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Supreme Court of Ohio: Delaware Vocational loses tax rate calculation appeal

Special to the Legal News

Published: March 20, 2017

A divided Ohio Supreme Court last week ruled 4-3 to deny a request from the Delaware Vocational School District Board of Education to compel Ohio Tax Commissioner Joe Testa to calculate tax rates based on a 2015 multicounty renewal levy.

The per curiam majority opinion, joined by Justices Terrence O'Donnell, Sharon Kennedy, William O'Neill and Patrick DeWine, held that the election results were not "properly certified to the tax commissioner" and therefore, Testa had "no clear legal duty to apply the reduction factors and calculate the tax rates for this levy."

In her dissent, Chief Justice Maureen O'Connor wrote that the majority's decision "will become a case study in the law of unintended consequences."

The case stemmed from the impending expiration of a levy that funds the Delaware Joint Vocational School District on Dec. 31, 2016.

The district, which provides career and technical education for students who live in Delaware County and portions of Franklin, Marion, Morrow and Union counties, passed a resolution in July 2015 to submit a renewal levy to voters at the November 2015 general election.

The school board certified the resolution to the Delaware County Board of Elections which was required to notify the boards of elections of the other four counties so that the levy could be placed on the ballot in those counties.

The Delaware County Board of Elections, however, failed to send the resolution to the other four boards of elections and falsely told the Secretary of State that there were no overlapping counties involved in the election.

As a result, at the November 2015 general election, the renewal levy did not appear on the ballots of affected voters residing within the school district in Franklin, Marion, Morrow and Union Counties.

Then, the Delaware County Board of Elections used the wrong form (From 125, instead of the required Form 5-U for multicounty elections) to certify the results of the election.

As a result, the levy was not included in property-tax bills sent to property owners in the school district in 2016.

The school board asked the high court for a writ of mandamus in order to compel the commissioner to calculate tax rates for the levy so that it could be included in corrected tax bills sent in 2017.

According to the school district, the tax commissioner has no authority to question the validity of an election that has been certified by a board of elections and a certificate of election which was "conclusive" of the levy's passage.

The school board claimed that the tax commissioner has a "mandatory ministerial duty" to calculate tax rates.

In its opinion, the Supreme Court's majority held that the Delaware County Board of Elections used the wrong form to certify the results of the election. The correct form would have certified the results of a multicounty election and the majority pointed out that the other counties in the school district never voted on the levy.

"Here, because the election results have not been properly certified to the tax commissioner, he could not determine that the tax had been authorized to be levied; thus, he has no clear legal duty to apply the reduction factors and calculate the tax rates for this levy," the majority wrote. "Accordingly, the school district has no clear legal right to relief and the tax commissioner has no clear legal duty to act, and the requested writ of mandamus is denied."

In her dissent, the chief justice wrote that she disagreed with the legal premise on which the majority based its decision.

"A county board of elections and a county auditor are not required to submit a copy of Ohio Secretary of State Form 5-U to the Ohio Tax Commissioner," O'Connor wrote. "Ohio Secretary of State Form 125 is a designated form for reporting the results of tax levies to the tax commissioner."

O'Connor noted that the majority's primary theory of the case rested on the assumption that a Form 5-U was required to be submitted to the tax commissioner and because no Form 5-U was submitted, the tax commissioner's duty to calculate the reductions was never triggered.

"The majority opinion begs the question that lies at the heart of this case: Having received a Form 125 certification, what gave the tax commissioner the authority to look beyond this certification and demand additional documentation?" she wrote.

According to the majority, the tax commissioner was within his discretion to demand a copy of the Form 5-U in order to ensure that the levy had been properly approved, but the minority held that it could identify no authority for that proposition.

"Rather, pursuant to R.C. 319.301(D), the tax commissioner has a clear legal duty to conduct the ministerial functions of his office, and because he has refused to do so, a writ of mandamus should issue," the chief justice wrote.

She also noted that "it may seem uncontroversial" to support the tax commissioner's decision when both parties agreed that the board of elections made a mistake.

"But the next time the tax commissioner decides, in the exercise of his supposed discretion, that a tax levy is invalid, the facts may be disputed and the governing law uncertain," O'Connor wrote. "The result in that situation will be the resolution of an election challenge in litigation between the tax commissioner and the local school district, a lawsuit from which the most essential parties - the secretary of state, the local board of elections, or even an affected elector - will be absent.

"This is not what the General Assembly envisioned when it enacted a comprehensive statutory scheme for election challenges in Chapter 3515 of the Revised Code."

The chief justice was joined in her dissent by Justices Judith French and Patrick Fischer.

The case is cited State ex rel. Delaware Joint Vocational School Dist. Bd. of Edn. v. Testa, Slip Opinion No. 2017-Ohio-796.

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