In re Limitation of Taxation

• Decision Date: 14 January 1893
• Citation: 54 N.W. 417,3 S.D. 456
• Parties: In re LIMITATION OF TAXATION.
• Court: South Dakota Supreme Court

54 N.W. 417

3 S.D. 456

In re LIMITATION OF TAXATION.

Supreme Court of South Dakota

January 14, 1893

An opinion of the judges of the supreme court as to the limits of taxation under the constitution of South Dakota.

Supreme Court Chambers.

Pierre January 14, 1893.

His Excellency, C. H. Sheldon, Governor of South Dakota.

Sir: We have the honor to acknowledge the receipt of your communication under date January 7, 1893, in which you propound the following question for our consideration, viz Has the legislature the constitutional power to provide by law for a tax, under any circumstances, in excess of two mills on each dollar of the assessed valuation of all taxable property in the state? In answer to which we would respectfully submit the following:

Article 11, § 1, of the constitution, under the head of "Revenue and Finance," provides that "the legislature shall provide for an annual tax sufficient to defray the estimated ordinary expenses of the state, for each year, not to exceed in any one year two mills on each dollar of the assessed valuation of all taxable property in the state, to be ascertained by the last assessment made for state and county purposes; and whenever it shall appear that such ordinary expenses shall exceed the income of the state for such year, the legislature shall provide for levying a tax for the ensuing year, sufficient, with other sources of income, to pay the deficiency of the preceding year, together with the estimated expenses of such ensuing year; and for the purpose of paying the public debt the legislature shall provide for levying a tax annually, sufficient to pay the annual interest and the principal of such debt within ten years from the final passage of the law creating the debt provided, that the annual tax for the payment of the interest and principal of the public debt shall not exceed in any one year two mills on each dollar of the assessed valuation of all taxable property in the state, as ascertained by the last assessment made for the state and county purposes." This section relates to three different and distinct items of taxation: First, the annual tax for defraying the estimated ordinary expenses of the state; second, taxes to pay deficiencies existing from preceding years; third, taxation for the purpose of paying the public debt. For the payment of the estimated ordinary expenses of the state the tax shall not exceed in any one year two mills on the dollar of the assessed valuation of all taxable property as shown by the last preceding assessment. It will be observed that the first and primary duty imposed upon the legislature by this section is to provide by annual tax for the "estimated ordinary expenses of the state," and this tax must not exceed a two-mill rate. This provision presupposes that a careful estimate will be made of the amount required to meet the necessary and ordinary expenses of the state for the ensuing year, and that a two-mill tax would, in the opinion of the makers of the constitution, be sufficient, in general, to meet such expenses; but, in view of contingencies always possible, such as unanticipated expenses, inability, general or partial, from exceptional cause, of taxpayers to pay the taxes assessed against them, or inadvertence or error in judgment of those making the estimate, this provision limiting the rate to two mills was supplemented by further providing, in the second clause of said section, that, if the actual ordinary expenses of the state in any year had really exceeded its income, then that such deficit might be provided for by the legislature by requiring, if necessary, a levy for such purpose. It was, and is, doubtless, the theory of the constitution that a two-mill rate would ordinarily be sufficient to meet the current expenses of the state; and the additional provision, authorizing the legislature to provide for a deficiency, after it had actually occurred, was intended to be resorted to only in an exigency, and to save and protect the good name and credit of the state; but when such exigency really exists the legislature has power to meet it. This provision, however, does not extend beyond this deficiency. A deficiency must be shown to exist for

...