The opinion of the court was delivered by: CHARLES RONALD NORGLE, SR.
Before the court is defendants' motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
The court grants the motion for the following reasons.
In 1977, the State of Illinois adopted the Tax Increment Allocation Redevelopment Act, Ill. Rev. Stat. ch. 24, P 11-74.41 et seq. (the "Act"), to promote redevelopment in blighted or conservation areas. It sought to accomplish this goal through enabling Illinois municipalities to create tax increment financing districts ("TIF districts") in statutorily qualified areas within their boundaries. The municipalities could then use local real property tax increment and, after amendment in 1985, sales tax increment revenues to finance redevelopment costs. The participating municipalities become obligated to cover various redevelopment costs and are authorized to issue bonds and/or other obligations for financing.
The Village of Buffalo Grove on March 16, 1987, adopted a redevelopment project by Ordinance No. 87-25. Buffalo Grove authorized the issuance of $ 8.5 million in revenue bonds to cover the project costs. The ordinance provides that the bonds are limited obligations, payable solely from the collection of the incremental taxes and amounts on deposit in various funds and accounts. Incremental taxes include the amount of real property taxes due to Buffalo Grove in accordance with the Act, plus the amount of various sales taxes due to Buffalo Grove in accordance with the Act. The increments are calculated by a formula contained in the Act or its amendments. The provisions of the ordinance constitute a contract between Buffalo Grove and the registered owners of the bonds.
On March 1, 1987, Buffalo Grove issued its Tax Increment Allocation Revenue Bonds in the total principal amount of $ 8.5 million, for a term of 10 years, interest payable semi-annually, and principal payable at the expiration of the term. The security for the bonds, and the exclusive source for debt service on the bonds, include real property tax increment, municipal sales tax increment, and state sales tax increment. MSA Realty purchased the bonds on June 30, 1987.
MSA Realty filed suit on May 29, 1992 alleging that the State of Illinois and several executive officials -- Governor Jim Edgar, Director Douglas Whitley of the Department of Revenue, Treasurer Patrick Quinn, and Comptroller Clark Netsch, all in their official capacities -- impaired MSA Realty's contract rights in violation of the Contracts Clause of the United States Constitution. U.S. Const. art. I, § 10, cl. 1. MSA Realty further claims the defendants' actions and inactions constitute violations of the Fourteenth Amendment and the contracts clause, thus entitling it to relief under 42 U.S.C. § 1983.
MSA Realty maintains that the executive branch impaired the obligation of contracts by (1) seeking and obtaining a formula reduction in the statutory entitlement apportioned for the TIF districts, (2) failing and refusing to budget amounts the Act required, and (3) vetoing legislative appropriations "endeavoring to comply with the Act." MSA Realty further asserts that various legislative enactments impaired its contract rights by reducing the amount of tax increment revenues available for Buffalo Grove's TIF districts, thus impairing its right to the payment of interest and principal on the bonds. Furthermore, MSA Realty attempts to enjoin the Illinois General Assembly from entertaining the Governor's fiscal year 1993 budget proposal which expressly fails to budget any amount for the state sales tax increment program.
Defendants filed the present motions to dismiss contending that the complaint fails to state a claim and that the court lacks jurisdiction. The court will address the issues under each count of MSA Realty's complaint.
Count II of MSA Realty's complaint alleges a claim under Section 1983. On a motion to dismiss, all well-pleaded factual allegations are taken as true. Johnson v. Martin, 943 F.2d 15, 16 (7th Cir. 1991); Perkins v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The court also accepts all reasonable inferences drawn from those allegations as true. Meriwether v. Faulkner, 821 F.2d 408, 410 (7th Cir.), cert. denied, 484 U.S. 935, 98 L. Ed. 2d 269, 108 S. Ct. 311 (1987). The complaint need not specify the correct legal theory nor point to the right statute. Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992). However, a party fails to state a claim upon which relief may be granted if that party can prove no set of facts upon which legal relief may be granted. Ross v. Creighton Univ., 957 F.2d 410, 413 (7th Cir. 1992).
MSA Realty's Section 1983 claim is directed against the State of Illinois, as well as a number of executive officials. States and State officials acting in their official capacities are unamenable to suit under Section 1983. Will v. Michigan Dep't of State Police, 491 U.S. 58, 71, 105 L. Ed. 2d 45, 109 S. Ct. 2304 (1989). Accordingly, the court dismisses MSA Realty's Section 1983 claim alleged in Count II.
Count I contains MSA Realty's claim under the contracts clause. Lack of subject matter jurisdiction is appropriately raised in a motion to dismiss under Fed. R. Civ. P. 12(b)(1), and may be supported by any documents needed to resolve the issue. Barnhart v. United States, 884 F.2d 295, 296 (7th Cir. 1989), cert. denied, 495 U.S. 957, 109 L. Ed. 2d 743, 110 S. Ct. 2561 (1990). Once questioned, it is plaintiff's burden to establish that all jurisdictional requirements have been satisfied. Kontos v. U.S. Dept. of Labor, 826 F.2d 573, 576 (7th Cir. 1987). In this context, it is proper for the court to look beyond the jurisdictional allegations in ...