County Road Ass'n of Michigan v. Governor

• Citation: 705 N.W.2d 680,474 Mich. 11
• Decision Date: 08 November 2005
• Docket Number: Docket No. 125665.
• Parties: COUNTY ROAD ASSOCIATION OF MICHIGAN and Chippewa County Road Commission, Plaintiffs-Appellees and Michigan Public Transit Association, Ann Arbor Transportation Authority, Capital Area Transportation Authority, and Suburban Mobility Authority for Regional Transportation, Intervening Plaintiffs-Appellants, v. GOVERNOR of Michigan, Director of the Department of Transportation, Department of Transportation, Director of the Department of Management and Budget, Department of Management and Budget, State Budget Director, State Treasurer, Department of Treasury, Secretary of State, and State of Michigan, Defendants-Appellees.
• Court: Michigan Supreme Court

Page 680

705 N.W.2d 680

474 Mich. 11

COUNTY ROAD ASSOCIATION OF MICHIGAN and Chippewa County Road Commission, Plaintiffs-Appellees and Michigan Public Transit Association, Ann Arbor Transportation Authority, Capital Area Transportation Authority, and Suburban Mobility Authority for Regional Transportation, Intervening Plaintiffs-Appellants, v. GOVERNOR of Michigan, Director of the Department of Transportation, Department of Transportation, Director of the Department of Management and Budget, Department of Management and Budget, State Budget Director, State Treasurer, Department of Treasury, Secretary of State, and State of Michigan, Defendants-Appellees.

Docket No. 125665.

Supreme Court of Michigan.

November 8, 2005.

Fraser Trebilcock Davis & Dunlap, P.C. (by Michael C. Levine and Ryan K. Kauffman), Lansing, MI, for the plaintiffs.

Honigman Miller Schwartz and Cohn, L.L.P. (by John D. Pirich and Angela M. Brown), Lansing, MI, for the intervening plaintiffs.

Michael A. Cox, Attorney General, Thomas L. Casey, Solicitor General, and Patrick F. Isom, Assistant Attorney General, Lansing, MI, for the defendants.

Loomis, Ewert, Parsley, Davis & Gotting, P.C. (by David M. Lick, Jeffrey W. Bracken, and Ronald W. Bloomberg), Lansing, MI, for Michigan Infrastructure and Transportation Association, Inc., amicus curiae.

Plunkett & Cooney, P.C. (by Mary Massaron Ross and Christine D. Oldani), Detroit, MI, for Michigan Municipal League, amicus curiae.

OPINION

PER CURIAM.

This case involves the authority of the Governor, exercised in Executive Order No. 2001-9, to reduce the Legislature's allocation of general sales taxes to the Comprehensive Transportation Fund (CTF) by $12,750,000 for the fiscal year ending September 30, 2002, and to transfer those revenues to the state's general fund. Appellants claim that the general sales tax revenues allocated to the CTF are "constitutionally dedicated" funds within the meaning of Const. 1963, art. 9, § 9, and therefore immune to the Governor's power to balance the budget, Const. 1963, art. 5, § 20.

The Court of Appeals concluded that art. 9, § 9, which it found to be ambiguous, does not dedicate any portion of the general sales tax revenues for comprehensive transportation purposes. 260 Mich. App. 299, 677 N.W.2d 340 (2004). We agree with the Court of Appeals that the revenues at issue are not constitutionally dedicated and that the Governor had the authority to reduce the Legislature's allocation of general sales tax revenues to the CTF in EO 2001-9. We disagree, however, that art. 9, § 9 is ambiguous. In affirming the Court of Appeals, we rely on the plain meaning of the constitutional provision.

I. Facts and Procedural History

To alleviate a budget shortfall for the fiscal year ending September 30, 2002, the Governor implemented EO 2001-9. The order transferred $12,750,000 in general sales tax revenues from the CTF to the general fund.

Plaintiffs sought and obtained a preliminary injunction from the Ingham Circuit Court to enjoin the transfer. Plaintiffs maintained that the general sales tax revenues allocated to the CTF were "constitutionally dedicated" within the meaning of Const. 1963, art. 9, § 9 and immune to the Governor's power to reduce the expenditure and balance the budget under Const. 1963, art. 5, § 20.

In a published decision, the Court of Appeals reversed. 260 Mich.App. 299, 677 N.W.2d 340 (2004). The Court of Appeals found the language of the constitutional provision ambiguous, and examined the historical development of art. 9, § 9 in determining whether the allocation to the CTF was "constitutionally dedicated." We granted oral argument on the application. 471 Mich. 887, 687 N.W.2d 294 (2004).

II. Standard of Review

Constitutional issues are reviewed de novo. Wayne Co. v. Hathcock, 471 Mich. 445, 455, 684 N.W.2d 765 (2004).

Our first inquiry, when interpreting constitutional provisions, "is to determine the text's original meaning to the ratifiers, the people, at the time of ratification." Id. at 468, 684 N.W.2d 765. This is accomplished by "applying each term's plain meaning at the time of ratification." Id. at 468-469, 684 N.W.2d 765. See also Silver Creek Drain Dist. v. Extrusions Div., Inc., 468 Mich. 367, 375, 663 N.W.2d 436 (2003).

III. Analysis

The Governor's authority to reduce state expenditures is found in art. 5, § 20, which states:

No appropriation shall be a mandate to spend. The governor, with the approval of the appropriating committees of the house and senate, shall reduce expenditures authorized by appropriations whenever it appears that actual revenues for a fiscal period will fall below the revenue estimates on which appropriations for that period were based. Reductions in expenditures shall be made in accordance with procedures prescribed by law. The governor may not reduce expenditures of the legislative and judicial branches or from funds constitutionally dedicated for specific purposes. [Emphasis added.]

The disputed issue in this case is whether the general sales tax revenues that the Legislature allocated to the CTF are "constitutionally dedicated for specific purposes," and therefore immune from the Governor's authority to reduce expenditures. The answer to this question is found in art. 9, § 9, which states, in relevant part:

All specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and to propel aircraft and on registered motor vehicles and aircraft shall, after the payment of necessary collection expenses, be used exclusively for transportation purposes as set forth in this section.

* * *

Amount used for transportation purposes. The balance, if any, of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles, after the payment of necessary collection expenses; . . . and not more than 25 percent of the general sales taxes, imposed directly or indirectly on fuel sold to propel motor vehicles upon highways, on the sale of motor vehicles, and on the sale of the parts and accessories of motor vehicles . . . shall be used exclusively for the transportation purposes of comprehensive transportation purposes as defined by law. [Emphasis added.][¹]

While construing the wording of art. 9, § 9 might require effort, the provision's meaning is clear. The provision limits the amount of general sales taxes that the Legislature can allocate to comprehensive transportation to "not more than 25 percent of the general sales taxes. . . ." In doing so, it places a ceiling on the amount of general sales tax revenues that can be used "exclusively for . . . comprehensive transportation purposes . . .," but does not dedicate any specific amount of general sales taxes to be used for comprehensive transportation purposes. The only conclusion that can be drawn from art. 9, § 9 is that the general sales tax revenues described in that provision are not constitutionally dedicated funds.

When construing art. 9, § 9, the Court of Appeals mistakenly found that the constitutional provision was subject to alternative interpretations, and then unnecessarily considered its history and purpose and the circumstances under which it was written and later amended. See 260 Mich.App at 307-311, 677 N.W.2d 340. As described above, the Court should have looked no further than the plain language of art. 9, § 9 to determine that the general sales tax revenues allocated by the Legislature to the CTF were not constitutionally dedicated funds. Our obligation is to give the words of our Constitution a reasonable interpretation consistent with the plain meaning understood by the ratifiers. Hathcock, 471 Mich. at 468-469, 684 N.W.2d 765. Text that may require reasonable effort to parse is not for that reason ambiguous.

IV

In sum, we conclude that art. 9, § 9 is unambiguous, and we agree with the Court of Appeals that, with respect to the reduction of the general sales tax revenues allocated to the CTF by EO 2001-9, the executive order was a lawful exercise of the Governor's constitutional authority under art. 5, § 20.

We therefore affirm the Court of Appeals resolution of this issue in favor of the defendants. In all other respects, leave to appeal is denied because we are not persuaded that the remaining questions should be reviewed by this Court. This case is remanded to the trial court for entry of a judgment in favor of defendants on the merits.

CLIFFORD W. TAYLOR, MAURA D. CORRIGAN, ROBERT P. YOUNG, JR., and STEPHEN J. MARKMAN, JJ., concur.

MICHAEL F. CAVANAGH, J.

I concur in the result only.

WEAVER, J. (concurring).

I concur in the result of the opinion per curiam because I agree that the revenues at issue are not constitutionally dedicated and that the Governor had the authority to reduce the Legislature's allocation of general sales tax revenues to the Comprehensive Transportation Fund. As noted by the majority opinion, Const. 1963, art. 9, § 9 places a ceiling on the amount of general sales tax revenues that can be used for comprehensive transportation...