Green v. Lebanon R-III School Dist.

• Decision Date: 07 March 2000
• Docket Number: R-II,R-III
• Citation: 13 S.W.3d 278
• Parties: (Mo.banc 2000) . Calton C. Green, et al., Appellants, v. LebanonSchool District, et al., Respondents. (Consolidated with) Liston King, et al., Appellants, v. Morgan CountySchool District, et al., Respondents. Case Number: SC81758 & SC81746 Supreme Court of Missouri Handdown Date: 0
• Court: Missouri Supreme Court

13 S.W.3d 278 (Mo.banc 2000)

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

Calton C. Green, et al., Appellants, v. Lebanon R-III School District, et al., Respondents.

(Consolidated with)

Liston King, et al., Appellants, v. Morgan County R-II School District, et al., Respondents.

Case Number: SC81758 & SC81746

Supreme Court of Missouri

Handdown Date: 03/07/2000

Appeal From: Circuit Court of Laclede and Morgan Counties, Hon. James A. Franklin, Jr.

Counsel for Appellant: Craig S. Johnson and Matthew D. Turner

Counsel for Respondent: Alex Bartlett, Nancy Ripperger and G. Stanley Moore

Opinion Summary:

Taxpayers, owners of real property in the Lebanon R-III and Morgan County R-II School Districts, challenge the operating levies of their school districts for certain years, contending the schools erroneously determined the highest rate of tax they could levy without additional voter approval, resulting in a tax rate that violated section 137.073 and the Missouri Constitution article X, section 22(a). The circuit court entered summary judgment for the schools.

AFFIRMED IN PART, REVERSED IN PART; REMANDED.

Court en banc holds: (1) Article X, section 22(a) required annual adjustments to the "maximum authorized current levy" under certain circumstances. The schools had the burden, but failed, to establish that they were not required to make annual adjustments to the maximum authorized current levy under article X, section 22. As a consequence, they did not meet their burden to show that the maximum authorized current levy they alleged was correct under article X, section 22.

(2) The section 137.073 tax rate ceiling applies to all political subdivisions but contains an option for school districts in setting the levy. The levy did not violate section 137.073 in 1994, 1995, or 1996. Amendments in 1996 changed the analysis. The schools had the burden, but failed, to establish that they were not required to adjust the tax ceiling under section 137.073 for 1997 and 1998.

(3) On remand, the court may determine whether refunds are permitted as a matter of law for each of the years in question and whether requests for refunds were properly and timely asserted.(4) Constitutional amendment Number 2 does not apply. The schools set the 1998 levies and the levies became official before the effective date of the amendment.

(5) It is the entire process of selecting the levy rate upon which this Court focuses in determining whether the school board members are entitled to official immunity, not merely the act of determining the highest lawful levy. No legal mandate prevents the board from exercising judgment regarding the levy rate that is ultimately set. The board members rightly claimed official immunity.

Calton Green Separate Opinion Summary: The separate opinion concurs in the principal opinion providing a clarification of the setting of school tax rates. The separate opinion notes that, ordinarily, the Court should not address issues left open and not briefed by the parties, and that the decision leaves open whether any remedy, on remand, would include refunds where no timely challenge has been filed. The separate opinion author would address the issues to be helpful in bringing about a swift and correct conclusion. This opinion reviews the Hancock Amendment and statutory scheme to conclude that if, as it appears, the lawsuits were not filed before the taxes became payable -- December 31 of the tax year -- refunds are not available.

Opinion Author: Ann K. Covington, Judge

Opinion Vote: AFFIRMED IN PART, REVERSED IN PART; REMANDED. Limbaugh, White, Holstein and Benton, JJ., concur; Price, C.J., concurs in separate opinion filed; Wolff, J., concurs in separate opinion filed.

Opinion:

Calton C. Green, et al., and Liston King, et al. (the taxpayers),¹ owners of real property in the Lebanon R-III and Morgan County R-II School Districts, brought suit to challenge the operating levies of the school districts (the schools) for the years 1994, 1995, 1996, 1997, and 1998. The taxpayers contend that the schools erroneously determined the highest rate of tax they could levy without additional voter approval, resulting in a tax rate for each of the years at issue that violated provisions of section 137.073, RSMo,² and article X, section 22(a) of the Missouri Constitution. The taxpayers asked the court to declare the schools' levies unlawful, requested injunctive relief requiring the schools to return excessive funds, and sought damages. The taxpayers named as additional defendants various county officials within each school district and certain members of the two school boards in their individual capacities. The circuit court dismissed the individually named school board members. The circuit court entered summary judgments in favor of the schools and, in the alternative, sustained the schools' motions to dismiss for failure to state a claim. The judgments are affirmed in part and reversed in part and the causes remanded. The appeals are consolidated because of common issues of law and fact.

As a preliminary matter, certain explanations are helpful with respect to the opinion in general. To the extent that there exist methods of calculating more than one tax rate "ceiling" or "lid," this Court uses the term "highest lawful levy" to describe that rate above which a school district may not levy, taking into account all relevant ceilings or lids under Missouri law. A tax levy is an amount owed for each $100.00 of assessed property valuation. The state auditor is charged with verifying that a school district's highest lawful levy for each year complies with section 137.073, RSMo. See section 137.073.6, RSMo. The state auditor developed a set of forms for the benefit of school districts to determine the highest lawful levy in a manner purportedly consistent with both section 137.073, RSMo, and article X, section 22. See 15 CSR 40-3.100.³ The Missouri State Board of Education publishes its own separate listing of maximum levy amounts for each year in the annual Report of the Public Schools of Missouri. See section 161.092(10), RSMo.

The remaining facts relevant to this case are derived from the pleadings. The taxpayers' petitions rely upon the state auditor's results. The taxpayers allege that the highest lawful levy for the Lebanon R-III School District should have been: $2.16 in 1994, $2.19 in 1995, $2.20 in 1996, $1.98 in 1997, and $1.99 in 1998. In those years, the taxpayers claim the Lebanon R-III School District exceeded the established limits by imposing the following levies: $2.75 in 1994, 1995, and 1996; $2.61 in 1997; and $2.62 in 1998. Similarly, the taxpayers allege that the highest lawful levy for the Morgan County R-II School District should have been: $2.13 in 1994, $2.19 in 1995, $2.17 in 1996, $2.02 in 1997, and $2.04 in 1998. In those years, the taxpayers allege that the Morgan County R-II School District exceeded the established limits by imposing the following levies: $2.75 in 1994, 1995, and 1996; and $2.55 in 1997 and 1998.⁴ The schools assert, using the state board's amounts, that the highest lawful levy for all of the relevant years was $3.59 for the Lebanon R-III School District and $3.15 for the Morgan County R-II School District.

At issue in the taxpayers' first point on appeal is the method for determining the highest lawful levy that a school board may approve, taking into account the terms "maximum authorized current levy," as used in article X, section 22(a) of the Missouri Constitution, and "tax rate ceiling," as used in section 137.073.1(3), RSMo.⁵

Article X, section 22(a) of the Missouri Constitution, a portion of the constitution commonly referred to as the "Hancock Amendment," provides:

(a) Counties and other political subdivisions are hereby prohibited from levying any tax, license or fees, not authorized by law, charter or self-enforcing provisions of the constitution when this section is adopted or from increasing the current levy of an existing tax, license or fees, above that current levy authorized by law or charter when this section is adopted without the approval of the required majority of the qualified voters of that county or other political subdivision voting thereon. If the definition of the base of an existing tax, license or fees, is broadened, the maximum authorized current levy of taxation on the new base in each county or other political subdivision shall be reduced to yield the same estimated gross revenue as on the prior base. If the assessed valuation of property as finally equalized, excluding the value of new construction and improvements, increases by a larger percentage than the increase in the general price level from the previous year, the maximum authorized current levy applied thereto in each county or other political subdivision shall be reduced to yield the same gross revenue from existing property, adjusted for changes in the general price level, as could have been collected at the existing authorized levy on the prior assessed value.

Only the last sentence of article X, section 22(a) is at issue in this case. It requires annual adjustments to the "maximum authorized current levy" under certain circumstances, taking into account the finally equalized assessed valuation of property, the value of new construction and improvements, and the increase in the general price level. The maximum authorized current levy under article X, section 22(a) is the higher of the amount in effect at the time that section was adopted, November 4, 1980, or the highest amount approved by the voters since that date.

The schools, being the movants, bear the burden of establishing a right to summary judgment. ITT Commercial Fin. Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993).⁶ In response to the taxpayers' article X, section 22 claim, the schools, in their motions for summary judgment, merely...