City of Owensboro v. Sweeney

• Decision Date: 17 June 1908
• Citation: 111 S.W. 364,129 Ky. 607
• Parties: CITY OF OWENSBORO v. SWEENEY.
• Court: Kentucky Court of Appeals

111 S.W. 364

129 Ky. 607

CITY OF OWENSBORO v. SWEENEY.

Court of Appeals of Kentucky.

June 17, 1908

Appeal from Circuit Court, Daviess County.

"To be officially reported."

Action by the city of Owensboro against James J. Sweeney to enforce a lien for special assessments for street sprinkling. From a judgment of dismissal rendered on sustaining a general demurrer to the petition, plaintiff appeals. Affirmed.

Act March 21, 1906 (Laws 1906, p. 376, c. 94), amends Ky. St 1903, § 3290, defining the powers of the council of cities of the third class, by adding thereto a subsection as follows "To provide for sprinkling the streets and public ways of said cities, by employes of the city, or by contract, and to assess the cost thereof by the front foot, against the lots and grounds abutting thereon, and the same and cost of assessment shall be a lien on the abutting property, to be collected by the city tax collector in same manner as city taxes, and may divide cities into sprinkling districts if deemed necessary."

Hobson Barker, and Lassing, JJ., dissenting.

Geo. W Jolly, for appellant.

W. T. Ellis, C. M. Finn, Miller & Todd, and C. S. Walker, for appellee.

CARROLL J.

The only question we need consider in this case is: Has the General Assembly of the state the power to enact a law giving cities the right to adopt ordinances imposing upon property abutting upon the streets and public places of the city a tax based upon the frontage of the property for the purpose of defraying the cost of sprinkling the streets and public places upon which the property abuts?

It has been expressly ruled by this court in Maydwell v. Louisville, 116 Ky. 885, 76 S.W. 1091, 63 L.R.A. 655, 105 Am.St.Rep. 245, that an ordinance enacted in pursuance of legislative authority levying an ad valorem tax upon property for the purpose of sprinkling the streets is not unconstitutional. The opinion was rested upon the ground that the sprinkling of streets contributes to the preservation of the public health, and hence the tax levied was for public purposes within the meaning of section 171 of the Constitution, providing that "taxes shall be levied and collected for public purposes only." The reasoning of that opinion, and the conclusion therein reached, we adhere to; but there is, as we shall endeavor to show, a marked difference in principle between laying a distinct tax for this purpose upon all property of a city, or upon all of the property in a taxing district if the city is divided into taxing districts, and levying a special tax upon real property according to its frontage. In the case before us, the tax is not levied upon property according to its value. The value of the property is not taken into consideration. Nor is the tax apportioned to correspond with the benefits received. A vacant lot, with a frontage of 50 feet, and worth only $100, must pay the same amount of taxes as a highly improved lot, with the same frontage, but worth $100,000. There seems to be something radically wrong with a tax that is arbitrarily assessed without any reference to the value of the property or benefits conferred, and, although it is everywhere recognized that perfect equality in taxation is impossible of attainment, the fundamental theory upon which all property taxes are imposed is that the property shall contribute in proportion to its value, and thus bear as near as may be its equal share of the burden. And this theory of equality and uniformity is firmly fixed in the tax laws of this state. In more than one section of the Constitution it is clearly expressed that taxes shall be uniform upon all property subject to taxation within the territorial limits of the authority levying the tax, and shall be assessed at its fair cash value, estimated at the price it would bring at a fair voluntary sale. But it is generally agreed that these principles, conceded to be sound, only apply to taxes collected for the purpose of defraying the expenses made necessary in the conduct of the governmental affairs of a city, and have no application to special taxes assessed for improvements, such as streets, sidewalks, gutters, and sewers. It is recognized by all the courts, including our own, that a municipality may lay a tax upon abutting land for purposes of local improvement, and the tax may be assessed according to the frontage of the property without regard to its value. Gosnell v. City of Louisville, 46 S.W. 722, 20 Ky. Law Rep. 519; Dillon on Municipal Corporations, § 752. This manner of assessment and taxation in many instances works a gross injustice upon the property owners, as under it a vacant lot practically worthless may be burdened with the same tax as an adjacent highly improved and valuable lot. But, as this method of taxation under legislative authority has now become too firmly established to even question its soundness, all that remains for the courts is to restrain the power within proper and reasonable limits, and this restrictive supervision is made necessary by the growing disposition of municipal bodies to extend it to embrace many subjects not contemplated in its origin.

The question of municipal taxation is one of the most important and intricate public questions of the day. Municipal authorities as a rule are disposed to be liberal in the imposition of taxes, and do not seem disturbed by the ever increasing burden of indebtedness that is accumulating upon the cities of the country. Fortunately, the Constitution of this state has placed a check upon the extravagant expenditure of public moneys and has fixed a limit beyond which a general property tax for public purposes cannot go unless assented to by the voters at an election held for that purpose. But this valuable and salutory limitation would afford little protection if, under the guise of improving property, special taxes might be levied without let or hindrance, and without regard to the constitutional limitations which do not apply to this method of taxation. If the right to lay these special assessments can be extended to embrace any subject which the municipal authorities, with the aid of the Legislature, deem it expedient to reach, it will soon come to pass that the wise safeguards of the Constitution will afford slight security to the taxpayer. To evade them, it will only be necessary for the municipal authorities to place the burden upon abutting owners under the pretense that it is an improvement tax, and hence may be charged in addition to the property tax imposed. Under this plan or scheme, should it be held allowable, if the general property tax in a city has reached the limit, and no larger sum can be gathered from this source, the city council may, by charging some of the current expenses of the city to abutting owners, divert to other uses the amount theretofore expended for this purpose out of the property tax collected. To illustrate, if the cost of maintaining the police department of a city is $10,000, and this sum has been paid out of the revenue derived from a general property tax, and the Legislature can give the city the right to charge this item of expense against the abutting property owners, upon the ground that it is conferring a special benefit upon them in the preservation of the peace, order, and quiet of the city, then this $10,000 may be applied to other purposes. And so, if the fire department cost annually $20,000, and the city had appropriated this sum from the general revenue collected, it could, if so authorized, charge it against the property owners, and thus have this additional sum to use in other ways. And thus the matter might be extended, until the taxation, general and special, upon real property, would far exceed the constitutional limit, and the property owners be helpless. If property can be charged under a special tax with the expense of sprinkling the streets upon the ground that it is an improvement, beneficial to the property, we see no reason why it may not be charged with the cost of maintaining the fire department, the police department, and the water and lighting system of the city, as it is more important that the city should have police and fire protection and a supply of water and light, than that the streets should be sprinkled. Indeed, there is more force and propriety in the argument that abutting property would receive benefits from police, fire, water, and light than it would from sprinkling.

But, in answer to all this, the argument is made that, in the absence of constitutional limitation, the Legislature is supreme, and to its wisdom and discretion must be left the settlement of these questions. It is true there is no limitation in the Constitution upon the power to levy improvement taxes, nor definition of what an "improvement tax" is; but it does not follow from this that the Legislature is so absolutely supreme that its authority cannot be questioned. Arbitrary power exists nowhere in this republic. There is a line at which the power to tax and take for special assessments must stop. The only question is where to draw it and, in the character of tax under consideration, we may safely say that it must stop when it goes beyond real and substantial benefits to the abutting property, distinct from those enjoyed by the public. The theory upon which special taxes are sustained is that the property assessed receives special benefits in addition to those received by the community at large. "This," says Dillon in his work on Municipal Corporations, in section 761, "is the true and only just foundation upon which local assessments can rest. And to the extent of special benefits, it is everywhere admitted that the Legislature may authorize local taxes or assessments to be made." Gooley on Taxation, § 1153, lays it down that: "There can be...