Roosevelt Raceway, Inc. v. Nassau County

Decision Date09 June 1966
Citation218 N.E.2d 539,271 N.Y.S.2d 662,18 N.Y.2d 30
Parties, 218 N.E.2d 539 In the Matter of ROOSEVELT RACEWAY, INC., Respondent, v. COUNTY OF NASSAU et al., Appellants.
CourtNew York Court of Appeals Court of Appeals

Morris H. Schneider, County Atty. (Seymour S. Ross, Mineola, David Schechter, New York City, and William D. Siegel, Mineola, of counsel), for appellants.

George Morton Levy, Mineola, Louis Haimoff, New York City, and Anthony F. Correri, Mineola, for respondent.

Louis J. Lefkowitz, Atty. Gen. (Joel Lewittes, Samuel A. Hirshowitz and Daniel M. Cohen, New York City, of counsel), in his statutory capacity under section 71 of the Executive Law.

DESMOND, Chief Judge.

This article 78 CPLR proceeding was brought against Nassau County and its County Comptroller to challenge the validity under the Federal and State Constitutions of chapter 837 of the Laws of 1956, McK.Unconsol.Laws, §§ 8008, 8020, 9502, and Nassau County Local Law No. 1 of 1956 pursuant to which the county by authorization of the State statute imposed a 30% Tax on admissions to the harness horse races held at petitioner's racetrack in Nassau County (which tax petitioner paid from 1956 until 1964). By earlier laws passed in 1952 (chs. 148, 236) and in 1954 (chs. 285, 287) McK.Unconsol.Laws, § 9501 et seq. the State gave its permission to all counties (availed of by Nassau in 1954) to levy a 15% Tax on such admissions. The 1956 State law change made possible an increase from 15% To 30% Of county-collected admissions taxes at harness tracks in cities or counties adjacent to a city having a population in excess of two million, that is, to New York City.

The Appellate Division by a vote of 3 to 2 held that the 1956 State statute and the Nassau County local law passed pursuant thereto were unconstitutional because of lack of a rational basis for a distinction between a tax on running tracks (as to which counties are allowed to impose a 15% Admissions tax only) and harness tracks in the metropolitan area. This, said the Appellate Division majority, denied to petitioner equal protection of the laws. One of the Justices who made up the majority, while concurring in this specification of unconstitutionality, thought that the State statute had been invalidly passed since, so he reasoned, it was in effect a local law and so, under the Home Rule provisions of the State Constitution (art. IX, § 1, subd. (b), as it was in 1956), required a request therefor by the Board of Supervisors of the county or a certificate of necessity signed by the Governor. It had neither. The two dissenting Justices, pointing to the settled rule that 'In matters of taxation, the Legislature has broad powers of classification', concluded that it was not arbitrary or lacking in reason to find distinctions between the two types of horse race meetings and that there was no violation of either Constitution.

Before arriving at the prime constitutional question (equal protection) we consider several other grounds of alleged invalidity asserted by petitioner but all rejected by the Appellate Division. In the first of these petitioner says that the 1956 statutory change despite its general verbiage was actually directed at petitioner's track in Nassau County and a similar harness racing track at Yonkers in Westchester County and so was a law local in its terms or in its effect requiring under (former) article IX (§ 1, subd. (b)) of the New York State Constitution a request from the local Board of Supervisors for a certificate of necessity transmitted by the Governor to the Legislature. It is true that limiting this authorized tax increase to cities or counties adjacent to New York City reduced its coverage to these two tracks since no other harness race tracks operate in that area. But such geographical classifications are old in New York law and have consistently been upheld (People v. Dunn, 157 N.Y. 528, 52 N.E. 572, 43 L.R.A. 247; Farrington v. Pinckney, 1 N.Y.2d 74, 150 N.Y.S.2d 585, 133 N.E.2d 817; Matter of Four Maple Drive Realty Corp. v. Abrams, 2 A.D.2d 753, 754, 153 N.Y.S.2d 747, 750, app. dsmd. 2 N.Y.2d 837, 159 N.Y.S.2d 976, 140 N.E.2d 870, app. dsmd. 355 U.S. 14, 78 S.Ct. 22, 2 L.Ed.2d 21; Spatt v. City of New York, 13 N.Y.2d 618, 240 N.Y.S.2d 605, 191 N.E.2d 91, app. dsmd. 375 U.S. 394, 84 S.Ct. 451, 11 L.Ed.2d 411). In 1898 in Matter of Henneberger, 155 N.Y. 420, 50 N.E. 61, 42 L.R.A. 132 this court said that 'good reasons exist why, in a general law, reference may be had to conditions of population, whether in counties, cities, towns or villages, or with respect to a proximity to cities of a certain growth' (pp. 429--430, 50 N.E. p. 64). In 1944 in Stapelton v. Pinckney, 293 N.Y. 330, 334, 57 N.E.2d 38, 39, 155 A.L.R. 783 we said that a statute need not be classified as local for Home Rule purposes but although it contained classifications 'based upon population or upon proximity to great centres of population may be a general law though only a single municipal corporation or locality can at the time receive its benefits' (see, similarly, Robinson v. County of Broome, 276 App.Div. 69, 93 N.Y.S.2d 662 (1949), affd. 301 N.Y. 524, 93 N.E.2d 77 (1950)). It is to be kept in mind that enactment of tax laws is a State function but that the State may 'delegate to a county or city power to assess and collect taxes in different ways' (County Securities v. Seacord, 278 N.Y. 34, 37, 15 N.E.2d 179, 180). It is important, too, as to the Home Rule point, that chapter 837 of the Laws of 1956 is permissive, not mandatory (see New York Steam Corp. v. City of New York, 268 N.Y. 137, 143, 144, 197 N.E. 172, 173, 174, 99 A.L.R. 1157).

Next, petitioner argues that the Nassau County enactment was void in that at the time of its passage Nassau County had no present authority since its local law was passed three days before the State enabling act was signed by the Governor. However, the local law itself took care of this by providing that it should take effect immediately if the Governor meanwhile should have approved the State act, but that, if the Governor should not have attached his signature to the State enactment on or before the approval of the local law, the latter should take effect on the day on while the Governor should approve the State bill. Such arrangements for a statute taking effect on the happening of some future event do not result in invalidity (see Barto v. Himrod, 8 N.Y. 483, 490).

Another argument against the validity of the admissions tax increase is that such local taxation of racetracks is not permitted under section 9 of article I of the State Constitution. That section created an exception to the constitutional prohibition of gambling and permitted parimutuel betting on horse races 'as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government'. Petitioner would have us read that language to mean that the county, as distinguished from the State itself, may not be authorized to collect a tax on admissions to any racetrack where there is pari-mutuel betting. However, the right of the State to tax or to permit a county to tax racetrack admissions is not based on or affected by that part of section 9 of article I. The tax with which we are here concerned is not a tax on betting but on admissions fees charged for entering the racetrack. There is a substantial difference between those two kinds of taxes.

We arrive now at the major issue, that is, as to the constitutionality of taxing admissions fees to the two kinds of racetracks at two different rates. The Appellate Division wrote that 'there is no rational basis for a distinction between a tax on running tracks and one on harness tracks. They are both parts of a single sport of horse racing.' The first answer to that is that the Legislature in many other statutes has ordered different treatment for 'flat tracks' and 'harness tracks'. For instance, corporations conducting running races are subject to license and control by the State Racing Commission (L.1926, ch. 440, as amd., § 6 et seq., McK.Unconsol.Laws, § 7907 et seq.) while harness track racing is controlled and licensed by a different commission with different powers (Pari-mutuel Revenue Law (L.1940, ch. 254, as amd.), § 35 et seq., McK.Unconsol.Laws, § 8001 et seq.). The State's taxation of betting at running tracks is at a rate and formula different from the tax on betting at the harness tracks (compare L.1940, ch. 254, as amd., §§ 9 and 9--a with § 45, McK.Unconsol.Laws, §§ 7959, 7960, 8019). The fixation of the local admissions tax on these two kinds of tracks was by different statutes (see L.1952, chs. 148, 236). The Legislature has at various times provided financial assistance to both kinds of tracks for modernization of their facilities, and this again was done under different statutes and under quite different formulae (compare, for instance, L.1956, ch. 837, with L.1955, ch. 813, and L.1957, ch. 355, McK.Unconsol.Laws, §§ 7954, 7959, 7960, 7972). It is thus apparent that the Legislature, for whatever reason, has consistently and over a period of years put these two kinds of racetracks into different classifications for purposes of control and taxation.

In Matter of Keeney's Estate, 194 N.Y. 281, 286, 87 N.E. 428, 429 we said this: 'The right and power of governments to single out certain classes of objects for taxation, leaving other classes exempt or taxed at a different rate, or in a different manner, is unquestionable. * * * Such power has been exercised by all governments from the...

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