Bonnet v. State

• Decision Date: 11 February 1976
• Citation: 357 A.2d 772,141 N.J.Super. 177
• Parties: Harry BONNET et al., Plaintiffs, v. STATE of New Jersey et al., Defendants.
• Court: New Jersey Superior Court

Page 177

141 N.J.Super. 177

357 A.2d 772

Harry BONNET et al., Plaintiffs, v. STATE of New Jersey et al., Defendants.

Superior Court of New Jersey,

Law Division.

Feb. 11, 1976.

Page 189

William L. Brach, East Orange, for plaintiffs (Brach, Eichler, Rosenberg & Silver, East Orange, attorneys, William H. Eaton, Jersey City, on trial briefs)

Richard M. Conley, Deputy Atty. Gen., for defendants (William F. Hyland, Atty. Gen., attorney).

David G. Lubell, New York City, of the New York Bar, for intervenor League of Women Voters of N.J. (William J. Bender, Newark, attorney).

DWYER, J.S.C.

After the publication of the trial court's opinion in Robinson v. Cahill, 118 N.J.Super. 223, 287 A.2d 187 (Law Div.1972) ¹ and before the decision of the New Jersey Supreme Court in Robinson v. Cahill, 62 N.J. 473, 303 A.2d 273 (1973), ² the complaint in this action was filed.

The action is brought on behalf of seven separate classes of plaintiffs.

The essence of the complaint is that the present system of distributing fiscal burdens whereby the 21 counties are required to pay for the residual costs of operation of

Page 190

1. The County, County District and Juvenile and Domestic Relations Courts, as well as certain costs of the Law Division, Superior Court (count I);

2. The office of the prosecutor (count II);

3. The jury commissioners, including costs for grand and petit juries (count II);

4. The probation departments (count II), and

5. 12 1/2% Of the benefits paid under the federally assisted categorical welfare programs, plus the cost of administration thereof not paid by the Federal Government (count III),

denies to each of the seven classes of plaintiffs equal protection of the law and due process of law as guaranteed by the Fourteenth Amendment and the State Constitution.

Plaintiffs are separated into classes as follows: (1) all persons residing in Essex County (residents); (2) all persons paying real estate taxes in Essex County (taxpayers); (3) Essex County (county); (4) the 22 municipalities located within the county (municipalities); (5) all blacks residing within the county (Blacks) (count IV); (6) all low-income families residing within the county, who are defined as those receiving an income less than 125% Of the poverty level income (the poor) (count V), ³ and (7) all owners of real estate designed or intended to produce an income and which has been, or is about to be, foreclosed for nonpayment of real estate taxes (count VI).

The claims of residents, taxpayers, county and municipalities are based on the first three counts. Counts IV, V and VI contain allegations incorporating counts I to III plus an allegation that because the cost burdens are unduly concentrated in the county which has the greatest concentration of these respective groups, there is 'invidious' discrimination as to such groups. ⁴

Page 191

Count VII and count VIII relate to all classes and basically allege that since the taxes to defray such costs were being raised for state purposes under N.J.Const. (1947), Art. VIII, § I, par. 1 they had to be levied on a uniform basis throughout the State. Count IX alleges that all statutes in question are tax statutes which had originated in the Senate, instead of the Assembly, contrary to N.J.Const. (1947), Art. IV, § VI, par. 1.

The relief sought is an injunction against the collection of real estate taxes for the payment of these costs, even though the injunction would necessarily run against the county and municipalities.

The named defendants are: the State of New Jersey (State), the Governor and other heads of departments in the Executive Branch, the President of the Senate and the Speaker of the Assembly in the Legislative Branch, and the Administrative Director of the Courts in the Judicial Branch. The court will refer to them collectively as defendants.

The Administrative Director of the Courts filed a statement in lieu of answer in which he stated he would abide by the final judgment entered by the courts. The Attorney General filed an answer on behalf of all other defendants, admitting references to statutes and the Federal and State Constitutions but denying that a cause of action was stated.

Defendants moved to dismiss. The motion was denied. The Appellate Division affirmed, Bonnett v. State, 126 N.J.Super. 239, 313 A.2d 808 (1974), ⁵ and remanded for trial, nothing that in Robinson v. Cahill, supra, 62 N.J. at 500--501, 303 A.2d 273, the New Jersey Supreme Court had not foreclosed the possibility

Page 192

that there could be a cause of action under either the concept of equal protection of the law or under the concept of an implicit premise of local government that the State could not use local governments as a means to unfairly distribute its fiscal responsibilities.

It reminded plaintiffs that they had the burden of proof citing Ring v. North Arlington, 136 N.J.L. 494, 498, 56 A.2d 744 (Sup.Ct.1948), aff'd 1 N.J. 24, 61 A.2d 508 (1948). In terms of the rights asserted under the Fourteenth Amendment, plaintiffs also have the burden of proof as to federally protected rights, McGowan v. Maryland, 366 U.S. 420, 535, 81 S.Ct. 1101, 1194, 6 L.Ed.2d 393, 461 (1961).

A pretrial conference was held. Plaintiffs did not amend the complaint but added an issue that the present system of distributing the cost burdens for the above-mentioned services violated the implicit premise of local government. The State preserved its contentions that some of the plaintiffs had no standing to bring the action. The case was then assigned to this court for trial. The trial has been held and an extensive record developed, particularly in terms of stipulated exhibits.

Certain issues may be determined immediately. No evidence was submitted in support of count IX and it was dismissed at the conclusion of the trial without objection. In respect to the foreclosed, the class embraced in count VI, no representative appeared at trial and no evidence was introduced as to any specific piece of real property owned by any individual. Neither the pleadings nor the testimony of Dr. Sternlieb about economic effects of the tax rate on values of property identify with precision that class of owners of real property. Dr. Sternlieb is identified and his testimony is examined at section IV--B, Infra.

At the trial the tax collector for the City of Newark testified about Newark's extensive holdings of income-producing real estate as a result of foreclosure of tax liens. However, the need for extensive rehabilitation of many of the structures due to age is also obvious from such testimony.

Page 193

One structure required over $100,000 of masonry work to prevent its stone work from falling onto persons and vehicles using a major intersection. The testimony also indicates that a host of factors contributed to the conditions of the buildings that he testified about, other than the tax burdens imposed by the present system. The court finds that this testimony did not fill the void in the proof left by the representatives of the foreclosed. The court dismisses count VI for lack of proof.

Courts VII and VIII are premised upon what is now N.J.Const. (1947), Art. VIII, § I, par. 1(a), which provides:

Property shall be assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value, except as otherwise permitted herein, and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district.

The essence of count VII is found in paragraph 6 of that count which states:

* * * The Constitutional authorization is limited to distribution of state raised revenues and does not provide authorization or power to the State through the legislature to utilize local property taxes or to allocate costs through the counties to the municipalities as a means of supporting State services, functions and facilities, or discharging obligations and responsibilities of the state. * * *

The essence of count VIII is that under the aforesaid Article, taxes levied by a county or a municipality can only be levied and assessed locally 'for the use of such taxing district * * *' and that the statutes in question compel the levying and assessing of taxes for state purposes.

In respect to this provision of the State Constitution, in Robinson v. Cahill, supra, the Supreme Court said:

* * * the tax clause was not intended to say that a State function may not be delegated to local government to be met by local taxation.

Page 194

As we noted in Point I, local government is simply an arm of the State with respect to the many State functions which the State decides shall be performed through local government. The tax clause does not restrict the State with respect to that decision. Rather it means that if the State decides to handle a service at State level and to do so on the basis of a property tax, it must tax all taxable property in the State rather than only property in a part of the State; and that if the responsibility for the State function is assigned to local government, the local tax must fall uniformly upon all taxable property within the county or the municipality as the case may be. (62 N.J. at 502--503, 303 A.2d at 288).

The Supreme Court also held that the Article guaranteeing a thorough and efficient education to school children was not intended to, and did not, guarantee statewide equality to taxpayers in respect to taxes to pay for education.

Neither in the briefs submitted nor in argument after trial did counsel for plaintiffs state how the interpretation of the tax clause by the Supreme Court in Robinson v. Cahill, quoted above, is inapplicable in this case. There is no express provision in the State Constitution comparable to that found in constitutions of other states which bar a state from...