Airlines Parking, Inc. v. Wayne County
| Decision Date | 16 July 1996 |
| Docket Number | No. 98890,No. 2,98890,2 |
| Citation | 550 N.W.2d 490,452 Mich. 527 |
| Parties | AIRLINES PARKING, INC., Plaintiff-Appellant, v. WAYNE COUNTY, a municipal corporation, The City of Romulus, a municipal corporation, and The State of Michigan, Defendants-Appellees. Calendar |
| Court | Michigan Supreme Court |
We granted leave in this case to determine whether the Airport Parking Tax Act, 1987 P.A. 248, M.C.L. § 207.371 et seq.; M.S.A. § 7.559(101) et seq., violates Const. 1963, art. 9, § 31. 1
Specifically, we must determine whether the airport parking tax levied on Airlines Parking is a "local tax" and therefore subject to the section of the Headlee Amendment that prohibits a local tax increase or the imposition of a new local tax without a majority vote of the qualified electors of a local governing unit. We conclude that the airport parking tax is not a local tax and, therefore, does not violate Const. 1963, art. 9, § 31. Thus, we affirm the decision of the Court of Appeals.
Plaintiff, Airlines Parking, Inc., owns and operates an airport parking facility in Romulus, which is in Wayne County. The facility is located within five miles of Detroit Metropolitan Airport (Metro). Plaintiff brought an original action in the Court of Appeals 2 pursuant to Const. 1963, art. 9, § 32 3 against defendants, the City of Romulus, the County of Wayne, and the State of Michigan, contending that the tax is a "local tax" subject to § 31 of the Headlee Amendment, and therefore subject to prior approval by a majority of local voters.
The Court of Appeals granted defendants' motion for summary disposition and initially granted plaintiff's motion for rehearing, but, after further review, rejected the motion. Plaintiff filed an application for leave to appeal with this Court. We retained jurisdiction and remanded the case to the Court of Appeals for an explanation of the reasons for denying the plaintiff's rehearing motion. 447 Mich. 985, 525 N.W.2d 452 (1994). In response, the Court of Appeals stated that plaintiff's claim was untimely and alternatively rejected its contention that the tax was a "local tax" under the current constitution. 4
When the case returned to this Court, we held it in abeyance pending a decision in Taxpayers Allied for Constitutional Taxation v. Wayne Co., 450 Mich. 119, 537 N.W.2d 596 (1995). After review, and in light of that case, we granted leave to appeal limited to the issue whether the airport tax was an unconstitutional tax under the Headlee Amendment, art. 9, § 31.
The Airport Parking Tax Act, M.C.L. § 207.371 et seq.; M.S.A. § 7.559(101) et seq., in pertinent part provides:
There is hereby levied upon and shall be collected from a person engaged in the business of providing an airport parking facility an excise tax at the rate of 30% of the amount of the charge for the transaction. [M.C.L. § 207.373; M.S.A. § 7.559(103) ].
The statute levies an excise tax on each parking transaction 5 at an airport parking facility 6 located within five miles of a regional airport facility, which is defined by the act as an airport that services four million or more annual "enplanements." 7 Metro is currently the only airport in the state that fits the definition of a regional airport facility. The tax is collected, distributed by the state, and appropriated by legislative act for Wayne County and Romulus, the county and city in which the airport is located.
The parties have not argued nor do we find ambiguity in the statute. Plaintiff does not contend that Const. 1963, art. 4, § 29 is relevant to his claim and has not argued or briefed this issue. 8 The only issue before us is whether the tax violates art. 9, § 31 of the Headlee Amendment.
The Headlee Amendment was "part of a nationwide 'taxpayers revolt'... to limit legislative expansion of requirements placed on local government, to put a freeze on what they perceived was excessive government spending, and to lower their taxes both at the local and the state level." Durant v. State Bd. of Ed., 424 Mich. 364, 378, 381 N.W.2d 662 (1985). For present purposes, we observe that Headlee establishes tax limitations on state and local governments and prohibits tax increases by both state and local governments without direct voter approval. Art. 9, § 25.
Plaintiff asserts that the tax was levied in violation of the prohibition of art. 9, § 31:
Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon.[ 9
Simply stated, a proposal by local government to levy a new tax or increase the rate of an extant tax beyond the limit imposed by law must be approved by a majority of the local voters.
In parallel fashion, Headlee controls the level of state taxation, limiting the total amount of taxes that may be imposed on state taxpayers in any fiscal year. This limit cannot "be changed without approval [of a] majority of qualified electors," and the Legislature is prohibited from imposing "taxes of any kind which, together with all other revenues of the state, federal aid excluded, exceed the revenue limit established in this section" of the amendment. Art. 9, § 26. 10 It is undisputed that, if the airport tax is a state tax, the limits of § 26 of the Headlee Amendment have not been exceeded.
The amendment is built on the previously existing system, and the temporal reference point of the requirements and limitations imposed on state government is fiscal year 1978-79. Art. 9, §§ 26 and 30. The temporal reference point for the limitation on local government here at issue is the date of ratification, November 7, 1978. In each instance, the language of the provisions is linked to the determination of which entity--the state or local government--imposes or levies the tax in question. 11 However, because it is at least theoretically possible that the state could levy a tax that was local in character, the entity imposing the tax in question may not conclusively resolve the Headlee question.
We find no reason in this case to conclude that the tax is a local tax. It is an excise tax, "a tax imposed upon ... the engaging in an occupation." Dooley v. Detroit, 370 Mich. 194, 206, 121 N.W.2d 724 (1963), which the constitution authorizes the Legislature to enact. 12 It is styled as a state tax, has the structural attributes of a state tax, and serves a state purpose. It was enacted by the Legislature and is administered by the state. It is collected by the state treasury and accounted for in the state budget. The funds are deposited in the state treasury to the credit of the airport parking fund 13 and distribution is directed to each qualified county 14 and city according to a statutory formula. 15 The state retains all interest and penalties from delinquent taxes. The statute requires a continuing appropriation 16 from year to year, and revenues are therefore subject to redirection by the Legislature. Michigan Ass'n of Cos. v. Dep't of Management & Budget, 418 Mich. 667, 345 N.W.2d 584 (1984). 17
By contrast, local taxes are collected by local government, administered directly by that local entity, and spent by the local government according to local fiscal policy. 18 Obviously, local taxes, levied by local governments, would not be subject to state appropriations or to legislative discretion in terms of revenue distribution.
Additionally, the act has a provision allowing assignment of payments from the revenues generated to locally incurred debt obligations of the county. The statute specifically provides that the act shall not be construed to "[r]equire the state to continue to impose and collect taxes imposed by this act [or] [l]imit or prohibit the state from repealing or amending this act." M.C.L. § 207.378(3)(a), (b); M.S.A. § 7.559(108)(3)(a), (b). In short, all indicia of the tax indicate prevailing state control.
Finally, while plaintiff contends that the tax is local because it benefits only local end users, we conclude that the tax clearly serves a state purpose. 19 The language of the act is not exclusive, and its application is not limited to any one location. The act applies to parking facilities in any qualified county providing public services to a regional airport facility. Although Wayne County at present is the only county in Michigan that has an airport meeting the statutory definition, the statutory language does not restrict application of this tax to one locale as would the language of a local tax act.
To the extent that plaintiff suggests that the Legislature is allowed to impose taxes only for the purposes of state government, and not for purposes of local government, and that only a constitutional provision would allow for a diversion of a state tax dollars to local governments, plaintiff is clearly incorrect. Excise taxes and other state taxes are distributed to local governments for local purposes under the Revenue Sharing Act, M.C.L. § 141.901; M.S.A. § 5.3194(401), as are state tax dollars under the gasoline tax act and other state taxes. 20
Plaintiff's functional end-user argument ignores the fact that matters of local concern may also be matters of state concern. The determination of public purpose is preeminently a legislative...
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