This Article is inspired by the political insight of Tammany Hall and by the State of Indiana and its complicit judiciary. Let me begin with Tammany Hall, the political “machine” which long reigned over New York City by means of organization, patronage, and graft. In 1905 George Washington Plunkitt (a/k/a Plunkitt of Tammany Hall) was in his early 60’s upon the publication of a book of his quotations compiled by William L. Riordon. The “rostrum” for “very plain talks on very practical politics” was the bootblack stand¹ at the New York County Courthouse. As the unofficial sage/philosopher of Tammany Hall, Plunkitt famously distinguished between “honest graft” and “dishonest graft” while embracing the former and denouncing the latter.
Being a devout practitioner of patronage, Plunkitt railed at legal impediments to its exercise. Here is his quotable pronouncement:
“I know that the civil service humbug is stuck into the constitution², too, but as Tim Campbell³ said: ‘What’s the constitution among friends?’” (emphasis added)
I was reminded of this quotation several weeks ago upon reading the splintered decision (54 pages with three Justices writing) of the Indiana Supreme Court (a/k/a SCOTSI) in Horner v. Curry. Terry Curry happens to be the Marion County Prosecutor. Jeana Horner and her fellow plaintiffs below were simple taxpayers.
The constitution in question is the constitution of the State of Indiana which, in relevant part, includes Article 8 with respect to (free) public education and to financing the cost of it. Here from Article 8 Sec. 2 is a partial description of funding sources:
“The fund to be derived from the sale of County Seminaries, and the moneys and property heretofore held for such Seminaries; from the fines assessed for breaches of penal laws of the State; and from all forfeitures which may accrue; . . .” (emphasis added)
There follows in Article 8 a description of the “Common School fund” as an endowment from which income, but not principal, is expended for the support of common schools:
“Section 3. The principal of the Common School fund shall remain a perpetual fund, which may be increased, but shall never be diminished; and the income thereof shall be inviolably appropriated to the support of Common Schools, and to no other purpose whatsoever.”
We know from Sec. 2 that fines from criminal cases along with “all forfeitures which may accrue” belong to the Common School fund. We know from Sec. 3 that the educational mission of the Common School fund is financed solely by income while the fund principal may be increased but never diminished. The problem here amid the lofty goal and clear expression of Article 8 is that the General Assembly can’t be trusted with the Common School fund. Too much money. Too little integrity.
The General Assembly found a way to rob the Common School fund before the money arrived. While Indiana’s civil forfeiture law at IC 34-24-1-4(d) directs that the proceeds from seized property be paid to the state treasurer for deposit in the Common School fund, other statutory provisions allow for the deduction from such proceeds of supposed “law enforcement costs.”
Jeana Horner and her fellow citizen/ taxpayer plaintiffs filed their declaratory judgment suit to “redress Marion County’s profit-driven forfeiture program” and to “vindicate the public rights secured by Article 8.” The reimbursement provision in force in 2016 (when suit was filed) required a court determination of case-specific “law enforcement costs” prior to any deduction from proceeds of a civil forfeiture. Then in 2018 the General Assembly amended the law at IC 34-24-1-4(d)(3) to reduce the Common School fund’s share of a civil forfeiture to a mere 10%. The other 90% is consigned to the feeding frenzy of prosecutors (including patronage-selected special counsel), police departments, and the State. The request of the taxpayers to amend their complaint to include a challenge to the 2018 legislation was overruled by the trial court which then entered summary judgment against the plaintiffs.
The appeal bypassed the Court of Appeals by way of Appellate Rule 56(A) as a matter of “great public importance.” A foundational issue on appeal was whether the taxpayers had standing to enforce Article 8 or, phrased differently, whether there was a “private right” to enforce Article 8. After too many pages of labored analysis about taxpayer standing and the related (or unrelated) public standing, four Justices held in favor of the standing of taxpayers to sue. Justice Slaughter wrote separately to concur in the result (adverse to the taxpayers) while explaining his principled (but patrician) view that taxpayers lacked standing to sue to enforce Article 8 and to protect the Common School fund from the insouciance of the General Assembly and the greed of local government. Having taken this position, Justice Slaughter deferred any vote on the remaining issues.
The next issue for the four Justices still participating was whether Article 8 applies to modern civil forfeitures. The four (Justices Massa, Goff, David, and Chief Justice Rush) were unanimous in holding that the Article 8 indeed applies to modern civil forfeitures, leaving the final, decisive issue of whether the title 34 offset/reimbursement legislation is (or was) constitutional.
The four Justices reaching the issue split 3/1 (C.J. Rush in the minority) in favor of the constitutionality of legislation allowing local government to convert money otherwise destined to the Common School fund. The theory of the majority of Three seems to rest on the observation that Article 8 provision for forfeiture accrual to the Common School fund is not “self-acting” but rather dependent upon legislation. Since the General Assembly governs forfeitures (through legislation) it may (per the majority) determine without restraint how and when a civil forfeiture accrues to the Common School fund. Though the holding of constitutionality seems to lack mention of the 2018 legislation allowing a 90% confiscation of forfeiture proceeds, the rationale would clearly uphold that newer version of bad law.
Horner is a disappointing end-of-term SCOTSI ruling. If there is any clear lesson from the case it is that the SCOTSI may be too deferential to the General Assembly when that latter body offends a clear mandate of the Indiana Constitution. By contrast, the SCOTSI Opinion (earlier this year) in City of Hammond v. Herman & Kittle Properties, Inc., 119 N.E.3d 70 (Ind. 2019) was a commendable defense of the Indiana Constitution’s limitation of “special” legislation.
Addendum: It seems that former State Treasurers have presided over the conversion of Common School fund principal. According to the Treasurer’s annual reports available online, the Common School fund “average daily balance” for (fiscal) 2004 exceeded $185,000,000 before decreasing to less than $27,000,000 in 2009. Given the constitutional requirement that the Common School fund be invested (by the General Assembly) in a “safe and profitable manner,” it is most unlikely that the principal reductions resulted from failed investments. All Hoosiers who write a check for property taxes to support local schools have a right to inquire as to who has been robbing the Common School fund.
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¹ Followers of Uncle Ned may see a parallel to Ned’s stories and conversations from the infamous liars’ bench next to Johnson’s Hardware.
² Though amended several times, the Constitution of the State of New York currently provides at Article 5 Sec. 6 that civil service hiring and promotion be merit-based with (whenever practical) exams.
³ Tim Campbell was a Democratic member of Congress who (by legend) asked President Grover Cleveland about the status of a passed bill. Cleveland announced his intent to veto due to a constitutional defect. Campbell’s response was: “What’s the Constitution among friends?”
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