Foss v. City of Rochester
| Decision Date | 06 June 1985 |
| Citation | 480 N.E.2d 717,491 N.Y.S.2d 128,65 N.Y.2d 247 |
| Parties | , 480 N.E.2d 717 David A. FOSS, Appellant, v. CITY OF ROCHESTER et al., Respondents. |
| Court | New York Court of Appeals Court of Appeals |
Plaintiff, owner of a four-family dwelling in the City of Rochester, commenced this action against the city, its assessor, the County of Monroe and the Rochester Pure Waters District, seeking a declaratory judgment invalidating section 305 and article 19 of the Real Property Tax Law and an injunction preventing defendants from assessing, levying and collecting taxes pursuant to them. He claims that the statutes are unconstitutional because they deprive him of rights to due process and equal protection of the law and because article 19 represents an unconstitutional delegation of the Legislature's taxing authority to local assessors. Plaintiff also challenges Rochester Local Law No. 6 of 1983, by which the city adopted the provisions of article 19, on the ground that pursuant to it his "non-homestead" property is taxed by Monroe County at a higher rate than "homestead" properties within and without the city and that it also results in his payment of higher county taxes than those paid by similar non-homestead properties in other parts of the county. Special Term denied plaintiff's motion for an injunction and granted defendants' cross motion for summary judgment declaring the challenged legislation constitutional. The Appellate Division, 104 A.D.2d 99, 481 N.Y.S.2d 191, affirmed and the matter is before us by right (see, CPLR 5601[b] ).
There should be a modification. Section 305 of the Real Property Tax Law is not void for vagueness in violation of constitutional due process notice requirements, and article 19 of that statute does not result in an unconstitutional delegation of legislative power. Article 19 and Rochester Local Law No. 6 of 1983 do, however, violate the equal protection clauses of the Federal and State Constitutions because they permit similarly situated properties to be taxed unequally.
It is helpful to place the challenged legislation in historical perspective. For over 200 years New York municipalities assessed real property at a fraction of full value notwithstanding the requirement of former section 306 of the Real Property Tax Law and its predecessors that it be assessed at its full value. The resulting assessments produced intraclass variations among similar properties in different locations and interclass variations among different types of properties. Because of the dramatic increase in the value of residential properties in recent years, without corresponding reassessments, residential properties gradually became assessed at a lower percentage of current market value than commercial properties and the burden of real property taxation shifted from owners of residential properties to owners of commercial properties. 1 A de facto dual system of taxation developed, a system which was tolerated and justified by some because residential owners could not pass the expense of additional taxes along whereas commercial and industrial owners could.
In 1975, we held that section 306 of the Real Property Tax Law required that all property be assessed at full value and that fractional assessments were, therefore, invalid (Matter of Hellerstein v. Assessor of Town of Islip, 37 N.Y.2d 1, 371 N.Y.S.2d 388, 332 N.E.2d 279. The Legislature, recognizing that full value reassessment would produce a dramatic shift in the local property tax burden away from nonresidential property owners to residential property owners, repealed section 306 and added the legislation before us on this appeal, a new section 305 explicitly permitting fractional assessment at a uniform percentage of value and article 19 (L.1981, ch. 1057). The provisions of article 19 permit a city or town which has undergone a revaluation of all its real property in compliance with standards imposed by the State Board of Equalization and Assessment to adopt a dual tax rate structure (Real Property Tax Law § 1901[d]; § 1903). Rochester, acting pursuant to these statutory provisions, revalued its property, had the revaluation approved by the State Board of Equalization and Assessment and enacted Local Law No. 6 of 1983 adopting the provisions of article 19. Beginning with the 1984-1985 tax year, it divided all property in the city into homestead properties (Real Property Tax Law § 1901[e][1][i] ) and all others (id. [ii] ) and taxed the two classes at different rates computed by using the statutory formulae.
Plaintiff instituted this action to challenge the tax imposed and asserted three causes of action. In the first, he alleged that the standard of assessment mandated by Real Property Tax Law § 305 "at a uniform percentage of value (fractional assessment)" is unconstitutionally vague because the word "value" as used in the statute could be construed to mean something other than full market value and because the statute does not specify a percentage or particular value at which property is to be assessed. In his second cause of action, he asserted that the statutory formula for calculating the homestead base proportion is an unconstitutional delegation of the legislative power to tax because the rate depends upon the roll prepared by the assessor in the year prior to revaluation. In his third cause of action, he claimed that application of article 19 to collect the county tax denies him equal protection of the law. Specifically, plaintiff alleged that there will be a higher county tax on non-homestead properties than homestead properties in the city, and a higher county tax on non-homestead properties in the city than against identical non-homestead properties in assessing units located in Monroe County outside the City of Rochester.
Plaintiff's first two causes of action were properly rejected by the courts below and do not require extensive discussion here. Real Property Tax Law § 305 is not impermissibly "vague" either because it permits assessments at less than full value or because it permits fractional assessments to be made without specifying a fraction. Due process requires only a reasonable degree of certainty so that individua of ordinary intelligence are not forced to guess at the meaning of statutory terms (Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322, see generally, Note, The Void-for-Vagueness Doctrine in the Supreme Court, 109 U. of Pa. L. Rev. 67). Section 305 satisfies that standard because plaintiff has notice by established judicial construction of the term "value" that it means "market value" (see, Matter of Hellerstein v. Assessor of Town of Islip, 37 N.Y.2d 1, 10, 371 N.Y.S.2d 388, 332 N.E.2d 279, supra; Stemmer v. Board of Assessors, 97 A.D.2d 979, 468 N.Y.S.2d 785) and because, even though the statute itself does not prescribe the uniform ratio by which all property is to be assessed, proof of such ratio is readily available in any certiorari proceeding based on valuation by use of the ratio found by the State Board of Equalization and Assessment (see, Real Property Tax Law § 720[3][b]; see also, Guth Realty v. Gingold, 34 N.Y.2d 440, 358 N.Y.S.2d 367, 315 N.E.2d 441). Moreover, plaintiff received ample, albeit constructive, notice of the value relied upon in this case when the city reassessed all property on its rolls at the uniform rate of full value. Finally, to the extent that plaintiff's first cause of action can be inferred to allege that the Constitution requires that all assessments must be made at full market value, it must also fail, because his property was assessed at full market value and because the former requirement of full value assessment was statutory, not constitutional (Matter of Hellerstein v. Assessor of Town of Islip, 37 N.Y.2d 1, 371 N.Y.S.2d 388, 332 N.E.2d 279, supra ).
Plaintiff's further contention that article 19 constitutes an improper delegation of legislative authority to tax is similarly without merit. The article does not, by its terms or otherwise, permit local assessing units to set tax rates. Rather, the Legislature has delegated the authority to tax to local legislative bodies, as it may, to be exercised by them within prescribed discretionary limits (e.g., Matter of Small v. Moss, 279 N.Y. 288, 295, 18 N.E.2d 281). Once the local legislature adopts the statute, the assessor may classify property into residential and commercial classes by partitioning them as they appeared on the previous years' assessment rolls. The decision to adopt article 19, however, and the permissible options for varying the base proportions (Real Property Tax Law § 1903[2][b][i], [ii] ) remain matters entrusted to the local legislative body.
Plaintiff's major complaint is the disparity in county taxes imposed upon homestead and non-homestead properties within the City of Rochester, and on his property and similar properties located outside the city. We agree that article 19 as applied in these circumstances results in invidious discrimination between non-homestead properties in Rochester and like properties in other parts of the county and denies plaintiff equal protection of the laws. Our analysis proceeds from a general review of real property assessment theory to the procedure implemented by adoption of article 19 and finally to the reasons for our conclusion that the challenged legislation is unconstitutional when applied because it impermissibly creates geographic classifications resulting in unequal tax treatment of similarly situated...
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