Frank v. Barker

DONALD L. Corbin, Justice,

dissenting. Amendment 59 stice, referred to as the “Godzilla” of constitutional amendments. The confusion created by the passage of this amendment persists still today, and now the majority’s opinion ignores the one element of the amendment that has been interpreted in a consistent manner. Heretofore, this court has consistently held that the rollback provision of Amendment 59 is triggered only when there has been a countywide reappraisal resulting in an increase in the aggregate value of taxable real and personal property in excess of ten percent or more over the previous year. See Worth v. City of Rogers, 341 Ark. 12, 14 S.W.3d 471 (2000); Hoyle v. Faucher, 334 Ark. 529, 975 S.W.2d 843 (1998); Gazaway v. Greene County Equalization Bd., 314 Ark. 569, 864 S.W.2d 233 (1993); Clark v. Union Pac. R.R. Co., 294 Ark. 586, 745 S.W.2d 600 (1988). Ignoring this well-established rule of law, the majority has determined that the residents of Garland County are entitled to be members of a class, even though they make no allegations that they have been subjected to a countywide reappraisal.

The majority’s holding in this case is contrary to both the provisions of Amendment 59, as well as to this court’s prior case law. It results from a strained interpretation of the language of Amendment 59 and select constitutional provisions. By analyzing certain words and phrases in isolation, instead of in the context in which they are used, the majority reaches a conclusion that undermines the purpose of Amendment 59. The main example of this faulty analysis is found in the majority’s interpretation of the provisions of Amendment 59 itself. The majority opines that Amendment 59 does not provide for differing treatment of fringe school districts, nor does the Amendment provide for a taxing unit, here the school district, to impose varying tax rates. This conclusion wholly ignores a statutory provision enacted by the General Assembly, pursuant to Act 848 of 1981, as part of the implementing legislation for Amendment 59. The procedures governing rollbacks in fringe school districts are codified at Ark. Code Ann. § 26-26-408 (Repl. 1997). This section provides:

(a) For purposes of this section, the term “fringe school districts” means those school districts whose boundaries extend across one (1) or more county lines.
(b) When there is a statewide or countywide reappraisal of property for ad valorem tax purposes pursuant to court order or pursuant to law enacted by the General Assembly, the millage rollback for fringe school districts will be implemented as follows: That part of the school district in a county reappraised first will be rolled back in accordance with procedures prescribed in this subchapter, and taxes will be levied at that millage rate until such time as a similar reappraisal is completed in the other counties in which the school district lies and the millage in those counties is rolled back in accordance with this subchapter at which time the rolled back millage for the first part of the school district that has been reappraised and the rolled back millage for each succeeding part of the school district that has been reappraised shall be averaged, weighted by the percentage of the total assessment of the school district that each part consists of in order to create a weighted average millage, and thereafter the weighted average millage for the school district will be the millage rate levied in the whole school district. [Emphasis added.]

Seemingly oblivious to this provision, the majority states that it is instructive that the drafters of Amendment 59 did not choose to differentiate between school districts located in one county and school districts spanning two counties. It is ludicrous to assume that simply because the text of the Amendment does not specifically address fringe school districts that they must automatically be governed by the same taxing procedures as school districts located wholly in one county. In fact, the emergency clause of Act 848 states in relevant part:

[T]hat Amendment 59 requires enactment of legislation to implement the provisions thereof and that this Act provides such implementation and should be given effect immediately to accomplish the purposes of Amendment 59 in an orderly, effective and efficient manner.

The existence of these fringe school districts obviously creates unique problems with regard to the rollback of taxes, as evidenced by this case. Mindful of this fact, the General Assembly established procedures that would solve the problem caused when only one county completes a reassessment. It is curious, though, that the majority has chosen to ignore section 26-26-408 in light of its obvious applicability to the present situation.

The majority also opines that Amendment 59 allows for a rollback when the whole taxing unit has been subjected to a ten percent increase in taxable real and personal property in a single year. The majority, however, ignores the following additional language found in Amendment 59:

The adjustment or rollback of tax rates or millage for the “base year” as hereinafter defined shall be- designed to assure that each taxing unit will receive an amount of tax revenue from each tax source no greater than ten percent (10%) above the revenues received during the previous year from each such tax source .... [Emphasis added.]

Even though Amendment 59 initially discusses an increase in the value of taxable property in terms of the “taxing unit,” the above-quoted language indicates that the rollback is to occur when a taxing unit receives increased revenue from a particular tax source. Here, the taxing unit, the Fountain Lake School District, received a 28.8% increase in its tax revenue from that tax source made up of district residents residing in Saline County. Under the plain language of Amendment 59, a rollback of taxes was designed to prevent the Fountain Lake School District from receiving the entire 28.8% increase from the Saline County residents. The majority goes a step further, however, and erroneously concludes that members of the taxing unit that have not contributed to the increased revenue, i.e., Garland County residents, must be allowed to share in any rollback of taxes simply by virtue of the fact that they were fortunate enough to reside in that particular taxing unit. Clearly, such a result was not intended by the drafters of Amendment 59.

In another attempt to validate its erroneous conclusion in this matter, the majority relies on Article 16, § 5, of the Arkansas Constitution for the proposition that the school district must apply a uniform rate of taxation throughout the school district. While I do not necessarily agree with the majority that Article 16, § 5, clearly stands for such a proposition, I do not wish to debate the issue because the more pressing problem with the majority’s analysis is the fact that the majority is allowing a group of people with no cause of action against any of the defendants be certified as members of this class.

The majority states that the Garland County residents are interested parties simply because they reside in the taxing unit. In so holding, the majority is effectively undermining the purpose of Article 16, § 13, of the Arkansas Constitution. Section 13 provides that any citizen may file suit on his behalf and all others interested to protect against the enforcement of any illegal exactions. The majority concludes that the residents of Garland County are “interested parties” simply because they reside in the school district, not because they require protection from the enforcement of an illegal tax. On the contrary, the residents of Garland County make no allegations that they have been subjected to any type of illegal exaction. I am mindful of the fact that this court has stated that class actions filed pursuant to Article 16, § 13, arise as a matter of law, but I am certainly unaware of any instance when this court has allowed a party with no cause of action to proceed. Even in light of this court’s liberal interpretation of “interested parties” it is nonsensical to conclude that the Garland County residents have any interest at this stage of the proceedings.

This court has previously distinguished between the two types of illegal-exaction claims that may arise under Article 16, § 13: public-funds cases and illegal-tax cases. Ghegan & Ghegan, Inc. v. Weiss, 338 Ark. 9, 991 S.W.2d 536 (1999). In a suit involving an illegal tax, as is the situation here, the plaintiff asserts that the tax itself is illegal or contrary to a constitutional or statutory provision. Id. Here, the allegation that the tax is illegal stems from the fact that there was a countywide reappraisal with no subsequent rollback. Clearly, under Article 16, § 13, “interested parties” are those citizens subjected to an illegal exaction. Because the Garland County citizens make no allegation that they have been subjected to any illegal exaction, I believe that they are not interested parties within the meaning of Article 16, § 13. Therefore, they lack standing in the present matter and should not be allowed into this class.

Essentially, the majority is creating a cause of action for the Garland County residents where one does not exist. Acting pursuant to a directive in Amendment 59 that they establish procedures governing the rollback of taxes, the General Assembly provided a method for effectuating a rollback in fringe school districts. In light of this provision, it is clear that the proper course of action in the present matter is to leave the class as it is, made up of those district residents subjected to a countywide reappraisal, and allow them to proceed with their claim for an illegal exaction. If the class prevails, and the school district then rolls back the millage rate for only thos.e district members residing in Saline County, then the Garland County residents may assert their own claim that they are being taxed at a differing rate in violation of Article 16, § 5. As it stands now, the Garland County residents do not have a cause of action and should not be allowed to join this class. Allowing the residents of Garland County to join this suit will result in nothing more than the addition of superfluous parties and confusion of the facts and issues at the trial level.

For the foregoing reasons, I respectfully dissent.

Brown, J., joins.