
    State Aid to School Districts
    April 3, 1936.
   Margiotti, Attorney General,

We have your request to be advised concerning the effect of the decision of the Supreme Court of Pennsylvania in Kelley et al. v. Kalodner et al., 320 Pa. 180, declaring the Individual Net Income Tax Act of July 12, 1935, P. L. 970, unconstitutional, upon the Act of July 12, 1935, P. L. 993, and the Appropriation Act of July 12, 1935, no. 29-A. These acts are companion acts to the Individual Net Income Tax Act. The joint purpose of the three acts was to raise and appropriate revenues for the relief of the various school districts of the Commonwealth with the result that a lowering of local levies upon real estate for school purposes would be effected.

When the bill, which later became the Individual Net Income Tax Act, was originally introduced into the legislature it not only imposed a graduated income tax but also appropriated the proceeds thereof and distributed them to the various school districts. In its original form the bill required no companion measures to accomplish in full its intended purpose of relieving real estate from a part of the burden imposed upon it for school purposes. The bill, however, was amended in the Senate to eliminate the appropriation and distribution features, leaving only that portion of the bill which imposed the tax. This necessitated the enactment of the two companion acts above mentioned.

The Individual Net Income Tax Act, as amended in, and finally passed by, the Senate, made no appropriation but directed that the proceeds of the tax be paid into the school fund and be definitely earmarked “only for the payment of any appropriations made at any time by the General Assembly to the Department of Public Instruction for payment to school districts for salaries of members of the teaching and supervisory staffs of elementary schools and junior high schools, in accordance with the provisions of law”: section 701.

The Act of July 12, 1935, P. L. 993, likewise made no appropriation but amended the School Code of May 18, 1911, P. L. 309, as amended, by requiring the Commonwealth to pay a total of $100 per month on account of the salaries of elementary and junior high school teachers and supervisors. In the absence of an enactment making an appropriation of money to carry out the purpose of this act, it would obviously be a nullity.

The third companion act, namely, Appropriation Act 29-A of 1935, made an appropriation in the sum of $25,000,000 for the biennium to the Department of Public Instruction for the purpose of reimbursing school districts with regard to the “salaries of members of the teaching and supervisory staffs of elementary schools and junior high schools, in accordance with the provisions of law”. Although this act did not specify the fund out of which the appropriation was to be made, its language was identical with that language of the Individual Net ■ Income Tax Act designating how the tax under that act was to be devoted.

We have no hesitancy in advising you that the appropriation act, when considered in connection with the tax act, indicates an unmistakable legislative intent to make the appropriation out of the school fund into which the proceeds of the tax act were payable. Since the Supreme Court has declared the tax act to be unconstitutional no proceeds thereof will accrue to the school fund and, therefore, there will be no funds available for the payment of the appropriation contained in the appropriation act. Since the appropriation fails, the provisions of the Act of July 12, 1935, P. L. 993, amending the School Code, cannot be carried out for lack of available funds andj as stated above, it becomes a nullity. The operation of this latter act required the appropriation and since the appropriation was dependent upon the collection of funds under the tax act, the failure of the tax act to provide such funds, by reason of its unconstitutionality, results in the failure of the entire set-up.

We are, accordingly, of the opinion and, therefore, advise you that the decision of the Supreme Court, declaring the Individual Net Income Tax Act unconstitutional, renders inoperative the Appropriation Act of July 12, 1935, no. 29-A, and also the amendment of July 12, 1935, P. L. 993, to the School Code.

From Frederic Ray, Harrisburg.  