By Initiative Measure No. 64 (chapter 4, Laws of 1933, p. 47; Rem. 1933 Sup., § 11238-1),
". . . the aggregate of all tax levies upon real and personal property by the state, county, school district and city or town,"
cannot exceed forty mills on the dollar of assessed valuation, school districts being limited to ten mills of this aggregate. It being manifest that many of the municipal subdivisions affected by the act would, at the time of the passage thereof, be indebted upon outstanding warrants, a proviso was inserted to the effect that the limitation imposed should not prevent
". . . the levy of additional taxes to pay interest on, or toward the reduction at the rate provided by statute, of the principal of county, city, town or school district warrants outstanding at the time of the taking effect of this act: . . ."
It is, of course, manifest that the initiative measure would be workable only if the taxing bodies thereby affected could start their operations under the new law with clean slates and with their attention focused only on their future operations. If the money which they *Page 313 raise under the new system be appropriated to the payment of past indebtedness, the plan can result only in confusion. This the act recognizes by the proviso above referred to.
Outstanding warrants will, of course, be paid in order upon presentation, and a portion of the funds raised under the new law will be appropriated to the payment of warrants issued under the old. These outstanding warrants will then be paid, and whether or not any relief can subsequently be afforded by the enactment of a statute providing a "rate" within the terms of the proviso above referred to, will be a question which may present both practical and legal difficulties.
In my opinion, the mere fact that there is no statute providing the rate at which additional taxes over and above the amount provided for by the initiative measure may be levied for the purpose of reducing outstanding warrant indebtedness, does not deprive the tax-levying bodies of the right to levy such an additional tax for the purpose mentioned. The tax-levying body, in this instance school districts, had, prior to the adoption of the initiative, the right to levy taxes to pay outstanding warrants. The proviso preserves and continues this right. The fact that there is no statute providing a rate at which such tax shall be levied, does not render the entire proviso void. This situation simply calls for a holding that the words, "at the rate provided by statute," are, as the law now stands, ineffective for any purpose. The proviso, then, continues in the tax-levying bodies the right which they previously had to levy a tax to pay such of their warrants as were outstanding at the time of the adoption of the law.
It is the duty of the tax-raising bodies to provide in *Page 314 some manner for the raising of funds to meet such obligations, so that their debts may be paid and the new law may go into effect in accordance with its manifest intent. It seems to me that the levying of such additional taxes is in accordance both with the letter and the spirit of the law. In the absence of fraud or arbitrary action, the matter of the rate at which such taxes shall be levied must rest in the discretion of the tax-levying entities.
I accordingly dissent from the conclusion reached by the majority to the effect that the school districts' levies are invalid. I concur in the opinion on the other points thereby decided.
BLAKE, J., concurs with BEALS, C.J.