Mayor of Detroit v. State

Decision Date03 March 1998
Docket NumberDocket Nos. 201850,201852
Citation228 Mich.App. 386,579 N.W.2d 378
Parties, 158 L.R.R.M. (BNA) 2340 MAYOR OF DETROIT and City of Detroit, Plaintiffs-Appellees, v. STATE OF MICHIGAN and Department of Management and Budget, Defendants-Appellants. JUDICIAL ATTORNEYS ASSOCIATION and Governmental Administrators Association, Plaintiffs-Appellees/Cross-Appellants. v. STATE OF MICHIGAN, John Engler, Governor of Michigan, and Frank Kelley, Attorney General, Defendants-Cross- Defendants/Appellants/Cross-Appellees and County of Wayne and Wayne County Board of Commissioners, Defendants/Cross-Plaintiffs/Appellees/Cross-Appellees.
CourtCourt of Appeal of Michigan — District of US

City of Detroit Law Dept. by Phyllis A. James, Corporation Counsel, Joanne D. Stafford, Chief Asst. Corporation Counsel, and Dennis A. Mazurek, Principal Asst. Corporation Counsel, Detroit, and Dickinson, Wright, Moon, Van Dusen & Freeman by Peter H. Ellsworth, Joseph C. Marshall, III, and Jeffery V. Stuckey, Lansing, for Mayor of City of Detroit and City of Detroit.

Gregory, Moore, Jeakle, Heinen, Ellison & Brooks, P.C. by Mark L. Heinen, Detroit, for Government Administrators Ass'n.

Lee R. Franklin, Detroit, for Judicial Attys. Ass'n.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Deborah A. Devine, Margaret Bartindale, Gary P. Gordon, and Thomas C. Nelson, Asst. Attys. Gen., for State of Michigan, Dept. of Management and Budget, Governor of Michigan, and Atty. Gen.

Jennifer M. Granholm, Corporation Counsel, William S. Noakes, Deputy Corporation Counsel, and John C. Burchett and Harnetha W. Jarrett, Detroit, for Wayne County and Wayne County Board of Commissioners.

Before MARKMAN, P.J., and McDONALD and FITZGERALD, JJ.

McDONALD, Judge.

These cases present three challenges to 1996 P.A. 374. 1 Plaintiffs first contend that Act 374 violates Const. 1963, art. 9, §§ 25 and 29 (the Headlee Amendments). 2 Plaintiffs next contend that Act 374 violates Const. 1963, art. 3, § 2 (the Separation of Powers Clause). Finally, plaintiffs contend that Act 374 violates the public employment relations act (PERA), M.C.L. § 423.201 et seq.; M.S.A. § 17.455(1) et seq. The circuit court held that Act 374 violated both the Headlee Amendment and the Separation of Powers Clause, Const. 1963, art. 3, § 2, but that it did not violate the PERA. We affirm in part and reverse in part. 3

Docket No. 201850 presents the city of Detroit's challenge to the requirement of Act 374 that the city fully fund the 36th District Court. Plaintiffs, the mayor of Detroit and the city of Detroit, commenced this action for a declaratory ruling that the provisions of Act 374 pertaining to the transfer of funding responsibility for the 36th District Court to the city of Detroit violate the Headlee Amendment, Const. 1963, art. 9, § 29, and the notice requirements contained in M.C.L. § 21.238(2); M.S.A. § 5.3194(608)(2) and M.C.L. § 21.235(2); M.S.A. § 5.3194(605)(2) 4 because the Legislature did not make an appropriation sufficient to pay for the increase in an activity or service required of the city. The circuit court granted plaintiffs' motion for summary disposition. Defendants, state of Michigan and the Department of Management and Budget (collectively the state), appeal as of right the trial court's grant of plaintiffs' motion for summary disposition.

Docket No. 201852 presents challenges by defendants/cross-plaintiffs Wayne County and the Wayne County Board of Commissioners and by plaintiffs the Judicial Attorneys Association (JAA) and Government Administrators Association (GAA) (the collective bargaining representatives of the employees of the Wayne Circuit Court and the Detroit Recorder's Court) to the dissolution of the Detroit Recorder's Court and its consequent merger with the Wayne Circuit Court (Third Circuit Court). The circuit court declared that the provisions of Act 374 pertaining to the Recorder's Court, including those making Wayne County the employer of employees working in the Recorder's Court and those transferring funding obligations to Wayne County, violate the Headlee Amendments, Const. 1963, art. 9, §§ 25 and 29. Defendants/cross-defendants state of Michigan, the Governor, and the Attorney General (collectively the state) appeal as of right an order granting summary disposition to cross-plaintiffs Wayne County and Wayne County Board of Commissioners (collectively Wayne County).

In Docket No. 201852, the circuit court also enjoined the state from enforcing Act 374 to the extent that it makes Wayne County a coemployer of JAA and GAA members, finding that a sharing of authority over employment matters by two branches of government violates the Separation of Powers Clause, Const. 1963, art. 3, § 2. The state appeals this order as of right. The JAA and the GAA also cross appeal as of right, challenging the court's determination that the coemployment provisions of Act 374 did not violate the PERA. The appeals were consolidated.

Regarding the two constitutional challenges, we are mindful that "under established rules of statutory construction, statutes are presumed constitutional, and courts have a duty to construe a statute as constitutional unless unconstitutionality is clearly apparent." Mahaffey v. Attorney General, 222 Mich.App. 325, 344, 564 N.W.2d 104 (1997). To make a successful facial challenge to the constitutionality of a statute, as plaintiffs attempt here, the challenger must establish that " 'no set of circumstances exists under which the [a]ct would be valid.' " Council of Organizations & Others for Ed. About Parochiaid v. Governor, 455 Mich. 557, 568, 602, 566 N.W.2d 208 (1997), quoting United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987). "The constitutionality of a statute is a question of law that this Court reviews de novo." Blank v. Dep't of Corrections, 222 Mich.App. 385, 392, 564 N.W.2d 130 (1997). Whether Act 374 violates the PERA, a question of statutory interpretation, is also a question of law that this Court reviews de novo. In re Lafayette Towers, 200 Mich.App. 269, 273, 503 N.W.2d 740 (1993).

I

We begin our analysis with the Headlee Amendment challenge. The principal Headlee Amendment provision at issue is Const. 1963, art. 9, § 29, which 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.

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, 490 N.W.2d 584, quoting Durant, supra at 379, 381 N.W.2d 662. 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 "state-to-state" formulation, the "local-to-local" formulation, and the "state-to-local" formulation. 5 It ultimately adopted the "state-to-local" formulation. 6 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, 490 N.W.2d 584. 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, 490 N.W.2d 584; see also Durant v. Michigan, 456 Mich. 175, 187, 566 N.W.2d 272 (1997). 7

In Schmidt, supra at 252, 490 N.W.2d 584, the 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...

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