Knights v. Jackson

Background

A Massachusetts taxpayer sued to stop the State Treasurer from paying cities and towns money from the State’s income-tax receipts to reimburse them for specified increases in school teachers’, supervisors’, and superintendents’ salaries. The State had collected and distributed taxes centrally, including taxes on interest, dividends, and income over $2,000 from professions and business. One 1919 law also raised the tax rate by one percent for 1918 and 1919. The taxpayer asked a court, by a mandamus action (a lawsuit asking a public official to be stopped from acting), to block the reimbursements as an unconstitutional special charge.

Reasoning

The Court took up whether using general income-tax proceeds to fund those reimbursements turned the tax into an unlawful special tax that would take property without due process. It accepted the state high court’s findings that the income tax was general and its proceeds became part of the Commonwealth’s general funds. The Court explained that those general funds could lawfully be spent for education and that the 1919 reimbursement law did not create a special appropriation or deny due process. The Court also rejected the argument that a separate temporary one-percent tax increase was improperly tied to the reimbursement.

Real world impact

The decision lets Massachusetts proceed with reimbursing municipalities from general income-tax revenues to cover the specified school salary increases. Cities, towns, and school employees may receive those payments without treating the tax as a special unconstitutional burden. The state’s approach to funding these education costs is therefore upheld.