Judges May Order Increase in Taxes, High Court Rules

By William Snider — April 25, 1990 7 min read
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In a decision that surprised and delighted many civil-rights advocates, the U.S. Supreme Court ruled in a 5-to-4 decision last week that a federal judge’s powers to remedy a constitutional violation include the authority to order a governmental body to raise taxes.

All nine Justices concurred in the result of the case, which struck down a tax increase imposed directly by a federal judge on property owners in the Kansas City, Mo., school district.

But five members of the Court upheld an appellate-court ruling that the judge could instead order the district to raise taxes to fund its share of a half-billion-dollar desegregation remedy.

Excerpts on page 20 “To hold otherwise,” said the opinion written by Associate Justice Byron R. White, “would fail to take account of obligations of local governments, under the Supremacy Clause, to fulfill the requirements that the Constitution imposes on them.”

Some civil-rights advocates and constitutional scholars said the ruling allayed fears that the Court would use this case to restrict the powers of federal judges.

“The Court has made a strong statement that it is going to abide by the enforcement orders of district courts,” said Berry Friedman, a constitutional-law expert who teaches at Vanderbilt University.

The decision does not constitute a significant expansion of the federal judiciary’s powers, he said, but instead “clears away a lot of the gray area” surrounding a federal court’s powers to command enforcement of its orders.

“I think it’s going to embolden people litigating other constitutional cases, including other school cases,” Mr. Friedman said.

“The principle established by the Court is applicable in any case where a government defendant is ordered to fund a constitutionally required remedy and is unable to meet that obligation,” said Allen R. Snyder, a lawyer for the Washington-based firm of Hogan & Hartson, which represented the school district.

“It’s not a common situation, but it could arise in other cases,” he said.

The federal judge overseeing the Little Rock, Ark., desegregation case has indicated that he might use such powers if Little Rock voters refuse--as voters in Kansas City repeatedly have--to approve a property-tax increase needed to fund that district’s desegregation plan. Such a measure was being voted on by Little Rock residents late last week.

Jerald L. Hill, president of the Landmark Legal Foundation, which represents Kansas City taxpayers, described the ruling as a “mixed bag.’'

“We are very pleased,” he said, “with the strong statement” that the tax increase imposed by the judge “was an abuse of discretion.”

But granting a judge the power to allow the school district to raise taxes, in contravention of state law, “we still view as an inappropriate use of judicial power,” he said, “although it’s probably better than having an unelected judge do it.”

Challenging the notion that the Court’s decision will be broadly applicable to other cases, Mr. Hill also said that “it will be up to the next court that reviews this issue to decide whether [the majority’s opinion] was dictum or not.”

The majority’s opinion, as crafted by Justice White, explicitly avoided ruling on whether a tax increase ordered by a federal judge would violate the Constitution. It said that the option of ordering the district to raise taxes was “less obtrusive” and should have been attempted first.

A concurring opinion written by Associate Justice Anthony M. Kennedy took strong exception with the majority’s logic, saying that the distinction between the two schemes “is but a convenient formalism” and that both are clearly unconstitutional.

“Today’s casual embrace of taxation imposed by the unelected, life-tenured judiciary disregards the fundamental precepts for the democratic control of public institutions,” he wrote.

The case before the Court, Missouri et al. v. Jenkins et al. (No. 88-1150), was an outgrowth of a lawsuit first filed against the state and suburban districts by the Kansas City school system, which was later realigned as a defendant.

The district has continued to cooperate with the remaining plaintiffs, the district’s black families, in devising a desegregation remedy widely considered the most comprehensive yet approved by the federal courts.

U.S. District Judge Henry Woods, who oversees the case, has approved plans requiring a majority of district schools to be converted to magnets, and sufficient capital and educational improvements to bring the district up to a level of quality comparable to that of surrounding suburbs.

Judge Woods required the state and the school district to share the cost of the plan. In 1987, when it became apparent that the district could not raise its share of the funds, he ordered that property-tax rates in the district be virtually doubled, and imposed an income-tax surcharge on employees who worked within the district’s boundaries.

The U.S. Court of Appeals for the Eighth Circuit last year struck down the income-tax surcharge and ruled that future property-tax hikes needed to fund the plan should be set by the school district, rather than by Judge Woods.

The High Court’s five-member majority affirmed that part of the ruling, ensuring that the district’s share of funds can be collected through property-tax increases in future years.

Refunds to Taxpayers?

But the Eighth Circuit also had ruled that the previous year’s court-ordered tax increase was “affirmed,” a ruling the Supreme Court was unanimous in reversing last week.

That portion of the decision raises the possibility that some $30 million in property taxes collected during the 1987-88 school year may have to be refunded to Kansas City taxpayers.

The Court did not indicate whether or not such refunds would be required, but Mr. Hill said last week his organization would ask for the money to be refunded.

There will also be “some dispute” over the legality of property-tax increases collected in the following two years, he said, because it is unclear whether the taxes were collected under Judge Woods’s order or under the Eighth Circuit’s modification to that order.

Regardless of the outcome of this dispute, Mr. Snyder of Hogan & Hartson said, “it is important to note that the remedy will continue and will be funded,” because under previous rulings, “the state will be required to fund any remedial cost that the district cannot fund.”

An earlier order finding the state and district “jointly and severally liable” for the cost of the plan put the state’s lawyers in the awkward position of arguing that state laws preventing the district from raising taxes should be left intact, even if that meant the state would then bear a larger burden of funding for the plan.

Scale of Remedy Questioned

One of the state’s principal arguments against the tax increase was that the cost of the plan was excessive, and that Judge Woods would not have needed to order a tax increase if he had scaled down the plan.

This view appeared to win support among the four Justices who filed the concurring opinion, including, in addition to Justice Kennedy, Chief Justice William Rhenquist and Associate Justices Sandra Day O’Connor and Antonin Scalia.

“It cannot be contended that interdistrict comparability, which was the ultimate goal of the district court’s orders, is itself a constitutional command,” Justice Kennedy wrote.

Noting that the district court’s orders mandate a number of unusual educational features, including a 25-acre farm, he said “it may be that a mere 12-acre petting farm, or other corresponding reductions in court-ordered spending, might satisfy constitutional requirements.”

The Court, however, had declined to review the scope of the remedy when accepting the case, although, as some observers pointed out, it would have taken only the four votes of the concurring justices to do so.

The concurring opinion contains the first broad statements on school-desegregation remedies issued by members appointed to the Court by President Reagan.

It questions the validity of using magnet schools to encourage white students to enroll in the system. “A remedy that uses the quality of education as a lure to attract nonminority students will place the District Court at the center of controversies that by tradition are left to this nation’s communities,” it says.

The opinion also appears to dispute the power of federal judges to mandate specific educational improvements, which constitute a substantial portion of many desegregation plans approved in the 1980’s.

“An initial finding of discrimination,” it says, “cannot be used as the basis for a wholesale shift of authority over day-to-day school operations from parents, teachers, and elected officials to an unaccountable district judge whose province is law, not education.”

A version of this article appeared in the April 25, 1990 edition of Education Week as Judges May Order Increase in Taxes, High Court Rules


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