United Illuminating Co. v. City of New Haven

• Decision Date: 06 October 1980
• Citation: 427 A.2d 830,179 Conn. 627
• Court: Connecticut Supreme Court
• Parties: UNITED ILLUMINATING COMPANY v. CITY OF NEW HAVEN et al. NEW HAVEN WATER COMPANY v. CITY OF NEW HAVEN et al. SOUTHERN CONNECTICUT GAS COMPANY v. CITY OF NEW HAVEN et al.

Page 830

427 A.2d 830

179 Conn. 627

UNITED ILLUMINATING COMPANY v. CITY OF NEW HAVEN et al.

NEW HAVEN WATER COMPANY v. CITY OF NEW HAVEN et al.

SOUTHERN CONNECTICUT GAS COMPANY v. CITY OF NEW HAVEN et al.

Supreme Court of Connecticut.

Argued Oct. 4, 1979.

Decided Feb. 19, 1980.

Appeal Dismissed Oct. 6, 1980.

See 101 S.Ct. 45.

[179 Conn. 628] Harold C. Donegan, Corp. Counsel, New Haven, with whom was Dennis L. Pieragostini, Deputy Corp. Counsel, New Haven, for appellants (defendants).

John W. Barnett, New Haven, with whom was Madeline F. Grossman, New Haven, for appellee (plaintiff United Illuminating Co.).

Barry C. Hawkins, New Haven, with whom was Susan J. Bryson, New Haven, for appellees (plaintiffs New Haven Water Co. and Southern Connecticut Gas Co.).

Before COTTER, C. J., and LOISELLE, BOGDANSKI, SPEZIALE and PARSKEY, JJ.

SPEZIALE, Associate Justice.

The issue presented on this appeal is whether § 12-62a(e) of the General Statutes (hereinafter referred to as the "act" or Public Acts 1978, No. 78-256), a tax phase-in statute for real property, and the ordinance of the city of New Haven effective October 18, 1978, as amended effective January 2, 1979, implementing the act, are unconstitutional in that they violate the equal protection clauses of the fourteenth amendment to the United States constitution, ¹ and the constitution of Connecticut The plaintiffs, the United Illuminating Company (hereinafter referred to as "UI"), the New Haven Water Company (hereinafter referred to as "Water Co.") and the Southern Connecticut Gas Company (hereinafter referred to as "Gas Co."), are public utilities which own property in the city of New Haven. The defendants are the city of New Haven (hereinafter referred to as "the city"), Martin J. Griffin, the tax collector of the city, and Edward Clifford, the tax assessor of the city. In three separate actions the plaintiffs each sought, inter alia, declaratory judgments that the act and the ordinance are unconstitutional. ³ By agreement of all parties, the cases were combined for the purposes of trial and for appeal. From the declaratory judgment of the trial court holding the act and the ordinance unconstitutional as violative of the equal protection clauses of both the Connecticut and United States constitutions, the defendants have appealed to this court.

article first, §§ 1 and 20. ² We hold that both the statute and ordinance are constitutional.

To place this case in its proper context, it is first necessary to consider certain legislation enacted prior to the adoption of Public Acts 1978, No. 78-256. Under § 12-62 of the General Statutes, ⁴ commencing October 1, 1978, the assessor of each municipality must revalue all real property no later than ten years following the last preceding revaluation and every ten years thereafter. Section 12-62a(b) of the General Statutes ⁵ mandates that all property, both realty and personalty, is to be assessed at a rate of 70 percent of true and actual value.

Because real property in New Haven had not been revalued since 1964, the defendant tax assessor revalued such property as of October 1, 1978. Further, the city was required to abandon its prior assessment rate of 60 percent of true and actual value and to assess in accordance with § 12-62a(b) at the uniform rate of 70 percent of true and actual value.

In 1978, § 12-62a of the General Statutes was amended by the act, Public Acts 1978, No. 78-256, § 3 (now codified at § 12-62a(e) of the General Statutes). ⁶ The act, which took effect from its passage, essentially allows municipalities whose total real property assessments increased after revaluation pursuant to § 12-62 of the General Statutes by at least 30 percent over the assessment of the prior year to phase in the increase in assessment. The legislative body of the qualifying municipalities may "defer all or any part" of the increase in assessment provided that the amount deferred is phased-in in equal amounts over a period not to exceed five years from the year of revaluation. The phase-in plan is, of course, inapplicable to those pieces of real property whose revaluation has not resulted in a higher assessment. Further, by its terms, the statutory phase-in applies only to real property; personal property is uniformly assessed at 70 percent of its real and actual value as required by § 12-62a(b) of the General Statutes.

Pursuant to the act, the city adopted the ordinance, as amended, which is set forth in the footnote below. ⁷ Simply stated, the In its memorandum of decision, the trial court found the following: On the list of October 1, 1977, the true and actual value of all real property in the city was $842,519,410; on the October 1, 1978 list it was $1,264,915,897. This represented an increase of approximately 50 percent. Without the act and the ordinance, the assessed value of all real property on the October 1, 1978 list would have been $885,441,127 ($1,264,915,897 X 70%). Application of the act and ordinance resulted in the assessed value of all real property on the list being $549,762,456. Thus, the assessments on the list of October 1, 1978 amounted only to 43.5 percent of the true and actual value of all real property in the city. As stated previously, personal property was assessed at 70 percent of its true and actual value.

ordinance, as it pertains to this case, provides that if the city is a qualifying municipality (that is, if the assessment list of October 1, 1978 reflects an increase in the total [179 Conn. 633] assessed value of real property which is at least 30 percent greater than the value of realty on the October 1, 1977 list) the increase in the assessed value of a parcel of real property is to be divided into five equal increments, one to be added to the tax list for each of the five successive years beginning October 1, 1978. In other words, the increase in assessment will be phased in at a rate of 20 percent per year for five years; and, therefore, real property whose assessment increased as a result of the 1978 revaluation will not be assessed [179 Conn. 634] at 70 percent of the true and actual value as determined by the 1978 revaluation until the 1982 grand list.

Because the act and ordinance resulted in a reduction in the grand list in excess of $335,000,000, the tax rate for both real and personal property in the city for the fiscal year beginning July 1, 1979 was approximately 66.5 mills as opposed to approximately 47.3 mills. ⁸ To the extent that the grand list decreases, the mill rate must increase for a constant revenue to be produced.

Both UI and the Water Co. own real and personal property located in New Haven; the Gas Co. owns personalty only. The court below found that, assuming the board of aldermen of the city would not make any substantial changes in the 1979 budget or in the rate of 66.5 mills proposed by the board of finance of the city, the UI would pay $1,500,000 more in taxes during the first year of the phase-in than it would without the phase-in; the Water Co. would have to pay an additional $184,000 in taxes, and the Gas Co., $106,000. Because these taxpayers are affected in a pecuniary manner, their standing to bring the instant action is clear. Bell v. Planning & Zoning Commission, 174 Conn. 493, 498, 391 A.2d 154 (1978); Atwood v. Regional School District No. 15, 169 Conn. 613, 617, 363 A.2d 1038 (1975). See also Practice Book, 1978, § 390(a).

The trial court held both § 12-62a(e) of the General Statutes, which codifies Public Acts 1978, No. 78-256, § 3, and the ordinance unconstitutional under the equal protection provisions of both the state and federal constitutions. We will consider the constitutionality of the act and ordinance under both constitutions simultaneously because these provisions have a like meaning

and impose similar constitutional limitations. Leech v. Veterans' Bonus Division Appeals Board, 179 Conn. 311, 426 A.2d 289 (1979); Caldor's, Inc. v. Bedding Barn, Inc., 177 Conn. 304, 314-15, 417 A.2d 343 (1978); Miller v. Heffernan, 173 Conn. 506, 509, 378 A.2d 572 (1977), appeal dismissed, 434 U.S. 1057, 98 S.Ct. 1226, 55 L.Ed.2d 758 (1978); Horton v. Meskill, 172 Conn. 615, 639, 376 A.2d 359 (1977); Kellems v. Brown, 163 Conn. 478, 485, 313 A.2d 53, appeal dismissed, 409 U.S. 1099, 93 S.Ct. 911, 34 L.Ed.2d 678 (1972).

I

In determining whether the act and ordinance constitute a denial of equal protection of the laws, we first consider the standard to be applied. The plaintiffs claim that the phase-in act and ordinance violate the equal protection clauses of the United States and Connecticut constitutions because: (1) they provide for "systematic and intentional underassessment" of certain property within a class of like property; and (2) the classifications resulting from the act and ordinance are "arbitrary and irrational." Thus, it appears that the plaintiffs are urging us to apply either of the above two standards when determining the constitutionality of the act and ordinance.

Where legislation, such as the phase-in act and ordinance, which neither contains a suspect classification nor impinges on a fundamental right is challenged on equal protection grounds, we have stated that the plaintiff to prevail must establish that the statutory classification is without rational basis. Waterbury Motor Lease, Inc. v. Tax Commissioner, 174 Conn. 51, 60, 381 A.2d 552 (1977); Miller v. Heffernan, supra, 173 Conn. 509, 378 A.2d 572; Kellems v. Brown, supra, 163 Conn. 486, 313 A.2d 53. We have explained the "rational basis" test numerous times in the past: The classifications must be reasonable and rest upon " 'some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.' F. S. Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989 ((1920))." Miller v. Heffernan, supra, 173 Conn. 510, 378 A.2d at 576; ...