ATTORNEYS FOR APPELLANT:
ATTORNEYS FOR APPELLEE:
PATRICK A. SHOULDERS
KEITH W. VONDERAHE
Ziemer, Stayman, Weitzel & Shoulders, LLP
Barber, Shoulders & Siesky, LLP
STANLEY C. FICKLE
Barnes & Thornburg LLP
COURT OF APPEALS OF INDIANA
STATE OF INDIANA ex rel.
APPEAL FROM THE VANDERBURGH CIRCUIT COURT
The Honorable Carl Heldt, Judge
Cause No. 82C01-0509-PL-718
June 16, 2006
OPINION - FOR PUBLICATION
Appellant-plaintiff State of Indiana ex rel. Willard Library (Willard) appeals from the
trial court’s order granting appellant-defendant Evansville-Vanderburgh Public Library’s
(EVPL) motion to dismiss Willard’s complaint. In particular, Willard argues that the trial
court erred in interpreting Indiana Code section 36-12-7-8 to mean that EVPL has the
authority to calculate the amount of tax necessary to support Willard’s budget. Additionally,
Willard argues that even if EVPL has such authority, its action in fixing Willard’s budget, tax
rate, and tax levy was arbitrary, capricious, unreasonable, and contrary to Indiana law
because it failed to publish and hold a public hearing on the budget it intended to pass.
Concluding that the legislature did not intend EVPL’s authority to levy the tax to be a purely
ministerial function, and finding no other error, we affirm the judgment of the trial court.
Willard is a private donation library within the meaning of Indiana Code section 3612-7-8. It was incorporated in 1881 to serve the City of Evansville (City) and to carry out the
terms of a private trust. Pursuant to its articles of incorporation, Willard has a selfperpetuating seven-member board of directors, all of whom must be residents of the City.
During all periods of its operation, Willard has been and continues to be open and free to
residents of Vanderburgh County and neighboring counties. At all relevant times, Willard
has received public financial support through a tax levy.
We heard oral argument on this matter on May 3, 2006, in Indianapolis.
EVPL is a Class 1 public library, 2 a municipal corporation, 3 a taxing unit, 4 and a
political subdivision. 5 Its board has seven members, who are appointed as follows: two
members by the Board of County Commissioners of Vanderburgh County, two members by
the County Council of Vanderburgh County, and three members by the school board of the
school corporation serving the library district.
Historically, Willard has received or been eligible to receive tax revenues from a tax
levy by the City. The statutes provided for the City to levy a tax for Willard within a
specified range, and between 2001 and 2005, that range was between $.0067 and $.0167 for
each $100 of the assessed value of all real and personal property in the City. In operating
pursuant to this statutory scheme, the City calculated the amount of the tax levy for Willard
and routinely modified Willard’s budget requests.
Before July 1, 2005, the tax rate base for Willard’s tax levy was determined by the
number of residents within the City and was levied by the City Council. But the statute was
amended, effective July 1, 2005, and now provides that the tax rate is based upon all of the
residents of Vanderburgh County, increasing the tax rate base by approximately forty-one
percent. Moreover, the tax is now levied by EVPL.
On June 16, 2005, Willard, through an open and public meeting of its board of
trustees, approved its proposed budget for the 2006 calendar year. Its proposed budget
Ind. Code §§ 36-12-2-1 et seq.
I.C. § 36-12-2-2(a).
Ind. Code §§ 6-1.1-1-21, 36-12-2-2(c).
I.C. § 6-1.1-1-12.
included an increase of 22.41% for the tax-funded portion. EVPL published Willard’s
proposed 2006 budget in the Evansville Courier & Press on August 18, 2005, and again on
August 25, 2005. EVPL also conducted a public hearing concerning Willard’s proposed
2006 budget on August 27, 2005.
On September 8, 2005, EVPL rejected Willard’s proposed 2006 budget, and, in its
place, EVPL fixed a 2006 budget for Willard that was, essentially, Willard’s 2005 budget
with a 3.9% increase. This amount was approximately $120,000 less than that provided for
by Willard’s proposed budget. EVPL notes that most local governments in Indiana were
limited to a 3.9% budget increase for 2006.
On September 12, 2005, EVPL filed Willard’s approved budget, tax rate, and tax levy
with the Vanderburgh County Auditor. That same day, Willard filed a verified complaint for
order of mandate, asserting that EVPL illegally created and fixed Willard’s 2006 operating
budget. Also on that same day, EVPL filed a motion to dismiss Willard’s complaint.
On September 20, 2005, the trial court conducted a hearing on all pending pleadings
and motions. At the hearing, the trial court granted Willard’s motion for leave to amend the
complaint. But following the hearing and on the same date, the trial court granted EVPL’s
motion to dismiss and declared that EVPL “has the authority to determine the amount of the
tax to be levied, within the statutory limits, to support the budget requests made to it by
[Willard].” Appellant’s App. p. 60. Willard now appeals.
DISCUSSION AND DECISION
Willard argues that the trial court erred in concluding that EVPL has statutory
authority to calculate the amount of the tax to be levied in favor of Willard and that, even if
EVPL has such authority, its action here was arbitrary, capricious, unreasonable, and
contrary to Indiana law. As we consider these arguments, we observe that the interpretation
of a statute is a question of law reserved for the courts. State v. Hart, 669 N.E.2d 762, 763
(Ind. Ct. App. 1996). Therefore, appellate courts review questions of law under a de novo
standard and owe no deference to a trial court’s legal conclusions. Montgomery v. Estate of
Montgomery, 677 N.E.2d 571, 574 (Ind. Ct. App. 1997).
If a statute is clear and
unambiguous, the court may not interpret it. Skrzypczak v. State Farm Mut. Auto Ins., 668
N.E.2d 291, 295 (Ind. Ct. App. 1996). The standard of review for constitutional questions is
also de novo. Griffith v. State, 788 N.E.2d 835, 839 (Ind. 2003).
I. Statutory Authority to Calculate Tax Levy
Willard argues that while the clear and unambiguous statutory language admittedly
gives EVPL the authority to levy the tax, it does not give EVPL the authority to calculate the
amount of the tax to be levied. EVPL disagrees and argues that Willard’s interpretation
renders the statue unconstitutional, inasmuch as it gives a private corporation taxing power.
Willard first directs our attention to authority providing that it is just as important to
recognize what a statute does not say as to recognize what it does say. State ex rel.
Schuerman v. Ripley County Council, 182 Ind. App. 616, 619, 395 N.E.2d 867, 870 (1979).
Furthermore, it is a well-established rule of statutory construction that statutes imposing or
levying taxes are not to be extended, by implication, beyond the clear import of the language
of the statute to enlarge their operation. Van Orman v. State, 416 N.E.2d 1301, 1305 (Ind.
Ct. App. 1981). With these tenets in mind, we turn to the relevant statutory language:
(a) As used in this section:
“county fiscal body” means the fiscal body of a county in
which a private donation library is located;
“library board” means a library board established under IC
20-14 in a county in which a private donation library is
“private donation library” means a public library:
established by private donation;
located in a city having a population of more than one
hundred twenty thousand (120,000) but less than one
hundred fifty thousand (150,000);
that contains at least twenty-five thousand (25,000)
that has real property valued at at least one hundred
thousand dollars ($100,000); and
that is open and free to the residents of the city.
(b) The library board shall:
levy a tax under IC 6-1.1 in an amount not less than sixtyseven hundredths of one cent ($0.0067) and not more than
one and sixty-seven hundredths cents ($0.0167) on each one
hundred dollars ($100) of the assessed valuation of all the
real and personal property in the county . . . .
(d) The trustees of the private donation library shall annually submit a
budget to the library board.
(f) For purposes of the property tax levy limits under IC 6-1.1-18.5, the
tax levied by the library board under subsection (b)(1) is not
included in the calculation of the maximum permissible property tax
levy for the public library.
I.C. § 36-12-7-8 (the Private Donation Library Statute) (emphases added).
Willard points out that the word “budget” is included only in subsection (d) of the
statute, concluding that after Willard submits the required budget to EVPL, EVPL’s required
action is purely ministerial: it “shall levy a tax under IC 6-1.1 . . . .” Id. According to
Willard, the statute “does not grant the EVPL the authority to reject, revise, determine, fix[,]
or otherwise disturb Willard’s budget, tax rate[,] or tax levy, which is exactly what the EVPL
did on September 8, 2005.” Appellant’s Br. p. 10.
But the Private Donation Library Statute provides that the tax must be levied “under
IC 6-1.1,” I.C. § 36-12-7-8(b)(1), which, in turn, directs that “[t]he officers of political
subdivisions shall meet each year to fix the budget, tax rate, and tax levy of their respective
political subdivisions for the ensuing budget year . . . .” Ind. Code § 6-1.1-17-5(a). Thus, the
plain language of the Private Donation Library Statute provides that EVPL must levy the tax,
which, in turn, means that it must “fix” the budget, tax rate, and tax levy. Consequently, it is
apparent that the legislature did not intend the EVPL’s tax levy to be a purely ministerial
Willard admits that EVPL is a political subdivision, while Willard is not, but it argues
that because it is not a “respective political subdivision” of EVPL, the statute enabling EVPL
to “fix” the budget, tax rate, and tax levy does not apply. But because the Private Donation
Library Statute commands that EVPL shall levy the tax “under IC 6-1.1,” it necessarily
applies. I.C. § 36-12-7-8(b)(1).
Willard also contends that EVPL does not have the power to determine the amount of
Willard’s tax levy, inasmuch as the General Assembly has already determined the amount—
it shall not be less than $.0067 and not more than $.0167 on each $100 of Vanderburgh
County’s assessed valuation. I.C. § 36-12-7-8(b)(1). Thus, according to Willard, when it
submits a budget to EVPL with a proposed tax rate and levy within that range, EVPL does
not have authority to make any changes.
This interpretation of the statute, however, enables Willard to evade the political and
other controls to which political subdivisions are subject in determining their budgets, tax
rates, and tax levies. Willard’s status as a private entity should not make it immune from the
procedural and other property tax controls that constrain local governments. Indeed, if
Willard is permitted to unilaterally determine the tax-funded portion of its budget, tax rate,
and tax levy, then there would be no point in EVPL going through the procedural steps set
forth in Indiana Code section 6-1.1. Essentially, Willard’s argument makes its proposed
budget untouchable in that public hearings and taxpayer objections would be pointless if
EVPL is not permitted to make revisions. Such an interpretation is untenable.
We turn next to the legislative history of the Private Donation Library Statute. For a
century, Indiana statutes provided for the City to levy a tax within some permitted range to be
used for Willard’s support. Pursuant to those statutes, the City, not Willard, calculated the
amount of Willard’s tax levy. Nothing in the Private Donation Library Statute indicates that
the legislature intended to alter that exercise of discretion by the local government entity that
is responsible for levying the tax. Indeed, since 1983, the governing statute provided for the
City Council to levy the tax according to Indiana Code 6-1.1, just as the Private Donation
Library Statute does. It is apparent that the statute, as enacted, merely substituted EVPL for
the City Council as the local government entity that is responsible for levying the tax.
Moreover, an earlier version of the bill provided for Willard to submit a “proposed”
budget for EVPL’s “review.”
Appellant’s App. p. 58.
But that version created a
fundamentally different scheme, pursuant to which Willard, EVPL, and the City Council
could negotiate a joint agreement. Id. Under that scheme, EVPL would levy the tax but the
City Council would retain approval power over Willard’s budget. Thus, EVPL was entitled
to review Willard’s proposed budget under that scheme so that EVPL would have input into
the budget even as the City Council retained the right of final approval. But under the
enacted Private Donation Library Statute, there is no joint responsibility, and the City
Council has no role whatsoever. Thus, the most logical explanation for the deletion of “for
its review” is that the words were redundant given the reference to Indiana Code 6-1.1, which
entitles EVPL to “fix” the tax-funded portion of Willard’s budget.
Finally, we acknowledge that the Private Donation Library Statute could have been
more artfully drafted. It is imprecise and should be more specific in terms of the respective
roles of EVPL and Willard. But Willard’s interpretation of the statute would render it
unconstitutional, inasmuch as it would give private entities6 the power to set a tax rate and
Willard acknowledges that it is a private entity.
levy, which is constitutionally impermissible. See, e.g., Hollingsworth v. State Bd. of Barber
Exam’rs, 217 Ind. 373, 383, 28 N.E.2d 64, 68 (Ind. 1940) (holding that statute delegating to
private parties the power to set minimum prices and maximum hours for barbers was
unconstitutional delegation of legislative power). Article 3, section 1 of the Indiana
Constitution divides governmental powers among the Legislative, Executive (including
Administrative), and Judicial departments, generally prohibiting officials of one department
from exercising the functions of another. Additionally, Article 4, section 1 of the Indiana
Constitution vests in the General Assembly the legislative authority of the State.
Essentially, Willard responds that the Private Donation Library Statute does not
conflict with the above authority, inasmuch as EVPL is the body that actually levies the tax.
Hence, the taxing authority is delegated to EVPL, a public entity, rather than Willard, a
private corporation. Moreover, the legislature has already determined the permissible range
of the tax levied in favor of Willard.
It is apparent to us, however, that the distinction between calculating the amount of a
tax levy and actually levying the tax is merely a semantic one. Because Willard’s
interpretation would give it unilateral authority to set the amount of the tax levy, the actual
decisionmaking power would be in its hands, rather than EVPL’s. The only “limitation”
would be that a government agency or official must take whatever ministerial action is
necessary to implement the private entity’s decision. Thus, Willard’s interpretation of the
statute would render it unconstitutional. A fundamental tenet of statutory interpretation is
that if there are two reasonable interpretations of a statute, one of which is constitutional and
the other not, we will choose the constitutional interpretation because we will not presume
that the legislature violated the constitution. Gray v. Daimler Chrysler Corp., 821 N.E.2d
431, 435 (Ind. Ct. App. 2005). Consequently, however inartfully drafted the Private
Donation Library Statute may be, we must interpret it in a way that renders it constitutional.
Because Willard’s interpretation of the statute would render it unconstitutional, its argument
II. Publication of and Hearing on Willard’s Budget
Finally, Willard argues that even if we conclude that EVPL has the authority to
calculate the amount of the tax levy, its actions herein were arbitrary, capricious,
unreasonable, and contrary to law. Specifically, it argues that while EVPL published
Willard’s proposed budget and held public hearings thereon, it neither published nor held
public hearings on the budget, tax rate, and tax levy it “always estimated and intended to
pass . . . .” Reply Br. p. 2. Although Willard’s proposed budget provided for a 22.41%
increase in tax funding, Willard argues that EVPL always intended to put in place a 3.9%
increase to accord with statewide practice for budgeting for 2006. According to Willard,
EVPL’s failure to publish the altered 2006 budget occurred because EVPL “wanted to avoid
public participation in favor of Willard and eliminate the political and other restraints placed
upon it as decisionmakers.” Id. at 3. EVPL responds that it is “nonsense” to suggest that a
political subdivision must adopt the identical budget, tax rate, and tax levy that was published
and that was the subject of the public hearing. Appellee’s Br. p. 36.
Initially, we observe that Willard’s verified complaint included the following
10. In accordance with applicable Indiana tax laws, Willard’s proposed
2006 budget was published in the Evansville Courier & Press on August
18, 2005, and again on August 25, 2005.
11. In further compliance with applicable Indiana laws, a public hearing
concerning Willard’s proposed 2006 budget was held on August 29,
Appellant’s App. p. 7 (emphases added). Thus, Willard may not argue on appeal that either
the publication or the public hearing on its proposed budget was in any way unlawful. Lutz
v. Frick Co., 242 Ind. 599, 605, 181 N.E.2d 14, 18 (1962) (holding that a party “is precluded
on appeal from denying the existence of facts which were alleged in its pleadings in the trial
court”); see also Rundel v. Shady, 492 N.E.2d 694, 696 (Ind. Ct. App. 1986) (holding that a
verified complaint is conclusive as to the admitted facts, and the plaintiff may not introduce
evidence to contradict those facts).
To the extent that Willard is arguing that EVPL should have held an additional public
hearing on the budget it ultimately passed, we turn to Indiana Code section 6-1.1-18-1, which
provides that “the officers of a political subdivision may not fix a budget or tax levy which
exceeds the amount published by the political subdivision.” (Emphasis added). This
language clearly indicates that the political subdivision may fix a budget and tax levy that is
less than the published amount. Moreover, we agree with EVPL that there would be no point
in the publication and public hearing if the proposed budget could not be altered thereafter.
Nothing in the Private Donation Library Statute or Indiana Code section 6-1.1 indicates that
the EVPL’s actions with respect to publication or the public hearing were in any way
arbitrary, capricious, unreasonable, or contrary to law.
The judgment of the trial court is affirmed.
MAY, J., concurs.
SULLIVAN, J., concurs with opinion.
COURT OF APPEALS OF INDIANA
STATE OF INDIANA ex rel.
SULLIVAN, Judge, concurring in result
The trial court’s ruling was a dismissal of Willard’s complaint for a Writ of
Mandamus. The complaint sought an order directed to EVPL requiring EVPL to submit the
budget as proposed by Willard to the County Auditor. It was asserted that EVPL had no
authority to fix or modify the budget as submitted by Willard.
Although I concur in the affirmance of the trial court’s dismissal of the complaint, I
respectfully disagree with the rationale of my colleagues which reaches that result.
A crucial inconsistency exists between the Private Donation Library Statute, I.C. §
36-12-7-8, requiring that the tax must be levied “under IC 6-1.1” and the majority’s reliance
upon I.C. § 6-1.1-17-5(a) to reach the conclusion that EVPL must levy the tax and therefore
must “fix” the budget for Willard.
Indiana Code § 6-1.1-17-5(a) covers only budgets of political subdivisions. Willard is
not a political subdivision. See Ind. Code § 6-1.1-1-12 (Burns Code Ed. Repl. 2003). In this
respect it is my view that I.C. § 6-1.1-17-5(a) cannot be used to hold that EVPL must fix the
budget of an entity which is not a political subdivision. If that authority is to be found it must
be found elsewhere under I.C. 6-1.1.
Be that as it may, neither Willard nor EVPL has brought to our attention any other
statutory provision which governs the matter of private donation library budget approval by
the Library Board.
To be sure, common sense, as well as a necessity to make some reasonable
provision for budgetary approval and fixing and levying an appropriate tax to fund private
donation libraries, would seem to be dictated. However, the statutory gap is an
insurmountable hurdle. We are not at liberty to create the appropriate legislation to meet
Having said that, it appears to me that EVPL must fix a tax levy to fund Willard in an
amount of not less than $.0067 and not more than $.0167 for each $100 of Vanderburgh
County’s assessed valuation. This does not mean, however, that EVPL must rubber stamp
Willard’s proposed budget; nor does it give EVPL the authority to recraft a budget for
Willard which EVPL thinks is more appropriate or reasonable. This impasse indicates that
the ultimate taxing authority, which rests with the Library Board, permits EVPL in its
discretion to set the tax rate somewhere within the one-penny range provided by statute. 7
When this has been done and it is ascertained how much tax revenue will be provided for
Willard thereby, Willard must necessarily tailor its budget to meet the tax revenue produced
in conjunction with such private funds as may be available to Willard.
In summary, it is my conclusion that EVPL does not have the discretionary authority
to alter the budget submitted; neither is it required to approve whatever budget is proposed by
Willard. It must, however, fix a tax levy rate thereby requiring Willard to conform its budget
to the funds available from tax and other sources. 8
The process of holding public hearings to permit taxpayer input with respect to the budget submitted by a
private donation library is not “pointless,” as suggested by the majority here, if EVPL “is not permitted to
make revisions” to the budget. Slip op. at 8. Such procedures offer an opportunity for all parties concerned
to become aware of the realities of tax-supported funding and to reach some accommodation for the final
result. Thus the process contemplated is not totally unlike the process used from 1983 to the time of passage
of the Private Donation Library Statute and as described by the majority. See slip op. at 9.
It could be argued that the ultimate result might be the practical equivalent of the Library Board’s revision
of the proposed budget. Nevertheless, the process suggested by this separate opinion avoids what I perceive
to be unwarranted legislation by this court.