, stated: “The purpose of creating any kind of separate taxing district would seem to be to provide financing for the accomplishment of a public purpose which for some reason or another cannot effectively be accomplished through the facilities and resources of a traditional municipality such as a county or city. Examples are fire protection districts, drainage districts, library districts, health districts, road districts, flood-control districts;, hospital districts, etc. But if such a district is to have the power to impose taxes separate and apart from county or city taxes, and not chargeable to the rate limit of any county or city, it is plain that the ultimate power to decide whether the tax shall be levied cannot be vested in *59the governing body of a county or city, for then the purported district is in reality nothing but a subterfuge to evade limits on tax rates. For illustration, if the fiscal court of a county has sole voice as to whether or not a particular tax shall be levied upon the taxpayers of the county, it would be pure sophistry to say that the tax is not a county tax.”

In the case before us, the county alone can activate the commission which is tantamount to invoking the tax levy provided for in the act.

In War Memorial Hospital v. Board of County Commissioners, 73 Wyo. 371, 279 P. 2d 472, it was held: “The establishment of public cemetery and public hospital not being a distinctive governmental function of city, and not having been made essential governmental function pursuant to distinct statute, taxing powers of hospital district and cemetery district were not affected by constitutional prohibition against any incorporated town or city levying tax in excess of eight mills on dollar, and tax authorized by statute for upkeep of such districts could be levied by county board notwithstanding that total levy already requested by municipality affected might be eight mills. * * *

“Under provision of constitution prohibiting any incorporated town or city from levying tax in excess of eight mills on a dollar, imposition of additional three mill tax levied by fire protection district to which municipal corporation belonged was forbidden in view of fact that fire protection was a necessary municipal and governmental function which municipality was required to perform.”

The providing of a courthouse is certainly a governmental function specifically required of a county by statute.

In Bacon v. Kent-Ottawa Metropolitan Water Auth. 354 Mich. 159, 92 N. W. 2d 492, the court dealt with a similar constitutional tax limitation and in denying the taxing power of the authority reasoned as follows:

*60“ ‘Careful study of the amendment leads to these conclusions: Clearly the intent was to provide by the fundamental law of the State, which had not theretofore contained such provision, a general limitation upon the exercise of the taxing power of the State. The evil or abuse sought to be remedied was excessive taxation imposed by governmental agencies without the consent of those upon whom the burden was placed.’
“Of such economic conditions the 15-mill amendment of 1932 was conceived, initiated, supported and adopted. But what about the existing law defining ‘a municipal corporation,’ with respect to which the people presumptively determined to apply such final exception? Was it intended to include an ‘authority’ which — a quarter century later — has been authorized or created by legislative act and dubbed, by legislative fiat, ‘a municipal corporation’? To speak plainly, an affirmative answer to this last question — if given — will automatically grant to the legislature the power of outright repeal of a duly-voted constitutional provision.
“* * * Did the people will that the expression ‘a municipal corporation’ should be construed as meaning or referring to some entity or agency other than those already commonly known or recognized by ‘existing laws’ as municipal corporations? Did they bother to resolve a statewide constitutional limitation upon the power of property taxation and, by the same instrument of resolution, mean to provide the legislature with power to nullify the limitation as applied to legislatively manufactured new types of ‘municipal corporations’? Are we to say that the electors of 1932 planned to hand the existing or any future legislature the power and authority to undo, at will, that which became the essence of their resoundingly successful initiatory effort?”

The cited cases make it clear that the majority opinion, by judicial and legislative fiat, has nullified the constitutional limitation on levies for county purposes. It deprives the electorate of that portion of their right of *61suffrage guaranteed by the Constitution as it relates to excess county levies. In the creation of new governmental subdivisions empowered to levy taxes, a line can logically and should be drawn between essentially state, county, or municipal governmental powers and others.