People ex rel. Walgenbach v. Chicago & N. W. Ry. Co.

• Decision Date: 19 August 1976
• Docket Number: No. 75--209,75--209
• Citation: 354 N.E.2d 42,41 Ill.App.3d 106
• Parties: Application of the PEOPLE ex rel. Audrey WALGENBACH, County Collector of McHenry County, Illinois, Plaintiff-Appellee, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY et al., Defendants-Appellants. *
• Court: United States Appellate Court of Illinois

Page 42

354 N.E.2d 42

41 Ill.App.3d 106

Application of the PEOPLE ex rel. Audrey WALGENBACH, County

Collector of McHenry County, Illinois, Plaintiff-Appellee, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY et al.,

Defendants-Appellants. ^*

No. 75--209.

Appellate Court of Illinois, Second District, First Division.

Aug. 19, 1976.

Kell & Conerty, Woodstock, Glaeser, Burstein & Gates, Dundee, Abbamonto & Szura, Cary, for defendants-appellants.

William J. Cowlin, State's Atty., Richard R. Cross, Asst. State's Atty., Woodstock, Lord, Bissell & Brook, Hugh C. Griffin, Chicago, for plaintiff-appellee.

HALLETT, Justice.

This is a suit brought by the tax collector of McHenry County to collect taxes levied against the objectors, who are taxpayers in that county. They challenged 1972 tax levies by High School District 155, alleging that it was attempting to 'accumulate and retain an unusually large balance and surplus over and above requirements'. The trial court, in a bench trial, found that the objectors had 'not sustained their burden of proof', that the levies 'were necessary for the proper function of the School District' and that 'the fund is not an excessive accumulation'. It therefore overruled the objections and this appeal followed. We affirm.

School District No. 155, McHenry County, Illinois, in 1972, made a tax levy of $2,522,122 for its Educational Fund and $404,225 for its Building Fund. The defendants when sued for delinquent taxes claimed that the education fund levy was excessive to the extent of $117,191 and the building fund levy was excessive to the extent of $349,882.42 (this figure even by the taxpayers own computations appears to be erroneous; the taxpayers in their pleadings labored under a misapprehension as to the amount of the actual levy extension for the building fund.) The taxpayers alleged in their objections that the building fund expenditures for the previous fiscal years had been $2,530,427.46; $2,970,990.33; and $3,325,588.64, the average cost of operations for one year, being $2,942,335.48, and that the estimated two year requirements at the time of the levy (which they computed as 105% Of twice the previous year's (1971--1972) expenditures) was $6,983,736. They further alleged that the fund net worth July 1, 1971, was $1,971,575.23, that the 1971 taxes in process of being collected was $1,961,246.17, and certain claims receivable were $645,982.72, and that subtracting these amounts from the estimated two-year requirements, the levy required for 1972 taxes for the education fund was only $2,404,931.

Similarly, they alleged that the expenditures for the building fund in the previous three fiscal years were, respectively, $417,573.20, $336,930.07, $366,697.74, the average cost of operations therefore being $373,733.67, and that the estimated two year requirements (based on 105% Of twice fiscal year 1971--1972's actual expenditures) was.$770,065. They further alleged that the fund net worth on July 1, 1971, was $253,449.02 and the 1971 taxes in process of collection were $355,321.40, and that subtracting these sums from the estimated requirements the levy required for 1972 taxes for the building fund was only $161,294.58.

There is absolutely nothing in the record to indicate that the taxpayers at any time introduced any evidence to support the allegations they had made or to show that their figures were either accurate or reasonable. (The taxpayers claim that there was a stipulation as to their accuracy but this does not appear in the record.)

Mr. Ackerman, the Business Manager of the School District testified that the estimated budget for the fiscal year 1972 was prepared before the 1972 levy request was prepared, that the budget was based on the best available estimates for expenditures and that this estimated budget was the best available figure in which to base the levy request. He also stated that because of the time between the tax levy and its collection the district exhausted its cash reserves in the Building Fund in both fiscal years 1972 and 1973 and had to borrow from the Working Cash Fund and also issue Tax Anticipation Warrants. Moreover, the District only receives about 98% Of the levy extension.

Mr. Froehlich, the accountant who supervised the preparation of the school district's financial statements, testified that the 'fund balance' is computed by taking the assets including taxes being collected less the liabilities. He also stated that the taxpayer's method of computation was unrealistic and inadequate because the actual expenditures vary from year to year (in 1972--1973 they were $3,463,217 and in 1973--1974, $3,851,834) and a 5% Allowance for inflation over a two year period was unrealistic. The 1972 tax levy was collected after July 1, 1973, and applied to operating expenses in the fiscal year ending June 30, 1974. The District's balance sheets reveal that in order to pay its Educational and Building Fund expenses during the 1973--1974 year (the year the 1972 levy was received) the District had to borrow $374,939 from the working cash fund and sell $145,000 of tax anticipation warrants; in 1972--1973 the figures were $293,141 and $200,000; in 1971--1972 $214,969.74 and $200,000.

The estimation of the amount required to meet the obligations of a taxing district is ordinarily committed to its reasonable discretion and the court will not interfere with the district's exercise of its sound business judgment except where there is a clear abuse of discretion. (People ex rel. Harding v. Chicago, North Western Ry. (1928), 331 Ill. 544, 163 N.E. 355; People ex rel. Schaefer v. New York, Chicago & St Louis Rd. (1933), 353 Ill. 518, 187 N.E. 443; People ex rel. Kramer v. Chicago, Burlington & Quincy Rd. (1956), 8 Ill.2d 382, 134 N.E.2d 335; People ex rel. Sweet v. Central Illinois Public Service Co. (1971), 48 Ill.2d 145, 268 N.E.2d 404.) The presumption is that the taxing body has properly discharged its duty and has not abused its discretion in making the levy (People ex rel. Harding v. Chicago & North Western Ry. (1928), 331 Ill. 544, 163 N.E. 355; People ex rel. Bergan v. New York Central Rd. (1946), 392 Ill. 525, 64 N.E.2d 895; People ex rel. Kramer v. Chicago, Burlington & Quincy Rd. (1956), 8 Ill.2d 382, 134 N.E.2d 335; People ex rel. Sweet v. Central Illinois Public Service (1971), 48 Ill.2d 145, 268 N.E.2d 404); and the burden is on the objectors to overcome this presumption and show a clear abuse of discretion (People ex rel. Harding v. Chicago & North Western Ry. (1928), 331 Ill. 544, 163 N.E. 355; People ex rel. Schaefer v. New York, Chicago & St. Louis Rd. (1933), 353 Ill. 518, 187 N.E. 443; People ex rel. Bergan v. New York Central Rd. (1946), 392 Ill. 525, 64 N.E.2d 895; People ex rel. Kramer v. Chicago, Burlington & Quincy Rd. (1956), 8 Ill.2d 382, 134 N.E.2d 335) by clear and explicit testimony. People ex rel. Stevenson v. Atchison, Topeka and Santa Fe Ry. (1913), 261 Ill. 33, 103 N.E. 614.

In this case, the objectors have failed to introduce any evidence at all. Unsworn allegations are not evidence. And even if they were, there is no evidence either as to the figures' accuracy or relevancy. The defendants base their estimates only on previous years' expenditures and fail to take into consideration the increased costs of maintaining and operating schools. (See People ex rel. Salm v. Crear (1921), 300 Ill. 611, 133 N.E. 287.) Conditions affecting financial needs vary from year to year and it is the duty of a taxing body to anticipate such changes and to provide for its needs in the light of the same. (People ex rel. De Rosa v. Chicago &...