Rapid City Area School Dist. No. 51-4 v. Pennington County Auditor, Helen Daughenbaugh, 12897
| Decision Date | 02 October 1979 |
| Docket Number | No. 12897,12897 |
| Citation | 284 N.W.2d 308 |
| Parties | RAPID CITY AREA SCHOOL DISTRICT NO. 51-4, Petitioner, v. PENNINGTON COUNTY AUDITOR, Helen Daughenbaugh, Pennington County Board of Equalization, and Warner Hickey, Neil Van Sickle, Lloyd St. Pierre, Leo Hamm, Lloyd Rypkema, and Helen Daughenbaugh, Individually and as Members constituting the Pennington County Board of Equalization, Respondents. |
| Court | South Dakota Supreme Court |
Wynn Gunderson, of Gunderson & Palmer, Rapid City, for petitioner.
James H. Wilson and Gordon Verne Goodsell, of Wilson, Bottum, Olson, Goodsell & Nash, Rapid City, for respondent, Pennington County.
This unfortunate confrontation pits the Rapid City Area School District No. 51-4 (school board) against the Pennington County Board of Commissioners sitting as a county board of equalization (county board) in a contest to ascertain which entity is to determine the fiscal requirements of the Rapid City School District. The Pennington County Auditor is caught in a crossfire. Subsequent to the school board's adoption of a proposed budget for 1979-80 school year, the county board met and lowered the taxable percentage of true and full value for the county from forty percent in the previous year to thirty percent. This action resulted in a shortfall of $293,117.00 to the school board's budget. Upon application of the school board to this court, an alternative writ of mandamus issued directing the county board to set a percentage of true and full valuation to be applied against the taxable property of their county such as would be sufficient to meet the budget of the school board and further directing the county auditor to spread a levy in mills over the taxable property of the school district sufficient to raise the money requested subject to legal mill levy limitations. The county board and auditor having made their return on the alternative writ and the court having considered the same and having heard the argument of counsel, we dissolve the writ directed to the county board, and direct the county auditor to spread the levy based on sixty percent of true and full valuation for the determination of the levy computation.
Before proceeding with a discussion of the merits, it will be helpful to outline, in general terms, South Dakota's statutory assessment and equalization procedure.
Every county is authorized to appoint a county director of equalization whose function is to determine the value of all taxable property within the county. See SDCL 10-3. After all real and personal property is valued at its true and full value in money (SDCL 10-6-33), the director is to list the property and deliver the assessment rolls to local boards of equalization not later than the fourth Monday in May. SDCL 10-3-28.
These local boards are statutorily directed to meet on the fourth Monday of May "for the purpose of equalizing the assessment of property in each township, town or city, and such equalization board shall immediately proceed to examine, ascertain, and see that all taxable property in the respective township, town, or city has been properly placed upon the assessment roll and has been duly valued by the assessor." SDCL 10-11-13. Then, on or before the first Monday of June, the clerk of the township, town or city equalization board is to deliver the assessment roll to the director of equalization, certifying that the assessment roll is correct and should be accepted by the board of county commissioners. SDCL 10-11-21. According to SDCL 10-11-25, the county commissioners, along with the county auditor, are to constitute the county board of equalization of the assessment of property. Sitting as the board of equalization, these officials are to hear appeals, determine the percentage of true and full value to be used as taxable value, and equalize assessments of property. SDCL 10-11-25. In determining the taxable percentage, the board of equalization is limited by SDCL 10-6-33 which provides that no more than sixty percent of the true and full value may be considered taxable value upon which the levy shall be made and applied and taxes computed. Prior to 1977, this statute gave no discretion to the board in determining the taxable percentage, providing simply that sixty percent was to be the taxable percentage in all cases. The county board of equalization is to meet annually on the third Tuesday in June and may adjourn no later than the first Tuesday in July to carry out these duties. SDCL 10-11-25.
The county director of equalization is then to calculate any changes made by the county board of equalization and make abstracts of the real and personal property lists and forward copies to the department of revenue on or before the third Monday of July. SDCL 10-11-41.
At the same time this process of assessment and equalization is proceeding, the school districts are formulating their budgets. According to SDCL 13-11-2, the school board is to develop a proposed budget for the next fiscal year to be prepared for consideration at the regular May meeting. This proposed budget is to be published in an official newspaper not later than July 15 together with notice of a hearing on the budget. This hearing must be held before August 1. Then, prior to September 1, the school board must approve a budget and, by resolution, must adopt a levy in dollars sufficient to meet the budget. This levy must be reported to the county auditor by September 1. SDCL 10-12-29. The amount of the levy must be certified to the county auditor on or before the first day of October. SDCL 10-12-7. The county auditor must then spread a levy in mills over the taxable property of the school district sufficient to raise the money requested by the school district subject to the legal mill limitations. The mill levy is computed by dividing the budget by the taxable valuation (true and full value times taxable percentage). However, the number of mills which can be applied with respect to various taxing entities and even various funds within the entities, is limited by statute. The mill levy is then applied proportionately to each taxpayer's taxable property within the school district to determine his individual tax liability. All taxes become due on the first day of January of each year next following the levy. SDCL 10-21-4.
In accord with these statutory mandates, the school board developed a proposed budget for the 1979-80 school year which was approved by the school board on May 22, 1979. In the initial steps of the process, the school board had determined "that there shall be no increase to the average taxpayer over that paid in 1978-79 in support of the public schools." The proposed budget totaled $18,131,614.00 including an item for contingency fund in the amount of $565,856.00. On June 8, 1979, the proposed budget was published and notice was given for a public hearing. The hearing was held on June 19, 1979. No objection to the budget was registered at the hearing by the county board of equalization. The final budget (denominated the annual budget) adopted on August 28, 1979, totaled $18,385,987.00 with the contingency fund reduced to $509,167.00
In the meantime, on the assessment and valuation levels, the county assessors had apparently succeeded in bringing true and full value of property county-wide, rural and urban, into closer conformity, resulting in an increase in assessed valuation in the county in the amount of approximately $43,250.00. Pennington County Commissioners began sitting as a board of equalization on June 19, 1979, and concluded on July 3, 1979. On that last day, the county board adopted a resolution "to set the taxable percentage of full and true valuation at thirty percent, to be applied to all classes of property." From the context of the published minutes, that resolution was an attempt to set the taxable valuation at a point equal to the previous year. However, there is no indication that the thirty percent figure would accomplish that end. Indeed, if it had, this dispute would not have arisen.
The county board's action resulted in a shortfall to the school board's budget in the amount of $293,117.00. The school board appealed the action to the State Board of Equalization which dismissed the appeal on motion of the county board on the ground that the statute under which the appeal was taken had been repealed. On August 24, 1979, the school board initiated this original proceeding in mandamus requesting that the county board be required to roll back the taxable percentage to the 1978 level, thus allowing the county auditor to spread the budget on the tax roll on the property in the school district.
We first discuss the county board's decision to set the taxable value at thirty percent of true and full. The authority under which the county board claims to act is Chapter 86, Session Laws of 1977, which first amended SDCL 10-6-33 to provide that all property should be assessed at true and full value but "not more than" sixty percent as opposed to "only" sixty percent of such assessed value was to be taken and considered as taxable value. Next, the enactment amended SDCL 10-11-25 by inserting direction to the county board of equalization to determine at its annual meeting the percentage of true and full value to be used as taxable value as well as to carry out the previous duties of the board to hear appeals and equalize the assessments. Finally, the enactment repealed subdivision (3) of SDCL 10-11-47 which had authorized appeal to the State Board of Equalization of property between counties assessed below the state average. Counsel for the county board urges that these actions of the 1977 Legislature delegate to the county boards Sole authority to set taxable value in their respective counties. We disagree.
As counsel for the county board points out in his brief, the practice of assessing officials prior to the 1977 enactments was to appraise property...
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...different taxable percentages for agricultural and nonagricultural property, appellees rely upon Rapid City Area School District v. Pennington County Auditor, 284 N.W.2d 308, 311 (S.D.1979), where this court No doubt exists that equalization efforts of the various boards have been severely ......
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