Opinion
No. 38536
Decided November 25, 1964.
Taxation — Exemptions — Public property used exclusively for public purpose — Real property improved with office building — Owned and used by State Teachers Retirement Board — In management of State Teachers Retirement System.
APPEAL from the Court of Appeals for Franklin County.
This proceeding was begun by an application for exemption from taxation of certain real property improved by an office building and owned and used exclusively by the State Teachers Retirement Board in the performance of its duties in managing the State Teachers Retirement System.
The State Teachers Retirement System was created by the General Assembly (Chapter 3307, Revised Code) and is managed by the State Teachers Retirement Board (Section 3307.03, Revised Code). The board, as required by statute, holds title to the subject property which is dedicated and used exclusively for the functions of the State Teachers Retirement System. No portion of it is rented to or used by any private individual or other organization.
The board is composed of five members, three of whom are public officials (Superintendent of Public Instruction, Auditor of State and Attorney General), and two of whom are teacher-members elected by the members of the system (Section 3307.05, Revised Code). The Attorney General is also legal advisor for the board. The Treasurer of State is custodian of all the funds and securities of the system, and the Auditor of State audits the financial transactions of the system.
Membership of the system is composed of all the public schoolteachers of the state, the faculties of the six state colleges and universities and the municipal universities of Toledo and Akron and the educational employees of the Department of Education. The employees of the system are members of the Public Employees Retirement System.
The income of the system is from the members who contribute seven per cent of their gross earnings, from the employers who contribute at a current rate of ten and a fraction per cent of the teachers' compensation, and from investments.
The County Auditor of Franklin County recommended that the exemption be granted.
The Board of Tax Appeals found that the ownership and use of the property do not qualify the same for exemption from taxation and denied the application.
The Court of Appeals, on appeal from the decision of the Board of Tax Appeals, affirmed the decision.
An allowance of a motion to certify the record brings the cause to this court for review.
Messrs. George, Greek, King McMahon, Mr. David A. Johnston, Jr., and Mr. Kiehner Johnson, for appellant.
Mr. William B. Saxbe, attorney general, and Mr. Daronne R. Tate, for appellee Board of Tax Appeals.
Mr. Earl W. Allison, prosecuting attorney, for appellee County Auditor.
Article VI of the Ohio Constitution confers upon the General Assembly power to provide for the organization, administration and control of a public school system ( State, ex rel. Core, v. Green et al., Bd. of Elections of Cuyahoga County, 160 Ohio St. 175) . In the exercise of this power, the General Assembly has created the State Teachers Retirement System (Chapter 3307, Revised Code), to be regulated by a State Teachers Retirement Board, which is a substantial and integral factor in securing and retaining qualified teachers, thus improving the quality of instruction in the public school system.
The subject property, used solely by the board in the management of the retirement system, is "public property used exclusively for a public purpose" and "exempt from taxation" within the meaning of Section 5709.08, Revised Code. See State, ex rel. Williams, v. Glander, Tax Commr., 148 Ohio St. 188.
The judgment of the Court of Appeals is reversed.
Judgment reversed.
TAFT, C.J., MATTHIAS, O'NEILL, GRIFFITH and GIBSON, JJ., concur.
ZIMMERMAN and HERBERT, JJ., dissent.