Saginaw County v. Buena Vista School Dist., Docket No. 145149
| Decision Date | 19 October 1992 |
| Docket Number | Docket No. 145149 |
| Citation | 196 Mich.App. 363,493 N.W.2d 437 |
| Parties | , 79 Ed. Law Rep. 1003 SAGINAW COUNTY, Plaintiff-Appellant, v. BUENA VISTA SCHOOL DISTRICT, Defendant-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
Braun, Kendrick, Finkbeiner, Schafer & Murphy by C. Patrick Kaltenbach, Saginaw, and Dickinson, Wright, Moon, Van Dusen & Freeman by Kenneth J. McIntyre, Thomas G. McNeill, and K. Scott Hamilton, Detroit, for plaintiff-appellant.
Henry G. Marsh, Saginaw, for defendant-appellee.
Before WAHLS, P.J., and SHEPHERD and NEFF, JJ.
In 1991, defendant raised its property tax rate from 9.05 mills to 10.05 mills without approval of a majority of the qualified electors in the district. Plaintiff filed this action in the circuit court, claiming that defendant's action violated Const.1963, art. 9, Sec. 31. The trial court found that defendant had not violated the constitution. Plaintiff appeals as of right. We affirm.
Michigan voters approved the Headlee Amendment, Const.1963, art. 9, Secs. 25-34 in 1978. It does not require all tax increases to be approved by voters. Instead it provides in part:
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. [Const.1963, art. 9, Sec. 31.]
Saginaw County voters approved property tax rate limitations on units of local government in 1974, pursuant to Const.1963, art. 9, Sec. 6. School districts were limited to a tax levy of 9.05 mills, but the limitation resolution provided that school districts located entirely within a city or charter township "shall receive, in addition, millage equal to the township millage" of one mill.
At the time the Headlee Amendment was adopted, defendant was located both in Buena Vista Charter Township and Zilwaukee Township and therefore could only levy property taxes at a maximum rate of 9.05 mills. In 1990, defendant redrew its boundaries so that it was located entirely within Buena Vista Charter Township.
It is clear that, were there no Headlee Amendment, defendant's 1991 millage increase would be authorized by the limits established by the county's voters in 1974. We are asked to decide whether the effect of the Headlee Amendment is to prohibit this otherwise authorized tax rate increase unless the voters of the school district first approve it. Plaintiff contends that because defendant legally could not levy taxes at 10.05 mills in 1978, it cannot do so now without voter approval. Defendant argues that because defendant could have levied taxes in 1978 at a rate of 10.05 mills had it been located entirely within a charter township, it can do so now.
The wording of the Headlee Amendment can support both parties' positions. There is a dearth of authority for us to turn to for guidance. The two opinions of the Attorney General plaintiff cites, OAG, 1985-1986, No 6285, p 46 (April 17, 1985), and OAG, 1989-1990, No 6588, p 149 (June 16, 1989), deal with a quite different situation, the effect of a township becoming a charter township. Such a change exposes property owners to a new category of taxes. See also Smith v. Scio Twp., 173 Mich.App. 381, 433 N.W.2d 855 (1988). The decision of this Court most nearly on point is Bailey v. Muskegon Co. Bd. of Comm'rs, 122 Mich.App. 808, 333 N.W.2d 144 (1983). It holds that a post-Headlee tax is lawful if the local unit of government was empowered to levy the tax...
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