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Nicholson v. Cooney6/30/1994
, 51 St.Rep. 579
Submitted on May 24, 1994.
This is an action to declare unconstitutional Referendum 112 and the suspension of 1993 Mont. Laws 634 prior to a referendum vote. The District Court for the First Judicial District, Lewis and Clark County, granted summary judgment in favor of defendants.
Plaintiffs appeal, and defendant Secretary of State Mike Cooney cross-appeals. We affirm.
The issues are:
1. Did the District Court err in concluding that Counts II and V of the amended complaint were not time-barred under ยง 3-5-302(6)(a), MCA?
2. Does the suspension of Chapter 634 pending a referendum vote deny equal protection of the law in violation of the Fourteenth Amendment to the United States Constitution and Article II, Section 4 of the Montana Constitution?
3. Does the suspension of Chapter 634, which placed the state's budget out of balance, violate Article VII, Section 9 of the Montana Constitution?
4. Does Chapter 634 constitute an appropriations measure on which a referendum vote is prohibited?
5. Does suspension of Chapter 634 constitute a surrender and suspension of the taxation power in violation of Article VIII, Section 2 of the Montana Constitution?
In 1993, the Montana legislature enacted a revision of state income tax and corporate tax laws. The measure, 1993 Mont. Laws 634 (Chapter 634), increases the income tax burden on some individual taxpayers while reducing it on others, increases minimum corporate taxes, and imposes graduated corporate tax rates. The purposes of the measure include raising revenues for the general operation of state government and balancing the state's budget.
Had Montana voters adopted a proposed four percent general sales tax at the June 1993 primary election, Chapter 634 would have been repealed beginning January 1, 1994, and the sales tax would have taken effect at that time. However, the voters rejected the sales tax. Therefore, under the scheme adopted by the legislature, Chapter 634 remained in effect.
During the summer of 1993, defendants Natelson and Montanans for Better Government circulated petitions in support of Referendum 112, in order to place Chapter 634 on the ballot in the November 1994 general election pursuant to Article III, Section 5 of the Montana Constitution. On September 3, 1993, defendant Secretary of State Mike Cooney certified to the Governor that he had received petitions containing sufficient signatures to place Chapter 634 on the ballot at the election. On September 28, 1993, defendant Cooney certified to the Governor that he had received petitions containing sufficient signatures to require suspension of Chapter 634 until the vote on Referendum 112, pursuant to subsection (2) of the Constitutional referendum power.
The Governor issued a proclamation calling the legislature into special session. Among other things, the proclamation stated that "the suspension of [Chapter 634] has made its provisions inoperative, thereby making it virtually impossible to balance the state's budget without legislative action."
Plaintiffs filed this action for declaratory judgment on October 18, 1993. While it was pending before the District Court, the special session of the legislature began. By the close of the special session in December 1993, the legislature had made substantial cuts in appropriations in order to balance the budget.
Plaintiffs amended complaint contains seven counts. Counts I through VI challenge the constitutionality of Referendum 112. Count VII alleges fraud on the part of defendants Natelson and Montanans for Better
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