In August of this year, Lusk Albertson reported the release of a Court of Appeals decision in Taxpayers for Mich Constitutional Gov’t v Michigan, Case No. 33463. As our readers may recall, the case involved claims that the State of Michigan violated two sections of the Headlee Amendment. In a 2-1 decision, the court opined that Michigan had not violated Section 30 of the Headlee Amendment by using Proposal A funds to satisfy its Headlee Amendment obligations, which included payments to charter schools. Additionally, and importantly, the court unanimously agreed that Michigan violated Section 29 of the Headlee Amendment when it counted Section 30 Headlee Amendment funds toward its obligation to provide new funding toward State mandates implemented after the Headlee Amendment was enacted. Michigan filed a motion requesting that the court panel reconsider its opinion.
The court granted the request and re‑published/published new opinions. Substantively, the majority opinion remains unchanged, as does an original partial concurrence/dissent relative to the Section 30 issue. However, one judge on the panel filed a new opinion, including a partial dissent pertaining to the Section 29 issue. Judge Borrello concluded, “I would find that state funding provided to units of local government for new or increased state mandates under § 29 may be counted for purposes of § 30[.]” Id. (Opinion by Borrello, P.J., concurring in part and dissenting in part); slip op at 1.
The difference between the majority’s opinion and Judge Borrello’s conclusion is best illustrated by way of example. Suppose that Michigan had a requirement in 1970 that local governments were to perform Activity A. Section 29 of the Headlee Amendment prohibits Michigan from reducing the proportion of state financing of necessary costs for Activity A. Now suppose, in 2019, Michigan wanted to shut down Activity A and require a similar but distinct activity, Activity B. The majority would not allow Michigan to shift the funding previously used for Activity A to fund the necessary costs of Activity B. Instead, the previous Activity A funding would go toward the State’s general Headlee obligations, and the State would need to appropriate separate, additional funding for Activity B. In contrast, Judge Borrello would allow the funding previously allocated for Activity A to be shifted to fund Activity B, provided the funding did not reduce the overall proportion of state spending protected under the Headlee Amendment. In other words, funds allocated toward Activity B could be counted toward the State’s funding obligation under Section 30.
The new opinion, which may be accessed here, does not change the outcome of the case in any meaningful fashion – it is simply a dissent. However, it is possible the opinion could gain traction with the Michigan Supreme Court if the case is further appealed. Lusk Albertson will monitor the case and report back on any additional, noteworthy information