APPEAL from the County Court of St. Clair County; the Hon.
C.C. DREMAN, Judge, presiding.
MR. JUSTICE THOMPSON DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 19, 1951.
This is an appeal by the city of St. Louis, Missouri, from a judgment of the county court of St. Clair County, overruling the city's objections to a portion of the taxes assessed against its property for each of the years 1946 and 1947.
The case involves the assessments of the Illinois portion of the MacArthur Bridge owned by the city of St. Louis, sometimes known as the free bridge, across the Mississippi river. For each of the years 1946 and 1947, both the board of assessors and the board of review of St. Clair County assessed all taxable property in the county at what they determined to be 40 per cent of the full fair cash value as of April 1 of the respective year. Appellant's property was assessed by them for each of such years at $1,932,000, which they found to be 40 per cent of its full fair cash value, said boards having determined its full fair cash value to be $4,830,000 as of April 1. The Department of Revenue found and determined that the local assessing authorities of St. Clair County had assessed the taxable property therein at only 30 per cent of its full fair cash value, and accordingly certified a multiplier of 3.3333 per cent to be applied to all assessed valuations of St. Clair County, as revised and corrected by the board of review, the application of this multiplier being certified as necessary in order to bring the assessed valuations of all property in the county to such property's full fair cash value of 100 per cent.
After the Department of Revenue had certified to the county clerk the multiplier for such respective year, the county clerk each year multiplied the assessed value of each parcel of real estate in the county by 3.3333 per cent, and then extended the tax rates of the various taxing bodies against the property on the basis of the higher valuations thus obtained. This multiplier of 3.3333 per cent was produced by using an equalization factor of 30 per cent. The application of this multiplier to appellant's property resulted in a final assessment of $6,439,935, as its full fair cash value; whereas if the Department of Revenue, in arriving at the multiplier to be applied against assessed valuations, had used as the equalization factor the same percentage as that used by the board of assessors and board of review as a debasement figure, namely, 40 per cent, this would have resulted in a multiplier of 2.5 per cent and a final assessment of appellant's property at $4,830,000 as its 100-per-cent valuation.
The city each year paid voluntarily and without protest the amount of taxes which would be due on an assessed valuation of $4,830,000, and each year paid under protest and filed objections to the taxes extended on an assessed valuation in excess of that amount, the taxes objected to being that portion of the taxes extended against its property which would be due on $1,609,935 of the assessed valuation thereof. By its objections the city alleges that the full fair cash value of its said bridge property as of April 1 did not exceed the said sum of $4,830,000; that the said valuation of $6,439,935 upon which the taxes were extended is one third more than its full fair cash value and is to the extent of $1,609,935, excessive, fraudulent, unconstitutional and in violation of law; that prior to the certification of said multiplier by the Department of Revenue, the city had no knowledge of the said multiplier found by the Department, that it had no opportunity to present to the Department any objections to the multiplier so certified or in any way to contest the amount of such multiplier, and that after the certification of such multiplier it had no opportunity or remedy in any way to secure a reduction of its assessment so that the application of the multiplier thereto would result only in a 100 per cent assessed valuation of its property. The city by its objections further charges that the assessment as finally made against its property, upon which assessment the taxes for each of such years were extended, is arbitrary, excessive, fraudulent, unconstitutional, discriminatory, erroneous and void; that said assessment violates section 1 of article IX of our State constitution, which requires every person and corporation to pay a tax in proportion to the value of his, her or its property; and that by reason of such assessment, the city of St. Louis had been denied the equal protection of law, in violation of the fourteenth amendment to the constitution of the United States, and has also been denied due process of law, in violation of said fourteenth amendment and in violation of section 2 of article II of the constitution of Illinois. The objections to the taxes for 1947 also charge that sections 146, 149, and 151 of the Revenue Act of 1939, under the authority of which the Department of Revenue determined and certified the multiplier for the year 1947, (Ill. Rev. Stat. 1947, chap. 120, pars. 627, 630 and 632,) are unconstitutional, and that said multiplier was not determined by the Department of Revenue as provided by said section 146, inasmuch as the only analysis made by the Department in connection therewith was with reference to real-estate transfers, no appraisals of property or sales of personal property being considered.
The two cases were consolidated and tried together in the county court. The court overruled the objections and entered judgment for the amounts of the taxes in controversy. From that judgment this appeal is prosecuted.
At the hearing in the county court it was stipulated that the collector had established a prima facie case. The city introduced evidence, but no evidence was introduced by the collector. The evidence produced by the city consisted of the testimony of John J. Costello, clerk of the board of review and the board of assessors during the years 1946, 1947, and 1948; Ben Emge, a member of the board of assessors, and Herb Schwinn, a member of the board of review, both during the above-mentioned three years; John Delabor, auditor in the comptroller's office in the city of St. Louis; Guido Moss, manager of the research and schedule department of the St. Louis Public Service Company and a former employee of the city as public utility engineer, and A.R. Ross, the superintendent of the MacArthur Bridge.
Costello testified that the board of assessors assessed the Illinois portion of the MacArthur bridge at $1,932,000, and that this amount represented 40 per cent of its full fair value, that the board arrived at this assessment by estimating the amount they considered to be the full value as $4,830,000 and then taking 40 per cent thereof, and further testified that in his opinion the full cash market value of this part of the bridge on April 1, 1946, was $4,830,000.
Schwinn and Emge testified that the board of assessors for the years 1946 and 1947 assessed the Illinois portion of the bridge at $1,932,000, which was 40 per cent of what was determined to be its full fair cash market value on April 1 of those years, that they determined that its full fair cash market value on those dates, according to their best judgment, was $4,830,000 and then took 40 per cent of it as its assessed valuation, and that all other property in the county was handled in the same manner, that is, by determining what in their judgment they considered to be the full fair cash market value and then assessing the property at 40 per cent of such value. The witness Emge testified to the same procedure followed by the board of review.
Delabor testified that the total income from the whole of the bridge during the fiscal year 1945-1946 was $1,519,772.72, during the fiscal year 1946-1947, $1,583,878.55, and during the fiscal year 1947-1948, $1,551,545.82; that the total amount expended during the first of such fiscal years in connection with the bridge was $408,362.04, which amount included $66,050 for bond interest and maturities and $121,930.77 Illinois taxes, and that after deducting all amounts expended the net balance from the bridge for that year was $1,111,410.68; that the total expenses for the fiscal year 1946-1947 were $450,491.23, of which $59,550 represented bond interest and maturities and $127,055.21 represented taxes, leaving a net balance of income for that year of $1,133,387.32; that the total expenses for the year 1947-1948 were $574,981.87, which included $53,200 for bond interest and maturities and $162,217.73 for Illinois taxes, and that the net income from the bridge for that year was $976,563.95. He further testified that if the bridge had not been municipally owned, there would have been other expenses, estimated as amounting in the first of said fiscal years to $18,955 for services rendered by the city, $75,988.64 for franchise tax, and $586,029.48 for excess profit tax; in the second of said fiscal years estimated as $19,855 for a survey by the city, $79,193.83 for franchise tax, and $393,048.59 for income tax; and for the third of said fiscal years estimated as $19,855 for services by the city, $77,577.29 for franchise tax and $334,070.03 for income tax, and that these additional expenses reduce the net income for the first of said years to $429,537.56, the net income for the second of said years to $641,289.90, and for the third of said fiscal years to $545,061.63; and that if the net earnings of the bridge, based upon these figures, were capitalized at seven per cent, which the witness considered to be the usual and reasonable amount allowable for a return, the capitalized earning value of the entire bridge during the fiscal year 1945-1946 would be $6,136,251, and the capitalized value of the Illinois portion, which he figured as 52 per cent of the whole, would be $3,190,850.52; that the value of the Illinois portion capitalized at seven per cent would be $4,763,861.96 for the fiscal year 1946-1947, and for the fiscal year 1947-1948, $4,050,367.36.
Moss testified that he had made no physical examination of the structure of the bridge, but that upon investigation he found the original cost of that part of the bridge within the State of Illinois was $5,236,000, and that taking into consideration his knowledge and information concerning the bridge and the element of depreciation, which he roughly estimated to be $1,800,000, he was of the opinion that $3,500,000 was the full value of the Illinois portion as of the first day of April in each of the years 1946, 1947 and 1948.
The witness Ross testified that the original cost of that portion of the bridge situated in Illinois was $5,254,737.93; that applying depreciation rates to such original value, the depreciated value thereof as of 1946 was $3,526,027.73; that the annual depreciation would be $104,868.73, and consequently the depreciated value as of 1947 would be that much less than the depreciated value as of 1946. However, he ...