A partial victory for local governments and taxpayers

August 9, 2019

Dan Dysinger, Grant Twp Supervisor

I’ve written repeatedly scolding the Lansing Government of criminal abuse against Local Governments regarding “unfunded mandates”. Back in the fall of 2016 a group of Local Government leaders and legal experts began a lawsuit against the State of Michigan. Taxpayers for Michigan Constitutional Government (TMCG), Steve Duchane, Randall Blum and Sara Kandel v State of Michigan. The suit was for violations of Article 9 section 25 through 32, more commonly known as the Headlee amendments of the Michigan Constitution. Grant Township paid $1,500 and joined the group in 2016, an inexpensive legal fee considering what legal costs are. Remember the definition of an “unfunded mandate”; a shift of costs from the State to Local Units of Government. In Michigan that practice is illegal, voters made it that way.

On July 30 the Michigan Court of Appeals rendered its decision on three of the four original actions. Count one and two were ruled in favor of the State, not unanimously. These sections of the lawsuit dealt with defining Charter Schools and Public School Academies as Local Governments thus qualifying them for school aid similar to a Local School District. Also alleging the State has underfunded its revenue sharing obligations under Section 30 requirements. While the Court of Appeals rejected the TMCG arguments, I believe these rulings will be appealed due to more recent decisions by the Michigan Supreme Court and other considerations. Count three was dismissed under stipulation due to time constraints in gathering further data in December of 2017. It dealt with local funds to maintain truck line routes.

Here was the win, on Count 4 the Court of Appeals unanimously ruled in favor of TMCG with regards to the unfunded mandate by the State of Michigan against Local Governments. I’ll try to summarize here what this all means; it seems daunting to wade through the arguments. First let me quote the exact language from Michigan Constitution Article 9 Section 29:
“The State is hereby prohibited from reducing the State financed proportion of the necessary costs of any existing activity or service required of units of Local Government by State law. A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the legislature or any State Agency of units of Local Government, unless a State appropriation is made and disbursed to pay the unit of Local Government for any necessary increased costs.”

The Court further states; the first sentence of Section 29 is “aimed at existing services or activities already required of local government”, the sentence “prohibits reduction of the state proportion of necessary costs with respect to the continuation of state mandated activities or services”. The Headlee Amendment “requires the State to pay the increased necessary costs in full when it mandates new activities or mandates activities at an increased level.” The Courts finding referenced notes from the drafters of the Headlee Amendment, this also includes Section 30; the primary purpose of this section was to prevent a shift in tax burden, either directly or indirectly from the State to Local responsibility.

The summary of Section 29 and Section 30 together in the Court documents reference a double duty effect on Local Governments; to choose between cutting local services or raising taxes, making up for the funds lost to pay necessary costs of new mandates. These shifts in burden is precisely why Local Governments should all be paying attention and support the effort by TMCG, it affects all Local Units of Government, Counties, Cities, Villages, Townships and Schools.

Let’s also keep in perspective this battle is not over, the State may appeal the Count 4 decision, and TMCG may appeal Count 1 and 2. On the States end the Attorney General has the purse strings of State coffers to pay its costs, ie; seemingly unlimited resources. TMCG relies on individuals and Local Governments for support, a more limited financial level. To get this far it’s taken 3 years, an appeal will add more time and expense.

This is a victory for Taxpayers, it requires Legislators and rule makers to understand how revised or new laws and rulemaking will affect local taxpayers. Hopefully, Lansing will end its practice of violating a law passed by voters on November 7, 1978, over 40 years ago.

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