Appeal from the Circuit Court of Du Page County; the Hon.
Robert McClaren, Judge, presiding.
PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:
Arthur Rubloff & Company (Objector) objected to taxes extended on its property in Wayne Township for the year 1978. It appeals from the judgment which overruled its objections and found in favor of the applicant, the County Collector of Du Page County (Collector).
The case was heard on a stipulation of facts which repeated the material allegations contained in the objections, and upon the testimony of the town supervisor Roy Paeth. The Objector paid the 1978 taxes in full under protest and filed timely written objections. The appeal concerns objections to taxes extended for Wayne Township "for town purposes" in the amount of $27.88; "special bridge tax" in the amount of $81.04; "equipment and building tax" in the amount of $56.73; and "special road tax" in the amount of $162.08.
OBJECTION TO LEVY FOR TOWN PURPOSES
Wayne Township's budget and appropriation ordinance was adopted July 24, 1978, and filed with the county clerk on July 28, 1978. Its tax levy was adopted August 14, 1978, and filed with the county clerk on August 15, 1978. The budget for town purposes is itemized and totals $256,657. The levy is also itemized and totals $282,823. The disparity between the levy and appropriation for the item "administrative" produced a corresponding excess in the levy which translated to a tax of $27.88.
The Collector contends that the appropriation ordinance no longer limits the amount of the levy; or, alternatively, that the appropriation ordinance in question is not related to the tax levy for 1978 since the levy will not produce revenue to be spent on the appropriation ordinance in 1978. The Collector argues, based on the testimony of the town supervisor, that the practical reason for the difference between the appropriation ordinance and the levy, although for the year 1978, is that no revenue would be produced until some time in June of 1979 when taxes are first collected on this levy; and that the July 24, 1978, appropriation was executed with tax monies collected in 1978 on the levy made in 1977.
The Collector's argument that the appropriation ordinance no longer limits the amount of the levy relies on a change in the Illinois Municipal Code. The former statute (Ill. Rev. Stat. 1967, ch. 24, par. 8-3-1) contained the provision
"corporate authorities shall ascertain the total amount of the appropriations legally made for all corporate purposes to be provided for by the tax levy of that year. * * * [T]he corporate authorities shall levy not to exceed the total amount so ascertained * * *." (Emphasis added.)
The underlined language was removed before the 1978 tax year. See Ill. Rev. Stat. 1977, ch. 24, par. 8-3-1.
However, as the Objector states, the cited section 8-3-1 as presently constituted is directed solely at municipalities and does not govern townships. Ill. Rev. Stat. 1981, ch. 24, par. 1-1-2(1).
The Objector further argues that under the Illinois Municipal Budget Law (Ill. Rev. Stat. 1981, ch. 85, pars. 801 et seq.), which does include townships, an evident purpose is shown to make taxing bodies levy within the constraints of a budget, thus that the budget ordinance limits the levy for the same period. The Collector concedes that the Illinois Municipal Budget Law does govern townships but argues that there is nothing in its language which states that the budget ordinance limits the levy for the same period. It argues that, in effect, the only limitation on the levy is the maximum rate which may be levied and the good faith of the municipality. We cannot agree.
• 1 It has long been the view that appropriation ordinances are for the purpose of circumscribing the items for which taxes may be raised and constitute a limitation on the amounts to be raised. People ex rel. Larson v. Thompson (1941), 377 Ill. 104, 118; People ex rel. Ruchty v. Chicago & North Western Ry. Co. (1953), 1 Ill.2d 574, 578; cf. Diversified Computer Services, Inc. v. Town of York (1982), 104 Ill. App.3d 852, 857 (section 3 of the Illinois Municipal Budget Law (Ill. Rev. Stat. 1981, ch. 85, par. 803) has as one of its purposes "to require governmental bodies to budget in advance the funds to be expended for each purpose and, once a budget and appropriation ordinance is adopted, that only expenditures for those purposes and in the sums therein set forth are permissible").
The Collector's argument that the cited cases are no longer applicable because of the removal of the limitation in the Illinois Municipal Code (Ill. Rev. Stat. 1981, ch. 24, par. 8-3-1) is not persuasive. Wayne Township at the time of its appropriation and levy was subject to the Illinois Municipal Budget Law (Ill. Rev. Stat. 1977, ch. 85, par. 801 et seq.). Ruchty involved a 1949 school levy when school districts were subject to the budget law (Ill. Rev. Stat. 1949, ch. 120, par. 365.2) and the fact that school districts are no longer subject to the budget law does not diminish the rationale of that case and its applicability here. Also, the applicant's reliance on People ex rel. Prindable v. New York Central R.R. Co. (1947), 397 Ill. 50, is inapt because this involved a 1952 school levy after the legislature removed school districts from the Illinois Municipal Budget Law and added a provision to the school code to govern school budgeting so that the school code alone governed the 1952 levy. Here the Illinois Municipal Budget Law is being construed.
• 2 The real issue is whether the connection between the levy and the appropriation ordinance has been shown. It is true that if the ordinance had nothing to do with the levy but the expenditures were of dollars from past levies and other sources, the levy would be irrelevant and would not avoid the tax. (See People ex rel. Prindable v. Illinois Central R.R. Co. (1945), 389 Ill. 474, 477; People ex rel. Manifold v. Wabash R.R. Co. (1945), 389 Ill. 403, 409; People ex rel. Prindable v. New York Central R.R. Co. (1947), 397 Ill. 50, 55.) In Wabash, the court noted that there was no proof that the expenditure of any of the 1942 levy was to be made during the fiscal year commencing March 31, 1942, and ending March 29, 1943, for which the objected to appropriation had been made. The court noted that it followed that a budget and appropriation ordinance providing only for expending cash or cash items on hand of a previous year could not be considered as a budget of the revenue to be derived from a subsequent levy and that this did not invalidate the levy. (People ex rel. Manifold v. Wabash R.R. Co. (1945), 389 Ill. 403.) In Wabash, People ex rel. Larson v. Thompson (1941), 377 Ill. 104, was distinguished for the reason that in Thompson "the appropriation of money on hand was not involved." 389 Ill. 403, 409.
Here, Paeth, testifying in July of 1981, said by way of illustration that they were currently in their operating budget for the years 1981-1982 and that in September they would file a levy for 1982-1983 for the revenues to be received from June 1, 1982, through May of 1983. He said that there would not be a direct relationship between the budget and appropriation ordinance for ...