People ex rel. Manifold v. Wabash R. Co.
| Decision Date | 19 March 1945 |
| Docket Number | No. 28219.,28219. |
| Citation | 59 N.E.2d 795,389 Ill. 403 |
| Parties | PEOPLE ex rel. MANIFOLD, County Collector, v. WABASH R. CO. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Hancock County Court; J. Arthur Baird, Judge.
Proceeding by the People, on the relation of A. R. Manifold, County Collector of Hancock County, against the Wabash Railroad Company to recover delinquent taxes. From an order sustaining defendant's objections to a judgment for delinquent taxes, relator appeals.
Reversed and remanded, with directions.
Samuel Joseph Naylor, State's Atty., of Carthage, for appellant.
John W. Williams and Homer H. Williams, both of Carthage, and L. H. Strasser, of St. Louis, Mo., for appellee.
This is an appeal from an order of the county court of Hancock county sustaining objections of the appellee, the Wabash Railroad Company, to judgment for delinquent taxes. The taxes involved are the road and bridge tax of the townships of Montebello, Chili and Prairie, in said county. There is also involved a levy made by the city of Carthage for judgment refunding bonds at a rate in excess of 67 cents extended for corporate purposes. This objection was also sustained by the trial court.
The issue involved in the road and bridge tax is substantially the same in each of the townships. Each township adopted a budget ordinance in accordance with the provisions of the Municipal Budget Law. Ill.Rev.Stat.1943, chap. 120, pars. 365.1-365.5. This ordinance fixed the fiscal year of the townships as beginning on March 31 of the year 1942 and extending to March 29, 1943. They were prepared upon a form furnished by the Illinois Tax Commission. Section 3 of this form embodies what is designated as an Annual Appropriation Ordinance. This ordinance and budget was adopted June 30, 1942, and after its adoption the several highway commissioners in September, 1942, made certificates of levy for the 1942 road and bridge taxes on a form furnished by the tax commission.
Using the facts involving the town of Montebello as an example, the estimated receipts, including the money on hand, money to be received from the 1941 levy when collected, and rental of machinery, amounted, in all, to $3,721.81. The amount of the 1941 taxes available was determined by estimating the net amount after deducting the share of a city or village in the township. The estimated expenditures were for the fiscal year and aggregated $3,700, showing an operating balance of $21.81. These were followed by an appropriation for road and bridge purposes for said fiscal year, of a total of $3,700. Among the sums appropriated was that of maintenance of roads in the sum of $2,000. The certificate of levy for the taxes of 1942 was $9,354.71, and among the uses specified was maintenance of roads $5,800. The objection was made to the difference of $3,800 between the maintenance of roads item in the levy of $5,800 and the maintenance of roads item in the so-called budget in the sum of $2,000, and sustained by the court. It is to be noted that in the estimate of receipts from the taxes of 1941 the city or village share in the sum of $3,390 was deducted.
It was the contention of the objector that the budget and appropriation ordinance was a limitation upon the amount of tax that could be levied by the highway commissioners, and any levy in excess of the appropriation is void, and that a levy made for an item for which no appropriation appeared is also void. The appellant contends that, in the case of road and bridge taxes, the law has never required an appropriation ordinance as a basis of a valid tax levy; that the Municipal Budget Law, when construed with the road and bridge laws, should not be considered as changing its requirement, and also contends that a provision of the Municipal Budget Law provides that a failure to comply with it does not affect the validity of a tax otherwise valid. Ill.Rev.Stat.1941, chap. 120, par. 365.4.
Appellant also contends the budget and appropriation ordinance is for a different year than the year in which taxes levied are to be expended; that the budget pertains to the year commencing March 31, 1942, and ending March 29, 1943, whereas the tax levy objected to is for a calendar year beginning January 1, 1942, and ending December 31, 1942, and hence the budget and appropriation cannot be a limitation upon taxes levied for a different period of time.
In each of the townships involved the Commissioner of Highways was operating on a cash basis, and not on a deferred or deficit basis. Section 3 of the Budget Statute provides the budget may be made according to whether the municipality is operating upon a cash or a deficit basis. Since the decisions of City of Springfield, v. Edwards, 84 Ill. 626,Law v. People ex rel. Huck, 87 Ill. 385, and Fuller v. Heath, 89 Ill. 296, the terms ‘cash basis' and ‘deficit basis,’ as applied to operating from tax revenue, have a well understood meaning. Taxes for road and bridge purposes are levied in September of the calendar year for which expenditures are to be made. Owing to other statutory proceedings, preliminary to collection, taxes so levied are not actually collected until some time in the following calendar year. If sufficient cash is not on hand the expenses of the municipality are paid by anticipating, i. e., by assigning a part of such taxes so levied for ready money to discharge current bills, or, in many instances, the tax warrant itself is delivered in discharge of the bill. This is known as a deficit basis, and has received approval in the above cases.
The cash basis, on the other hand, means that current expenses for a calendar year are paid from the proceeds of taxes of former years or...
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