City of Joliet v. Bosworth

Decision Date01 October 1976
Docket NumberNos. 47976 and 48078,s. 47976 and 48078
Citation356 N.E.2d 543,1 Ill.Dec. 355,64 Ill.2d 516
Parties, 1 Ill.Dec. 355 The CITY OF JOLIET, Appellee, v. Kent BOSWORTH, County Treasurer, Appellant. The VILLAGE OF BARTONVILLE et al., Appellees, v. Edward T. O'CONNOR, County Treasurer, Appellant.
CourtIllinois Supreme Court

Michael M. Mihm, State's Atty., Peoria (Lyle W. Allen, Asst. State's Atty., of counsel), for appellant Edward T. O'Connor. Martin Rudman, State's Atty., Joliet (Nicholas E. Sakellariou, Asst. State's Atty., of counsel), for appellant Kent Bosworth.

David J. Walvoord and Thomas E. Leiter, Peoria (Kavanagh, Scully, Sudow, White & Frederick, and Leiter, Newlin, Fraser, Parkhurst & McCord, Peoria, of counsel), for appellees Village of Bartonville and Board of Education, City of Peoria, School District 150.

Raymond A. Feeley, Corp. Counsel, Joliet, for appellee City of Joliet.

Frank M. Pfeifer and Thomas W. Kelty, Springfield, for amicus curiae.

Paul E. Hamer, Northbrook, for amicus curiae Wheeling Trust & Savings Bank.

UNDERWOOD, Justice:

These consolidated appeals involve the question of the constitutionality of section 21a of 'An Act concerning fees and salaries, and to classify the several counties of this state with reference thereto' which provides that counties may bill each taxing district within the county for its proportionate share of the actual costs incurred by the county in extending and collecting taxes on behalf of all taxing districts. (Ill.Rev.Stat., 1974 Supp., ch. 53, par. 39a.) Suits for declaratory judgment challenging the validity of the statute were instituted in the circuit courts of Will and Peoria counties by certain taxing districts within those counties against the respective county treasurer in his capacity as Ex officio county collector. In each case, judgment was entered by the trial court holding the statute to be in violation of section 9(a) of article VII of the 1970 Constitution of Illinois. Direct appeals to this court have been taken by the defendant county treasurers pursuant to Supreme Court Rule 302(a).

The statute in question, which became effective October 1, 1974, provides:

'Each county collector, when authorized by an ordinance passed by the county board, shall determine the total actual costs to the county of extending and collecting taxes on behalf of taxing districts within the county and charge each taxing district its proportionate share of those costs. The proportionate share of a taxing district shall be determined by applying the same percentage to the actual total cost of extension (as determined by cost analysis by an independent auditing firm) as its extension (dollar amount) bears to the total extension (dollar amount). The resultant amount shall be billed to each taxing district after tax collections have been distributed to all taxing districts within the county. For purposes of this section, 'taxing district' includes the county.' Ill.Rev.Stat., 1974 Supp., ch. 53, par. 39a.

Pursuant to the foregoing statute, the Will County Board adopted the following resolution on May 21, 1975:

'RESOLUTION

RE: Implementation of 1% Charge

WHEREAS, in 1974 this County Board did adopt an Ordinance implementing House Bill 194 which authorized the County to recover its actual cost of extending and collecting taxes on behalf of all taxing districts, and

WHEREAS, an accounting firm was hired, in accordance with Section 4 of this Ordinance to provide the County with the cost analysis required by the legislation, and

WHEREAS, the report of the auditing firm has been submitted to the County Board and the cost of extending and collecting of tax bills, in accordance with House Bill 194 is determined to be $708,610.00, which places the cost at approximately 1% Of the 1973 Levy.

NOW, THEREFORE, BE IT RESOLVED (1) that the County Board approves the recommendation of Werner, Rogers and Maher placing the cost of extending and collecting taxes in Will County at 1% Of the total monies collected and (2) that the County Board hereby adopts from this date, that rate and orders the Treasurer to bill the taxing bodies their pro rated share.'

In accordance with the resolution, the treasurer of Will County billed the City of Joliet for $37,031.96 and the City of Joliet Road and Bridge District for $1,516.43 as each taxing district's proportionate share of the cost to Will County of the extension and collection of taxes in 1974.

Cause No. 47976 originated with the filing of a complaint for declaratory judgment and other relief by the City of Joliet against Kent Bosworth, treasurer of Will County, alleging Inter alia that the statute and the ordinance enacted pursuant thereto violated section 9(a) of article VII of the 1970 Constitution of Illinois, which provides:

'Compensation of officers and employees and the office expenses of units of local government shall not be paid from fees collected. Fees may be collected as provided by law and by ordinance and shall be deposited upon receipt with the treasurer of the unit. Fees shall not be based upon funds disbursed or collected, nor upon the levy or extension of taxes.'

It was alleged that the county was attempting to collect 'the office expenses of (a) units of local government' as well as a fee 'based upon funds disbursed or collected' and upon the 'levy or extension of taxes' contrary to the provisions of section 9(a). The complaint further alleged that citizens of the City of Joliet had been denied equal protection of the law and that implementation of the statute and the resolution violated the due process clauses of the Federal and State constitutions. At the conclusion of a hearing, the trial court entered an order declaring the statute and resolution invalid under the State and Federal constitutions, enjoining the defendant county treasurer from collecting any charges or bills for the costs of collecting taxes pursuant to the statute and resolution, and directing that the defendant return to various taxing bodies all monies which had already been collected for such purposes.

Cause No. 48078 is concerned with a similar implementing resolution adopted October 8, 1974, by the Peoria County Board which resulted in the county treasurer of Peoria County submitting bills to the various taxing districts in the county for their proportionate share of the total cost of extending and collecting 1973 taxes, including a bill to the Village of Bartonville for $1,015 and a bill to the Board of Education, City of Peoria, School District No. 150 for $167,670.

The Village and School District filed a complaint for declaratory judgment and injunctive relief in the circuit court of Peoria County against Edward T. O'Connor as treasurer and Ex officio collector of the County of Peoria alleging in count I that the statute and ordinance violated that portion of section 9(a) of article VII of the 1970 Constitution providing: 'Fees shall not be based upon funds disbursed or collected, nor upon the levy or extension of taxes.' A second count alleged the invalidity of the resolution in that it attempted to apply the statute retroactively to 1973 taxes collected prior to the passage of the resolution and prior to the effective date of the statute. After a hearing, the trial court found in favor of plaintiffs as to count I and entered an order declaring the statute and ordinance to be unconstitutional under the 1970 Constitution of Illinois, restraining future collection of costs or fees, and directing the return of all amounts theretofore collected by defendant under the ordinance and statute.

The defendant county treasurers argue on this appeal that section 21a of 'An Act concerning fees and salaries * * *' conforms with section 9(a) of article VII of the 1970 Constitution in that it eliminates the objection able 'skimming off' by the county collector of an arbitrary percentage which bore no relationship to the actual cost of billing and collecting taxes. They argue further that the charge to the taxing districts under section 21a is not 'based upon levy or extension of taxes' as proscribed by the Constitution since it is based on the actual cost to the county of providing tax collection services to the local taxing bodies. It is also urged that when the framers of the Constitution used the word 'fee' in section 9(a) of article VII they were thinking of a fixed charge rather than a charge based on actual cost.

Resolution of these questions requires reference to prior tax collection practices and the proceedings of the constitutional convention which drafted section 9(a). Prior to 1870, it was the practice in this State to give some local officials no salary but instead to permit them to keep the fees they collected from the public. This so-called 'fee office' system was reformed to some degree under the 1870 Constitution, which required that specified officials be compensated for their services by salary and that compensation of all county officials, including the necessary expenses of running the office, were to be established by the county boards of each county. (Ill.Const.1870, art. X, secs. 9, 10.) Fees continued to be the source for payment of such compensation, but the Constitution provided that all fees in excess of such compensation were to be paid into the county treasury. A number of inequities arose under this system, particularly with regard to fees charged for the collection of taxes by county and township collectors. At the time of adoption of the 1970 Constitution, county collectors were authorized to deduct a fee equal to 3% Of the taxes collected on behalf of various taxing bodies within the county (Ill.Rev.Stat.1969, ch. 53, par. 39), and township collectors had been allowed to deduct a 2% Commission from all moneys so collected (Ill.Rev.Stat.1969, ch. 53, par. 55.6). County clerks were also authorized to charge taxing districts 7 cents for each tax extension. (Ill.Rev.Stat.1969, ch. 53, par. 35.) These...

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