School Dist. of Pittsburgh v. City of Pittsburgh
| Decision Date | 16 April 1982 |
| Citation | 66 Pa.Cmwlth. 238,443 A.2d 1206 |
| Parties | , 3 Ed. Law Rep. 688 The SCHOOL DISTRICT OF PITTSBURGH, Appellant, v. CITY OF PITTSBURGH and Borough of Mt. Oliver, Appellees. |
| Court | Pennsylvania Commonwealth Court |
Robert J. Stefanko, David H. Dille, Pittsburgh, for appellant.
Mead J. Mulvihill, Jr., Marvin A. Fein, Pittsburgh, for appellees.
John C. Mohan, Pittsburgh, for Borough of Mt. Oliver.
Before CRUMLISH, President Judge, and MENCER, ROGERS, BLATT and WILLIAMS, JJ.
This action arose on October 2, 1980 when the School District of Pittsburgh (School District) filed a Complaint requesting Declaratory Judgment with the Court of Common Pleas of Allegheny County. It sought interpretation of Section 652.1 of the Public School Code of 1949 (Code), Act of March 10, 1949, P.L. 30, as amended, added by Section 3 of the Act of December 19, 1975, P.L. 511 (Act 150), 24 P.S. § 6-652.1. Particular reference was made to whether or not the School District is "coterminous" with the City of Pittsburgh (City) and/or the Borough of Mt. Oliver (Borough) for purposes of complying with the halving requirement of Section 652.1 of Act 150 which provides in pertinent part:
(a) The elected Board of Public Education in any school district of the first Class A shall have authority to impose taxes for the purposes of such school district as follows:
(1) Without ordinance and under the following statutes their reenactments and amendments, at the rates fixed therein, namely:
....
(III) Act of August 24, 1961 (P.L. 1135, No. 508) (Income Tax), (24 P.S. §§ 588.1-588.12).
....
(2) In addition thereto, by ordinance on any persons, transactions, occupations, privileges, subjects and real or personal property as they shall determine not prohibited by the act of December 31, 1965 (P.L. 1257, No. 511), known as "The Local Tax Enabling Act"; but no ordinance shall authorize the imposition of a tax on the wages, salary or net income of any person not a resident of such school district.
(B) Any ordinance authorizing a tax, other than under a statute and at the rate fixed thereby, shall fix the rate thereof and provide for the levy, assessment and collection of the same.
(C) In any case where an ordinance of the elected board of education imposes a tax on the same subject and person on which any coterminous political subdivision imposes a similar tax, the rate shall be halved as provided in section 8 of "The Local Tax Enabling Act." (Footnotes omitted.)
The School District is comprised of the City, with the exception of sections of the City's 12th, 31st and 32nd Wards, and of the Borough which is situated completely within the City, being bounded by the City on all sides. Both the City and the Borough impose certain taxes pursuant to the Local Tax Enabling Act (Act 511), Act of December 31, 1965, P.L. 1257, 53 P.S. §§ 6901-6924; the City, however, is not subject to the limitations of the Act inasmuch as it has been governed by a Home Rule Charter since January 5, 1976. See 53 P.S. § 1-302. The School District levies its taxes under the authority granted it by Act 150 of the Public School Code of 1949, enacted on December 19, 1975, which mandated that each school district of the first class A 1 shall have an elected, rather than an appointed, school board, Section 302.1 of Act 150, 24 P.S. § 3-302.1, and delineated its taxing authority. Section 652.1(a)(1) of Act 150 preserved the School District's power to tax pursuant to the statutes which had constituted its prior taxing authority as an appointed board, and Section 652.1(a)(2) augmented this authority with a grant of additional taxing power. From the time the School District's first elected board took office up until December 1979, the board exercised only the taxing power afforded it by Section 652.1(a)(1) of Act 150. In early 1980, however, the Board recognized that additional funds would be required to meet its 1981 budgetary requirements and proposed to levy additional taxes pursuant to Section 652.1(a)(2) of Act 150. 2 It then notified the City and the Borough that it intended to levy a one per cent earned income tax pursuant to Section 652.1(a)(2) in addition to the one per cent earned income tax already imposed under Section 652.1(a)(1). The School District concluded that it was coterminous with both the City and the Borough and that, therefore, the halving requirement of subsection c would apply; the City and the Borough, however, did not agree with this interpretation of the statute which would, of course, result in a loss of tax revenues to them.
When the parties were unable to reach agreement as to the appropriate interpretation of the word "coterminous" as used in the statute, the School District sought a declaratory judgment seeking to have Sections 652.1(a)(2) and 652.1(c) of Act 150 judicially construed. When the court below had not ruled on their complaint by December 1980, the School District, in order to meet its 1981 budgetary requirements, raised its real property tax from 29 mills to 41 mills and its earned income tax from one per cent to two per cent pursuant to Section 652.1(a)(2), but advised the City Treasurer to collect only an additional one-half per cent earned income tax pursuant to the halving requirement of Section 652.1(c). The court below subsequently denied the School District's request for declaratory judgment, and ruled that the School District is not empowered to levy a tax on wages, salaries, commissions and earned income of residents pursuant to Act 511 as incorporated in Section 652.1(a)(2) of Act 150 and, in view of its conclusions of law, deemed the issue of coterminality to be moot.
In retaining, by virtue of Section 652.1(a)(1), the authority of the now elected school board to tax, pursuant to the statutes under which its predecessor appointed board had formerly taxed, the legislature used the prefatory language "(w)ithout ordinance and under the following statutes their reenactments and amendments, at the rates fixed therein...." (Emphasis added.) Among the statutes revived thereunder is Section 2 of the Act of August 24, 1961, P.L. 1135, as amended, 24 P.S. § 588.2, which provides in pertinent part:
The Board of Public Education of school districts of the first class A shall levy, annually, a tax of not more than one per centum on the following:
(a) Salaries, wages, commissions and other compensation earned by residents. (Emphasis added.)
In Hanek v. Cities of Clairton, 24 Pa. Commonwealth Ct. 69, 354 A.2d 35 (1976), 24 P.S. § 588.2 was interpreted as providing that the wage tax imposed thereunder must be considered as imposed by ordinance. However, 24 P.S. § 588.2 now has vitality pursuant to Section 652.1(a)(1) which dictates that the tax be levied "(w)ithout ordinance," and, therefore, Hanek is no longer controlling on that point of interpretation. 3 24 P.S. § 588.2, as now effected pursuant to Section 652.1(a)(1) of Act 150, must be read, therefore, as statutorily mandating that the School District impose an annual tax of not more than one per cent on earned income.
The School District argues that the court below erred in concluding that the taxing power conferred by Section 652.1(a)(2) was limited to the power to impose only such additional taxes as were not duplicative of the taxes enumerated in Section 652.1(a)(1). In construing a statute, however, the court must determine legislative intent from the totality of a statute and render an interpretation and construction which gives effect to all of its provisions, if possible. 1 Pa.C.S. § 1921(a); Wolfe v. Department of Transportation, Bureau of Traffic Safety, 24 Pa. Commonwealth Ct. 261, 355 A.2d 600 (1976). To suggest that the School District can impose a tax on earned income pursuant to Section 652.1(a)(2) in addition to the one per cent permitted under Section 652.1(a)(1) is to ignore the legislature's specific prohibition of an earned income tax in excess of one per cent, as expressed in 24 P.S. § 588.2. It is clear, therefore, that the legislature did not intend an "absurd, impossible of execution or unreasonable" result, 1 Pa.C.S. § 1922(1), such as would occur if the school board, by the simple device of enacting an ordinance pursuant to Section 652.1(a)(2), was permitted to negate the tax limits imposed upon it by Section 652.1(a)(1).
The School District points to the closing language of Section 652.1(a)(2): "but no ordinance shall authorize the imposition of a tax on the wages, salary or net income of any person not a resident of such school district" as evidencing the legislature's intent that the taxing power granted by subsection (a)(2) includes the power to enact a tax on earned income in addition to the one per cent tax 4 permitted under subsection (a)(1). The tax authorized in subsection (a)(1), however, is limited to residents, 24 P.S. § 588.2, and subsection (a)(2) merely prohibits expansion, by means of local ordinance, of the earned income tax to non-residents of the School District. It should also be noted that, rather than enumerating the objects of taxation by ordinance under subsection (a)(2), the legislature chose to establish them by reference to those not prohibited by Act 511.
We conclude, therefore, that the school board of the School District may not utilize Section 652.1(a)(2) to increase by ordinance any of the legislatively imposed tax rate limitations imposed under the statutes revived by Section 652.1(a)(1), which are effective "(w)ithout ordinance ... at the rates fixed therein." It is clear then that, inasmuch as Section 652.1(a)(2) does not confer power upon the school board to increase by ordinance any tax whose rate limitation has been set pursuant to Section 652.1(a)(1), the school board's power to tax the earned income of its residents is limited to a tax of one per cent imposed without ordinance pursuant to Section 652.1(a)(1).
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