Opinion
Nos. 36186 and 36192.
Filed July 1, 1966.
1. Taxation. In the absence of a specific statute the State Board of Equalization and Assessment is not required to notify taxpayers of a hearing to be held for the purpose of equalizing assessed valuations of property among counties. 2. Taxation: Appeal and Error. On review the question concerning the issues before the State Board of Equalization and Assessment is not the adequacy of the original notification but the fairness of the whole procedure. 3. Taxation. In the absence of statute the State Board of Equalization and Assessment may adopt any reasonable method of equalization, including use of reasonably reliable assessment-sales ratios.
Appeals from the State Board of Equalization and Assessment. Affirmed.
Paul L. Douglas, William D. Blue, Ronald D. Lahners, Floyd A. Sterns, Walter D. Weaver, and Janice L. Gradwohl, for appellant.
Clarence A. H. Meyer, Attorney General, and Homer G. Hamilton, for appellee.
Kennedy, Holland, DeLacy Svoboda, Ralph D. Nelson, Vincent D. Brown, and Arlyss E. Brown, amici curiae.
Heard before CARTER, SPENCER, BOSLAUGH, BROWER, SMITH, and McCOWN, JJ., and DITTRICK, District Judge.
The State Board of Equalization and Assessment ordered appellant Lancaster County and other counties to increase their assessed valuations of real estate for taxation in the year 1965. The lands in all counties having been classified rural or urban, adjustments of varying percents were ordered to be made horizontally in respect to one or both classes at the county level for the purpose of equalization among the counties. According to counsel for Lancaster County, the board ordered the increases without adequate notification of hearing and without referring to the evidence.
The county contends that failure of notification to taxpayers violated due process of law, although we read in appellant's brief that there are 80,000 parcels of real estate in Lancaster County alone. The board notified all counties as section 77-508, R.R.S. 1943, specifically called for, but the county argues that section 84-913, R. S. Supp., 1963, a counterpart of section 8 of the Model State Administrative Procedure Act of 1946, required notification to taxpayers.
The procedure in advance of hearing did not cut the ground from under the board. An explanation of the few precedents thought to lean in the other direction lies in the distinction, occasionally troublesome, between horizontal and vertical adjustments at the county level. See, County of Douglas v. State Board of Equalization Assessment, 158 Neb. 325, 63 N.W.2d 449; County of Howard v. State Board of Equalization Assessment, 158 Neb. 339, 63 N.W.2d 441. The hyperbole of every landowner participating in a statewide equalization hearing is instructive. "There must be a limit to individual argument in such matters if government is to go on." Bi-Metallic Inv. Co. v. State Board of Equalization of Colorado, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372. In the absence of a specific statute, notification to taxpayers is unnecessary.
The county argues that the board stated the issues so indefinitely that the order should be reversed. The board notified the county that the assessed valuations on rural and urban real estate were to be increased or decreased. The county at no time moved for a continuance or a specification of proposed adjustments. "* * * the question on review is not the adequacy of the original notice * * * but * * * the fairness of the whole procedure." 1 Davis, Administrative Law Treatise, 8.04, p. 525. We agree that in advance of hearing the board ought to have notified the affected counties of the proposed adjustments in percents, and our prior decisions to the contrary are disapproved. However, here the insufficiency of notice was nonprejudicial error in view of the absence of timely objection.
We turn to the contention that the board acted without referring to the evidence. After a hearing at which all 93 counties appeared and voluminous evidence was received, Lancaster County was ordered to increase its assessment of rural land 15 percent and of urban land 28 percent. Valuations of one or both classes were increased in 73 percent of the counties, the records showing aggregate assessments in counties which have appealed but not in other counties.
The board considered assessment-sales ratios in percents for each county. The mean and median of rural ratios were 24.73 and 23.91 respectively, and of urban ratios, 28.68 and 27.70 respectively. The board in effect increased the Lancaster rural ratio from 23.32 to 26.82 and its urban ratio from 23.03 to 29.48. The resultant mean and median of rural ratios are 28.07 and 27.36 respectively, and of urban ratios 28.83 and 28.36 respectively.
Attacks on the ratios for Lancaster County were indirect. The county assessor testified generally that he had not been given sufficient time to examine the supporting data, but no continuance was requested. The county offered no ratio of its own, although it adduced evidence to the effect that it was bearing a fair share of taxes. Its rural adjustment relates closely to the overall adjustment indicated by the means and medians, and we find no data suggesting that this comparison is unreasonable.
The urban adjustment for Lancaster County was not arbitrary. The relationship between its assessment-sales ratio and the mean and median is close enough, although deviates for other counties are unexplained. In a classification of urban ratios by population Lancaster County, which ranks second in population, is fairly close to the line. The ratio for Douglas County, which ranks first is 29.99. The mean and median of the first 10 ratios ranked by population are 29.39 and 29.16, respectively. Since Lancaster County seeks a decrease in its own adjusted valuations instead of increases elsewhere, on this record the deviates for other counties do not demonstrate arbitrary adjustment of Lancaster County valuations. "* * * substantial compliance with equality and uniformity is all that is required." County of Kimball v. State Board of Equalization Assessment, ante p. 482, 143 N.W.2d 893.
An argument is made that no ratio should have been considered, although the county failed to show defects prejudicial to it. Cases in which ratios were found unreliable because of biased data or the like are inapposite. In the absence of statute the board may adopt any reasonable method of equalizing. Fromkin v. State, 158 Neb. 377, 63 N.W.2d 332. We point out that the problem of determining the reasonableness or arbitrariness of the action is complicated by the absence from the record of computations made or used by the board. If the board had shown in the record all computations made or used in reaching its conclusions, the problems of this court would be simplified.
The final decision of the board ordering Lancaster County to increase its valuations is affirmed.
AFFIRMED.