Judicial Attorneys Ass'n v. State
| Decision Date | 20 July 1999 |
| Docket Number | Docket No. 111785,Docket No. 111786,Docket No. Calendar,Docket No. 9,Docket No. 5. |
| Citation | 597 N.W.2d 113,460 Mich. 590 |
| Parties | JUDICIAL ATTORNEYS ASSOCIATION, Plaintiff-Appellees, and Government Administrators Association, Plaintiffs-Appellees, and Cross-Appellants, v. STATE of Michigan, Governor, Attorney General, Defendants-Appellants, and County of Wayne and Wayne County Board of Commissioners, Defendants and Cross Plaintiffs. Mayor of the City of Detroit, and the City of Detroit, Plaintiffs-Appellants, v. State of Michigan, and the Michigan Department of Management and Budget, Defendants-Appellees. |
| Court | Michigan Supreme Court |
City of Detroit Law Department (by Phyllis A. James, Corporation Counsel, Joanne D. Stafford, Chief Assistant Corporation Counsel, and Dennis A. Mazurek, Supervising Assistant Corporation Counsel), Detroit; Dickinson, Wright, P.L.L.C. (by Peter H. Ellsworth, Joseph C. Marshall, III, and Jeffery V. Stuckey), Lansing, for the plaintiffs-appellants City of Detroit.
Jennifer M. Granholm, Attorney General, Thomas L. Casey, Solicitor General, and Deborah Anne Devine and Matthew H. Rick, Assistant Attorneys General, Lansing, for defendants-appellees state of Michigan.
Edward Ewell, J., Wayne County Corporation Counsel, Detroit; Fink Zausmer, P.C. (by David H. Fink, Gary K. August, Ruben Acosta, and Amy M. Sitner), Farmington Hills, for defendants/cross-plaintiffs/appellants, Wayne County and Wayne County Board of Commissioners.
In these appeals, the city of Detroit and Wayne County challenge certain provisions of 1996 P.A. 374, a court reorganization act, on the basis that they violate Const.1963, art. 9, § 29 (the Headlee Amendment). We conclude that Act 374 neither imposes new activities nor increases the level of activities on local units. Further, because in 1978 and under Act 374, the state's only contribution to the activity at issue relates to the payment of judicial salaries, these matters are not subject to an analysis to determine whether Act 374 decreases the state's proportionate share of the necessary costs of the activities it requires of these two local units. We accordingly affirm in part and vacate in part the Court of Appeals opinion.
According to its title, Act 374 is designed to revise the organization and jurisdiction of the courts. It is an effort to reorganize the state trial courts and to provide a uniform funding mechanism. For purposes of these appeals, relevant features of Act 374 are that it abolishes Detroit Recorder's Court and merges it with the Third Circuit Court and that it makes the funding units' responsibilities for the funding of the Third Circuit and the 36th District Court consistent with the responsibilities of funding units of all other circuits and districts. Sections 9931, 8271, and 591. Specifically, Act 374 requires Detroit to fund 36th District Court and Wayne County to fund the newly reconstituted Third Circuit Court. Detroit and Wayne County contend that Act 374's imposition of these responsibilities violates the Headlee Amendment because it places funding obligations on them that they were not previously required to shoulder. In both cases, the trial court held that Act 374 violated the Headlee Amendment. The cases were consolidated on appeal and the Court of Appeals reversed, concluding that Act 374 did not violate the Headlee Amendment. 228 Mich.App. 386, 579 N.W.2d 378 (1998). We granted leave to consider whether Act 374 violates the Headlee Amendment.1 457 Mich. 884, 586 N.W.2d 925 (1998).
The relevant Headlee provision, Const.1963, art. 9, § 29, states:
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 provision of this section shall not apply to costs incurred pursuant to Article VI, Section 18.
Drawing from this Court's previous decisions, the Court of Appeals aptly articulated the parameters of § 29 at 396-398, 579 N.W.2d 378:
The first sentence of this provision prohibits reduction of the state proportion of necessary costs with respect to the continuation of state-mandated activities or services. The second sentence requires the state to fund any additional necessary costs of newly mandated activities or services and increases in the level of such activities or services from the 1978 base year. This language does not guarantee that local units' spending levels will not increase from the 1978 level. Rather, the Headlee Amendment only guarantees that the state will not reduce its proportion of the necessary costs of existing activities or services, and that the state will pay entirely for necessary costs when it mandates new activities or services or to the extent the state increases the level of an existing activity or service. Increased levels of local spending attributable to other causes, e.g., inflation or the greater utilization of a program by the public, are not addressed by this provision of the Headlee Amendment. The Michigan Supreme Court has interpreted § 29 to "`reflect an effort on the part of the voters to forestall any attempt by the Legislature to shift [fiscal] responsibilities to the local government....'" Schmidt v. Dep't of Ed., 441 Mich. 236, 250, 490 N.W.2d 584 (1992), quoting Durant v. State Bd. of Ed., 424 Mich. 364, 379, 381 N.W.2d 662 (1985). The two sentences of § 29 "must be read together `[b]ecause they were aimed at alleviation of two possible manifestations of the same voter concern....'" Schmidt, supra at 251 , quoting Durant, supra at 379 . To make the necessary comparison between state aid provided during the Headlee Amendment base year (1978) and a later year at issue, the Schmidt Court considered, at length, three possible formulations: the formulation, the "local-to-local" formulation, and the formulation. It ultimately adopted the formulation. This method involves comparing "the ratio of total state aid for a required activity to total necessary costs for the required activity in the base year... with the ratio of state aid to an individual local unit of government for the activity to the necessary costs of that unit for the activity in the year of challenged funding." Schmidt, supra at 249 . Under this formulation, "[t]he state is obligated to afford each unit providing the activity or service the same proportion of funding that the state provided on a statewide basis in the year that the Headlee Amendment was ratified." Id. at 250 ; see also Durant v. Michigan, 456 Mich. 175, 187, 566 N.W.2d 272 (1997).
In Schmidt, supra at 252, 490 N.W.2d 584, this Court discussed the voters' intent in ratifying the Headlee Amendment:
The state-to-local formulation satisfies the voters' intent in enacting the Headlee Amendment. When the voters ratified the Headlee Amendment, they sought to ensure that when the state mandates a program, funds are provided to the local government to pay for that program. The state-to-local method of calculating the state's obligation achieves the voters' desire to secure a minimum level of funding for the local government unit for mandatory programs and to link the mandating of programs with the necessity for taxing to pay for those programs. This approach also creates the appropriate balance between the state's desire for discretion in allocating funds and the desire of the local units of government for minimum funding. The state-to-local ratio provides a uniform allocation of resources for mandatory programs. The state is free to supplement that minimum funding on the basis of its perception of need, but the local government is guaranteed its proportionate share.
After reiterating these principles, the Court of Appeals proceeded to make a Headlee Amendment analysis of Act 374. The Court of Appeals concluded that "trial court operations" was the relevant activity or service under § 29. 228 Mich.App. at 401-402, 579 N.W.2d 378. It found that Act 374 requires counties to fund the operation of the circuit courts, district units to fund the operation of district courts, and the state to fully fund circuit and district court judicial salaries. Id. at 402-403, 579 N.W.2d 378. It found that in 1978, state law mandated that local units fund and operate circuit and district courts and that the state subsidized a portion of judicial salaries. Id. at 405, 579 N.W.2d 378. It then concluded that Act 374 neither mandated new activities for local units nor increased the level of any activity required of local units. Id. Finally, it concluded that, despite incomplete information to perform the relevant equations, it was able to determine that Act 374 did not decrease the state-financed proportion of necessary costs of trial court operations to either Detroit or Wayne County from that provided on a statewide basis in 1978. Id. at 407-408, 579 N.W.2d 378.
On appeal here, the parties do not dispute the Court of Appeals findings regarding what Act 374 requires of local units and what state law required of local units in 1978 in terms of trial court operations. Rather, they dispute whether the Court of Appeals correctly identified the relevant activity under § 29 as "trial court operations." The parties' briefs and arguments before this Court suggest that these appeals turn on the how the relevant activity is defined.
However, there is an underlying issue that neither the parties nor the Court of Appeals explicitly addressed: what the proper frame of reference is for deciding whether a mandated activity constitutes a ...
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