Argument Report: Taxpayer Standing to Challenge Education Financing?

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Our reports on the oral arguments of the Illinois Supreme Court's September term continue with Carr v. Koch. In Carr,  the taxpayer plaintiffs are challenging Circuit Court and Appellate Court decisions that they lacked standing to challenge the state's education funding statute; but based on the Court's questioning, it appears unlikely that their suit will be revived.

Click here for our summary of the facts and lower court ruling in Carr. Plaintiffs are two taxpayers, one in a northern Illinois school district, one in a southern district. Plaintiffs allege that the state's financing system effectively requires school districts with lower property values to tax their property owners more heavily than other districts with higher property values do. As we noted in our argument preview, the plaintiffs faced two problems: the Supreme Court had earlier upheld the very same statute in Edgar, and the state authorities -- the defendants in the action -- weren't the ones who set the plaintiffs' tax rates. The trial court dismissed, and the Appellate Court affirmed.

Although the Appellate Court had denied standing on the grounds that none of the state's actions or omissions had caused plaintiffs' tax rates, counsel for the plaintiffs disagreed before the Supreme Court, arguing that the state funding system was a but-for cause of the local taxing authorities' tax rate decisions. Justice Thomas asked how counsel defined plaintiffs' injury, and counsel responded that plaintiffs were taxed more heavily to reach the "Foundation Level" of education funding. Justice Thomas followed up, asking counsel whether his position was that this injury was a direct result of the statute, or didn't have to be in order to have standing. Counsel answered that the statute was a direct cause of the injury. Justice Burke asked counsel whether a penalty was imposed if a particular school district failed to meet the Foundation Level of funding; counsel argued that the threat of sanctions from the state was inherently coercive. Justice Thomas asked whether state funding was tied directly to state learning standards. When counsel answered "no," Justice Thomas asked how counsel addressed the argument that plaintiffs' injury was too attenuated to confer standing. Counsel responded that the injury was unequal taxing treatment.

Counsel for the Attorney General faced relatively few questions from the Court. Justice Karmeier asked whether a school district would face a penalty if it set an extremely low tax rate. Counsel responded that the State assumed a 3% tax rate, but took no action if a local authority failed to match that rate. Counsel for the State challenged the plaintiffs' claim of injury, pointing out that the State could only take over a local school district once it had ranked below statewide learning standards for eight straight years. In the meantime, the state took various steps which were to the advantage of both students and taxpayers, casting doubt on a claim of injury.

The Court had no further questions during plaintiffs' rebuttal. Counsel responded to the Attorney General's argument by insisting that the degree to which local control had been superseded -- the central question in determining whether Edgar barred the plaintiffs' claim -- was an issue of fact for the jury to determine.

 

Published In: Civil Procedure Updates, Constitutional Law Updates, Education Updates, Residential Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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