APPEAL from the County Court of Du Page County; the Hon.
RUSSELL W. KEENEY, Judge, presiding.
MR. JUSTICE GUNN DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 19, 1951.
The Chicago, Milwaukee, St. Paul and Pacific Railroad Company, appellant, after first complying with the provisions of the statute preliminary thereto, filed certain objections to taxes extended for school and village purposes in Du Page County. The school tax objections relate to the educational levy for School District No. 2, and High School District No. 100, and the building fund for District No. 2. The objection to the village of Wooddale corporate fund is to the entire amount extended, except the rate for bond and interest requirements. All of the objections were overruled by the county court, and judgment entered against the objector, and the appeal is direct to this court.
The objections to the educational school levies involve a construction of section 162a of the Revenue Act of 1939, (Ill. Rev. Stat. 1945, chap. 120, par. 643a,) together with article 17 of the School Code, (Ill. Rev. Stat. 1945, chap. 122, par. 17-1 et seq.) relating to school taxes. These objections involve the application of section 162a before it was amended in 1947.
Considering first the facts relating to School District No. 2: In 1945 the assessed value of property therein was $1,884,070, with a debased ratio of 25 per cent of full assessed value. During the year 1945 a referendum was held establishing a rate for educational purposes of 1.80 per cent, which produced the sum of $33,913 for educational purposes. After the enactment of section 162a and other statutes in 1945, commonly referred to as the Butler Act, providing for assessing all property at full cash value and cutting existing tax rates in half, it was ascertained that the full assessed value of property in School District No. 2 was $9,669,896, and that to produce the sum of $33,913, plus 10 per cent increase allowed under section 162a for the year 1946, would require a rate of .386 per cent. However, the District certified $56,000 as necessary for educational purposes, which would require a rate of .6081 per cent. This it is claimed is authorized by the fact that on December 28, 1946, a special election was had which fixed a tax rate of 1.125 per cent for educational purposes. The levies were made before the law was amended in 1947, and hence the provisions of the original act of 1945 prevail in this case. The objector claims that the provisions of section 162a limited the levy of the school district to a rate of .386 per cent because the district was without authority to hold a referendum to establish a rate of 1.125 per cent without first establishing the intermediate rates required by other parts of the School Code before such rate could be submitted to a referendum.
This requires a brief examination of the statutes in question. Section 162a was added to the Revenue Act as a separate section, and fixes the maximum percentage of full fair cash value at which taxes may be extended, and gives a certain formula to follow, more fully described and analyzed in Anderson v. City of Park Ridge, 396 Ill. 235, but provided that during a five-year period the amount of tax could not exceed 105 per cent of that produced by previous tax extension rates, with a proviso that the rate may be increased 5 per cent for two additional years, with certain exceptions not pertinent here. Provision was also made for the establishing of a tax rate limit either higher or lower than otherwise provided by the formula by a referendum. And, there was another like provision, that if no law provided for a tax rate limit higher than authorized by any statutory provision, the amount that such tax rate limit could exceed the applicable statutory limit, by a referendum authorized under section 162a, should be 25 per cent.
At the same session of the legislature at which section 162a was enacted article 17 of the School Code was amended, by which the rates of taxes to be levied or voted for school purposes were reduced, so that under each separate section providing for a tax or increase in taxes, the amount formerly authorized was reduced by half. It apparently was the intention of the legislature by establishing the assessment of property at 100 per cent of value, and reducing the rate of tax by one half, to make the operation of the statute uniform throughout the different counties, where different ratios of debased values to full values existed. The other provisions and exceptions were obviously for the purpose of taking care of those instances where a very low valuation, or a value nearing 100 per cent existed, when it would be necessary to either increase or decrease the tax rate to put the municipality upon as favorable a basis as it had before the enactment of the statute.
Article 17 of the School Code, as amended, provided different rates at which taxes could be extended under different circumstances. Section 17-2 provided for a general tax rate of .50 per cent for educational purposes, and .1875 per cent for building purposes in districts of less than 500,000 inhabitants, while section 17-3 provided that, if the school board desired to raise more money than was authorized by section 17-2, by referendum the educational rate could be raised to .75 per cent, and the building rate increased .25 per cent. And likewise, in the same manner, by section 17-5 it was provided that if the school board in such district, which had authorized .75 per cent for educational purposes as provided by section 17-3, desired, it could by resolution have an election to levy not more than .90 per cent for educational purposes. And, finally, by the provision of section 17-5.01, it was provided that if the school board in such district had been authorized to levy .90 per cent for educational purposes, as provided in sections 17-2, 17-3 and 17-5, and desired to levy more, the question could be submitted to a referendum to levy 1.125 per cent for educational purposes.
It is to be noted that sections 17-2, 17-3, 17-3.1, 17-4, 17-5, 17-5.01 and 17-5.02, after being amended, had added to each of them the following language: "Provided, further, that the foregoing limitations upon tax rates are subject to the provisions of Section 162a of the `Revenue Act of 1939,' filed May 17, 1939, as amended. As amended by act approved July 25, 1945."
Under these several sections of article 17 of the School Code it is the contention of the appellant that the referendum authorizing a rate of 1.125 per cent could be had only under section 17-5.01, and that it was possible to increase the rate by referendum under this section only after first taking the steps required by section 17-3 and section 17-5, and that consequently the authorization in this manner was void, and no tax could be levied thereunder.
Under the statute as it existed up to the amendment in 1947, we think there can be no doubt but what it was the intention of the legislature to have both acts considered together, and that the reduction in tax rates for school purposes was a part of the plan by which the requirement of assessment of property at full value would become uniform and equal throughout the different counties. Appellee contends, however, that the district had a right to hold any of these elections, as provided by sections 17-1 to 17-5.01, at any time, but submits nothing to substantiate this view, since each succeeding section recites that if the board desires to raise more money than is raised by previous authorizations, it can then proceed to hold a new election for additional money. We think these successive steps were required in view of the fact that section 162a limited the period of time providing for stepping up rates gradually, and not allowing an abrupt raise in tax rates, as difference in low debased values might justify.
If it was necessary for the school authorities to go through these several steps before they were justified in levying the rate of 1.125 per cent submitted by the election of December 28, 1946, it is quite clear that the election would be void and of no effect whatsoever, with the result that there was no legal rate adopted by the election of December 28, 1946. People ex rel. Birch v. Pennsylvania Railroad Co. 375 Ill. 85; People ex rel. Willard v. Chicago and North Western Railway Co. 402 Ill. 28.
Epitomized, the situation and condition of the law up to the amendment of July 22, 1947, might be briefly stated as follows: Subparagraph 5 of section 162a provides: "No proposition to increase a tax-rate limit in accordance with the provisions of this section shall be submitted unless the tax-rate limit in question stands at the maximum that may be secured by the terms of any referendum elsewhere provided for by law." Other provisions of section 162a provide for a maximum extension rate, so that if the rates as reduced by the different paragraphs and subparagraphs of section 162a provide a rate limit lower than .75 per cent, the next referendum under the School Code could not exceed .75 per cent for educational purposes; or, if the rate as reduced by section 162a is more than .75 per cent, but less than .90 per cent, the next rate for which a referendum may be held is .90 per cent.
In other words, the first referendum rate authorized by the School Code is .75 per cent for educational purposes, and before a district can hold a referendum for the highest rate they must be first authorized by referendum to extend a .75 per cent rate before any further increases by referendum are authorized. This construction favors the taxpayer rather than the power to tax, and we have always held that in construing powers to tax, in case of doubt the construction is in favor of the taxpayer. (People ex rel. Dooley v. New York, Chicago and St. Louis Railroad Co. 371 Ill. 522.) Under this construction, the election of December 28, 1946, being illegal, the ...