Village of Burnsville v. Onischuk
| Decision Date | 13 September 1974 |
| Docket Number | 44253,Nos. 44232,s. 44232 |
| Citation | 301 Minn. 137,222 N.W.2d 523 |
| Parties | VILLAGE OF BURNSVILLE, et al., Respondents, v. Carl ONISCHUK, Auditor of Dakota County, Respondent, Lou McKenna, Auditor of Ramsey County, Respondent, Charles Lefebvre, Auditor of Anoka County, et al., Appellants-Respondents, Thomas Greeder, Auditor of Washington County, Respondent, Olaf Kaasa, Finance Director of Hennepin County, et al., Respondents, Metropolitan Council, Intervenor, Respondent-Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. A taxpayer and resident who is also a village planner has standing to challenge the constitutionality of a statute which may adversely affect his individual property taxes and have a detrimental impact on village planning for which he is responsible, if the issues raised are matters of great public interest.
2. Ex.Sess.L.1971, c. 24, the metropolitan fiscal disparities law, confers on those who bear the burden of taxation, created by the act, benefits which are sufficiently substantial to satisfy the requirements of Minn.Const. art. 9, § 1, that taxes shall be uniform upon the same class of subjects.
Weaver, Talle & Herrick, Anoka, Warren Spannaus, Atty. Gen., Curtis Forslund, Chief Deputy Atty. Gen., Patrick Murray, C. H. Luther, Deputy Attys. Gen., Dept. of Taxation, St. Paul, for Lefebvre.
Dorsey, Marquart, Windhorst, West & Halladay and John W. Windhorst, Jr., and William H. Hippee, Jr., Minneapolis, for Metropolitan Council.
Grannis & Grannis and Roger Knutson, So. St. Paul, for Burnsville and others.
John O. Sonsteng, County Atty., George May, Asst. County Atty., Hastings for Carl Onischuk.
William Randall, County Atty., St. Paul, for Lou McKenna.
John Jansen, County Atty., Stillwater, for Thomas Greeder.
George Scott, County Atty., Minneapolis, for Olaf Kaasa.
Allen I. Saeks, Minneapolis, Donald Lais, St. Paul, Robert Heacock, Jr., Bloomington, amicus curiae.
Considered and decided by the court en banc.
The issue raised by this appeal is the constitutionality of Ex.Sess.L.1971, c. 24, Minn.St. 473F, commonly referred to as the 'Metropolitan Fiscal Disparities Act.' The trial court held the statute to be in violation of Minn.Const. art. 9, § 1, and we reverse.
The action was initiated as a declaratory judgment suit by the village of Burnsville, located in Dakota County, against the auditors of Dakota County, Ramsey County, Anoka County, Carver County, Scott County, and Washington County, the finance director and auditor of Hennepin County, and the state treasure. Subsequently, Glen Northrup joined as a party plaintiff, and the Metropolitan Council intervened as a party defendant. The auditors of Dakota County, Ramsey County, Washington County, and Hennepin County, and the finance director of Hennepin County have not appealed.
In addition to the constitutional issue, the question of plaintiffs' standing is also before us.
The purposes of c. 24 are set forth in the act as follows:
Minn.St. 473F.01. 'The legislature finds it desirable to improve the revenue raising and distribution system in the seven county Twin Cities area to accomplish the following objectives:
(1) To provide a way for local governments to share in the resources generated by the growth of the area, without removing any resources which local governments already have;
(2) To increase the likelihood of orderly urban development by reducing the impact of fiscal considerations on the location of business and residential growth and of highways, transit facilities and airports;
(3) To establish incentives for all parts of the area to work for the growth of the area as a whole;
(4) To provide a way whereby the area's resources can be made available within and through the existing system of local governments and local decision making;
(5) To help communities in different stages of development by making resources increasingly available to communities at those early stages of development and redevelopment when financial pressures on them are the greatest;
(6) To encourage protection of the environment by reducing the impact of fiscal considerations so that flood plains can be protected and land for parks and open space can be preserved; and
(7) To provide for the distribution to municipalities of additional revenues generated within the area or from outside sources pursuant to other legislation.'
Under Minn.St. 473F.02, the area affected by the act consists of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties, which includes Minneapolis and St. Paul and the suburban metropolitan municipalities immediately adjacent to them, numbering some 250 local units of government in all. Although the formulas for achieving the purposes of the act are complex in the extreme, the stated objectives are relatively simple. In order to prevent an ill-advised competitive scramble by individual units of government within the 7-county area for commercial-industrial development to improve their tax base, the act contemplates pooling 40 percent of the increase throughout the area of all commercial-industrial valuation subsequent to January 2, 1971. For the revenue needs of each unit of government, the county auditor will thereupon impose two separate levies, one on 60 percent of the increment in its commercial-industrial valuation, if it has contributed to the pool, plus all other taxable property in that particular unit of government, and a separate levy on the metropolitan pool, representing the 40-percent increment in commercial-industrial valuation. Under this scheme, all units of government receive some distribution of the area-wide tax base although from year to year, as conditions change, some units will contribute more to the pool than will be distributed to them. 1
The effect of the system is to reallocate the area-wide tax base thus pooled to all municipalities in direct relation to need and inverse relation to fiscal capacity. Need is measured by population, and fiscal capacity is measured by the market value of taxable property per capita. 2 Consequently, the units of government with large population and low fiscal capacity are favored in real-location over those with small population and high fiscal capacity. 3
The local levy of each unit of government is divided by the local tax base to determine the local mill rate which is then applied to all commercial-industrial property which has not been pooled and to all other taxable property. The area-wide levies of all units of government are combined into a total levy against the area-wide tax base. The area-wide levy divided by area-wide tax base establishes an area-wide tax rate which is then applied to the value of each item of industrial-commercial property which has not been subjected to local tax rates. As previously noted, the value of commercial-industrial property to which the area-wide rate is applied varies from year to year, depending on its rate of growth in each municipality.
Since the amount a particular municipality will realize from the area-wide levy is always in direct proportion to the amount it will realize from its local tax levy, the opportunity for 'raiding' the area-wide tax base is minimal or nonexistent.
When the area-wide tax levies have been collected, they are channeled through the county to the state treasurer and distributed to local units of government on the basis of the fiscal capacity of each. 4 The area-wide tax base distribution index which determines the amount of the area-wide levy to which each unit of government is entitled is computed by multiplying the population of the municipality by a fraction, the numerator of which is the average fiscal capacity of all the municipalities in the area for the preceding year, and the denominator of which is the fiscal capacity of that particular municipality, and multiplying the product by two. 5
Standing of plaintiffs.
In their amended complaint, the village of Burnsville is described as a qualifying municipality under c. 24, and Northrup is described as a resident and taxpayer of Burnsville. He was also the planning director for the village. The complaint alleges that c. 24 violates the equal protection provisions of the Fourteenth Amendment and the uniformity provisions of Minn.Const. art. 9, § 1. Plaintiffs seek a declaratory judgment determining the validity of c. 24, enjoining defendants from enforcing it, and holding the statute to be unconstitutional. The trial court disposed of the question of standing by finding plaintiffs had an interest in the statute which was in jeopardy, and that '(p)ublic interest in the issues raised is of great importance to all taxpayers and governmental units affected by Chapter 24.'
As to the village of Burnsville, we have difficulty understanding how the application of the statute adversely affects it. Apparently, in the first year at least, it will actually benefit from the statute. Furthermore, as far as the village itself is concerned, c. 24 will not in any way affect the amount of revenue which the village will receive but only the manner in which taxes are levied. As to the village, Commissioner of Taxation v. Crow Wing County, 275 Minn. 9, 13, 144 N.W.2d 717, 719 (1966), governs. There, we held:
In Mower County Board v. Board of Trustees of PERA, 271 Minn. 505, 513, 136 N.W.2d 671, 676 (1965), we had this to say on the subject of county boards attacking the validity of statutes governing their duties:
'* * * To permit public officials who have no duty to interpret or administer a law endowed with the presumption of constitutionality to assail that law as an excuse for...
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