Thursday, February 01, 2007
On this day:

Court: Alabama's tax code is Alabama's business

The latest attempt by the state's would-be tax-hikers to achieve in court what they can't achieve at the ballot box has been rebuffed by the Eleventh Circuit Court of Appeals. The Birmingham News reports:

A federal appeals court upheld a district court ruling Wednesday that Alabama's property tax system does not cause "the continuing segregation of its colleges and universities."

The ruling was in response to the challenge of the tax system filed by plaintiffs in Alabama's 25-year-old higher education desegregation case, which was settled in December. After a 2004 hearing on the challenge, the presiding district judge in the higher ed case, Harold Murphy, rejected it, and a three-judge panel of the 11th U.S. Circuit Court of Appeals agreed with his reasoning.

"We cannot permit federal lawsuits to be transformed into amorphous vehicles for the rectification of all alleged wrongs," wrote 11th Circuit Chief Judge James Edmondson and Judges James Hill and Phyllis Kravitch.

That comment reflected the basic argument of Robert Hunter, who represented the state in the higher ed case and in the property tax challenge.

"We were not trying to solve all the problems of the world or even all the problems of Alabama," Hunter said. "While this may be a problem in Alabama, it's not one that was to be addressed in this litigation." ...

According to the 27-page decision issued by the three-judge panel, the plaintiffs argued that, because Alabama's constitutional limits on property taxes did not provide sufficient funding for K-12 schools, the state had to make up the difference with funds that should have gone to higher education. As a result, colleges and universities had to raise tuition and fewer dollars were available for student aid, and that meant lower black enrollment. ...

The case is Knight v. Alabama, and the court's opinion is available online here.

The Birmingham News article fails to note just how radical a remedy the plaintiffs sought in this case. For that, we have to read the Court's opinion:
...plaintiffs request an injunction ordering Alabama to fund adequately its system of lower education, and to do so by developing an entirely new method of public school finance in the state. Plaintiffs contend that only the complete reformation of Alabama’s school finance system for lower education –including the invalidation of certain provisions of the Alabama Constitution that limit both the rates and actual revenues from property taxation – will allow the State to raise the revenue necessary to adequately fund its K-12 schools. And, only when Alabama’s public schools are adequately funded, according to plaintiffs, will there be sufficient other funds to achieve the remedial goals of this lawsuit. Therefore, plaintiffs asked the district court to invalidate the property tax limitations of the Alabama Constitution and to enjoin the State to reform its method of public school finance within one year to provide adequate and equitable funding for its K-12 schools.
Read through that again and let it sink in. The plaintiffs were asking a group of unelected federal judges to order the State of Alabama to completely rewrite its tax code, without regard to the wishes of the state's citizens, and without regard to the legislative processes established by the Alabama Constitution. There's a old but familiar name for that approach to governing: it's called taxation without representation, and we fought a war over it one time, in case anyone has forgotten.

The idea that the federal courts or any branch of the federal government can compel a state to overhaul its system of taxation is at odds with the U.S. Constitution, both in letter and spirit. The plaintiffs' attorneys in this case should know better. Didn't they attend law school? Haven't they ever read the U.S. Constitution? Are they familiar with the term federalism?

The states are not agencies of the national government. They are sovereign entities which by virtue of their existence possess certain powers that cannot be taken away by any other sovereign authority, including the federal government. Among those inherent powers is the power to tax. In Federalist 32, Alexander Hamilton wrote:
...I am willing here to allow the justness of the reasoning which requires that the individual States should possess an independent and uncontrollable authority to raise their own revenues for the supply of their own wants. And making this concession, I affirm that (with the sole exception of duties on imports and exports) they would, under the plan of the convention, retain that authority in the most absolute and unqualified sense; and that an attempt on the part of the national government to abridge them in the exercise of it would be a violent assumption of power, unwarranted by any article or clause of its Constitution.
Did you get that? Under the U.S. Constitution, the states' authority to tax is "independent and uncontrollable," and any attempt by the federal government to control it "would be a violent assumption of power." Mr. Hamilton didn't mince words.

In a footnote to yesterday's opinion, the Eleventh Circuit Court reiterated Hamilton's sentiment by quoting the following from the 1973 Supreme Court opinion in San Antonio Independent School District v. Rodriguez:
The consideration and initiation of fundamental reforms with respect to state
taxation and education are matters reserved for the legislative processes of the
various States. . . . the need is apparent for reform in tax systems which may well
have relied too long and too heavily on the local property tax. . . . but the ultimate
solutions must come from the lawmakers and from the democratic pressures of those who elect them.
In spite of all this, the lead plaintiff's attorney, Jim Blacksher, is threatening to appeal to the U.S. Supreme Court. I doubt seriously that the Supremes will take the case, but in a way, I hope they do. It'll be fun watching Justice Scalia rip it to shreds.