(dissenting). One of the Headlee Amendments to this state’s constitution, § 29 of article 9, bars the Legislature from reducing the proportion of the necessary cost of an activity or service required by state law of units of local government.1
When § 29 was added to the constitution in 1978, state law required school districts to provide special education, supplemental milk and lunch programs, special education transportation, and bilingual education.2
The principal question presented is whether the state violated § 29 by reducing, since the base fiscal years, "state financed proportion” funding actually paid to some school districts but not to others for special education, supplemental milk and lunch programs, special education transportation and bilingual education programs. The other question is whether the state violated § 29 when, in 1989, it shifted to local school districts the cost of paying social security taxes by no longer funding the full employer’s share as it did in the base fiscal year 1978-79.3_
*285We would conclude that the state violated § 29 when it reduced funding actually paid to particular school districts for mandated programs, and that social security taxes are a necessary cost of providing mandated services.
i
This Court observed, in the opening round of this controversy, Durant v State Bd of Ed, 424 Mich 364, 378; 381 NW2d 662 (1985), that the Headlee Amendments were added to this state’s constitution4 as part of a "nationwide 'taxpayer revolt.’ ” The Court added that the "intent of the voters” was "to lower taxes and put a ceiling on state spending.”5
Section 29, the principal Headlee Amendment here at issue, providing that "[t]he state is hereby prohibited from reducing the state ñnanced proportion of the necessary costs of any existing activity or service required of units of Local Government by state law,”6 was added as part of that taxpayer’s revolt in an effort, this Court said, "to limit legislative expansion of requirements placed on local government, to put a freeze on what they perceived was excessive government spending,”7 so "that there be no shift of responsibility for services from the state to the local governments without adequate compensation”8 from the state treasury to the local treasuries._
*286In a subsequent case,9 this Court similarly observed that § 29 was designed to bar the state from shifting the cost of activities or services required by state law to local units of government:
Having placed a limit on state spending, it was necessary to keep the state from creating loopholes either by shifting more programs to units of local government without the funds to carry them out, or by reducing the state’s proportion of spending for "required” programs in effect at the time the Headlee Amendment was ratified.
This Court further observed in Durant that § 29 requires that the "actual cost” of providing the state-mandated service or activity "must be paid”10 by the state to the local unit of government; Headlee sought to bar additional "taxes both at the local and the state level”11 without voter approval.
These themes are also summarized in introductory § 25 of the Headlee Amendments, which provides that neither "state spending” nor property or other local taxes may be increased "without direct voter approval,” and that the state is prohibited "from shifting the tax burden to local government,”12_
*287A
The statutory scheme challenged by the plaintiffs embodies a budgetary dissimulation that would enable the state to avoid the Headlee "ceiling on state spending” by shifting to relatively wealthy school districts the cost of additional state spending to provide aid to poorer school districts.
The Attorney General asks this Court to validate this statutory scheme by declaring that the state complies with § 29’s edict — that there shall be no reduction in the proportion of the necessary costs of state-mandated programs — instanter, without actual payment, upon enactment of an appropriation bill that tentatively "allocates” to all school districts, wealthy and poor, the amounts required by § 29 to be paid.13 The Attorney General would stop the music immediately after the allocation, ignoring that it is further provided in the *288School Aid Act that there shall be deducted and recaptured to the state treasury amounts so tentatively allocated to wealthy school districts.14
The Attorney General would thus treat the tentative allocations of the amounts required to be paid pursuant to § 29 as satisfying the state’s obligation to avoid reducing the proportion of the necessary costs even though the amounts tentatively allocated will not, by reason of the recapture, be fully paid to wealthy school districts.
In a word, what is "allocated” need not be paid in order to comply with § 29, although this Court recognized in Durant that the proportion of the actual cost "must be paid” to effectuate the goals of Headlee.
The result is that the sums recaptured from the tentative allocations are nothing more than bookkeeping entries, and need not actually be "paid.” *289The tentative allocations are thus a sham, unless there is recognition that, by reason of the recapture, the amount tentatively allocated is not the actual allocation.
B
In Durant, supra, p 388, this Court held that § 29 does not require that unrestricted state aid15 to school districts be maintained at the level provided in the Headlee base fiscal year (1978-79) because the Legislature had not required school districts to offer a "core curriculum,” and hence unrestricted state aid is not funding for an existing activity or service required of local units of government by state law. "Only specific, identifiable programs required to be provided by school districts by statute or agency rule are included under § 29. ”16
"Specific, identifiable” funding programs are referred to in the School Aid Act as restricted or categorical funding. There are thus two kinds of state school aid: unrestricted and restricted (categorical).17 Having decided in Durant that § 29 does not require the state to maintain the same level of unrestricted aid, the question remained whether § 29 required the state to maintain the same level of restricted or categorical aid.
The dissent contends that § 29 does not require the state to provide each school district with the proportion of the cost of maintaining state-mandated programs extant when the Headlee Amendments were ratified by the people, but only so requires with regard to new or enlarged man*290dated activities.18 Thus, unless there are new, postHeadlee mandated programs,19 the Attorney General’s construction of § 29 would in effect eliminate § 29 in its entirety as an obstacle to transferring all restricted or categorical school aid from wealthier to relatively poorer school districts.
The Attorney General’s construction neuters § 29’s prohibition against reducing the proportion of the necessary costs of pre-Headlee state-mandated programs. Section 29, as construed by the Attorney General, no longer would bar the state from shifting to wealthier school districts the entire cost20 of maintaining in those school districts pre-Headlee state-mandated programs without any compensation from the state.
Insofar as pre-Headlee mandated programs are concerned, school districts, for all practical purposes, would be read out Of § 29 as "local units of government.” But the Attorney General’s construction of § 29 is not limited to school districts. The allocation/recapture charade provides the means of neutering § 29 with regard to all preHeadlee state-mandated programs, thereby enabling the state to shift to local units of government the cost of providing funds for the "proportion” — so that there is no longer in actuality any proportion — of any pre-Headlee state-mandated programs, and thereby freeing up the "saving” achieved for expanded state spending for any purpose at the expense of local taxpayers who must either accept a reduction in other local services or *291vote for increased taxes at the local level to provide the funds needed to pay the proportion of the necessary costs of providing the pre-Headlee state-mandated service. The state thereby increases state spending with money provided by local governments.
Local units of government had the option, before the adoption of the Headlee Amendments, of paying for state-mandated programs by raising taxes or reducing nonmandated programs. Section 29 was not added to the constitution to preserve to local units of government those pre-Headlee options.
In voting for the Headlee Amendments, taxpayers were not voting for an abstraction, the reduction of the level of taxes generally, but rather were primarily seeking "to lower their [own] taxes both at the local and state level.” Durant, supra, p 378. Taxpayers sought primarily to reduce the taxes they personally are obliged to pay, not only the sum total of all the taxes paid by all taxpayers, "statewide/taken as a group”21 in the aggregate._
*292II
The roots of this controversy precede Headlee. There is an imbalance in the wealth of school districts that reflects the imbalance in wealth in society.
The Legislature and the Governors in all three administrations since Headlee was adopted have sought to increase state school aid funding of relatively poor school districts.
A
Transferring state school aid from relatively wealthy to relatively poor school districts may be, and in the minds of many is, a laudatory goal. That three Governors — two from one political party and one from another — and the Legislature have year after year, on an ever-increasing scale, enacted this diversion of school aid from relatively wealthy to relatively poor school districts, is testimony that there is wide political support for this legislative-gubernatorial action.
The end does not, however, justify the means.
Constitutions divide and limit the powers of government. Although the goal may be laudatory, it is the function of this Court to thwart the Legislature and the Governor in accomplishing even a laudatory goal by unconstitutional means.
B
The vice of the allocation/recapture charade is that it enables the state to do precisely what Headlee sought to prevent. Instead of reducing other state spending to provide the $15,500,000 in *2931980, $72,000,00022 today, and $79,000,000 in fiscal 1992-93,23 that the Legislature and Governors have desired to provide in additional funding for the poorer school districts, the School Aid Bill was amended in 1980, and annually thereafter, to provide for the ever-increasing deduction or recapture from the categorical school aid tentatively allocated to the relatively wealthy school districts.24
The result is that the wealthier school districts adversely affected must increase the level of taxation to maintain pre-Headlee mandated school programs, thereby shifting from the state to local school districts, albeit relatively wealthy, the burden of providing the funds required to enable the Legislature and the Governor to provide the additional funding for the poorer school districts without reducing other state spending or seeking voter approval for an increase in state taxes.
c
The Attorney General argues that the state does not save a nickel because the recaptured amount nevertheless is appropriated for school aid — unrestricted school aid — to the poorer school districts. The dissent accepts this half-truth.
Every nickel that is paid in additional funding to poorer school districts is a nickel that wealthier school districts must provide from other sources— either by reduction in nonmandated programs or increased taxation — in order to maintain the preHeadlee state-mandated program. This is clearly *294violative of the letter — state "spending may not be increasedthe state is prohibited "from shifting the tax burden to local government”25 — and the spirit of Headlee whereby, as expressed by this Court in Durant, "taxpayers were attempting to limit legislature expansion of requirements placed on local government, to put a freeze on what they perceived was excessive government spending, and to lower their taxes both at the local and the state level.”26
iii
The dissent concludes that the " 'statewide-to-statewide’ interpretation” of § 29 advocated by the Attorney General is more persuasive27 than the "local-to-local” interpretation28 advocated by the plaintiffs.
A
The dissent further states that because the plaintiffs in this case have not alleged any "aggregate, statewide shifting,” their § 29 claim fails as a matter of law.29 The dissent explains that an aggregate statewide shifting does not occur "as long as the state does not attempt to shift its aggregate, statewide funding responsibilities, with regard to 'any existing [state-required] activity or service/ *295onto units of local government.”30 (Emphasis deleted.)
It is apparent, however, from the face of the recapture provision, that the recapture in fact shifts to wealthier school districts the portion of the "aggregate, statewide funding responsibility” that is recaptured. Money tentatively allocated to the wealthier school districts for the pre-Headlee state-required programs is recaptured by the state, to be used to partially fund additional unrestricted funding for poorer school districts.
B
The debate over whether the statewide or local unit of government interpretation is the correct interpretation of § 29 is a red herring. It makes no difference whether the proportionate share is computed statewide/as a group/in the aggregate or, alternatively, on a local unit of government basis. The critical leap is the notion that compliance with § 29 occurs instanter when a tentative allocation is made without regard to whether the state is actually obliged to pay the money so allocated.
If tentative allocation is viewed in isolation, without regard to the recapture or whether the money tentatively allocated is actually paid, the state achieves compliance with § 29 under either approach, statewide or local. If, on the other hand, tentative allocation is not viewed in isolation, but rather the underlying reality of the allocation/ recapture charade — the money recaptured is not, in fact, paid to the school district for the mandated programs — is recognized, then the state does not achieve compliance with § 29 under either approach, statewide or local.
The critical question then is not statewide or *296local, but whether one looks at the tentative allocation in isolation or, rather, looks at the net result after deduction of the amount recaptured.
We would look at the net result rather than focus on the fiction that compliance with § 29 occurs instanter upon the tentative allocation without regard to the recapture or whether the amount recaptured is actually paid to the school district to which tentatively allocated, or is in truth used to defray the cost of additional state spending to increase unrestricted school aid to poorer school districts.
c
The linguistic arguments, of the majority31 and the dissent,32 ignore the cardinal rule of constitutional construction recently again recognized in Altman v Meridian Twp, 439 Mich 623, 636; 487 NW2d 155 (1992), where this Court quoted approvingly the following statement in an earlier decision of this Court:
"The primary and fundamental rule of constitutional or statutory construction is that the Court’s duty is to ascertain the purpose and intent as expressed in the constitutional or legislative provision in question. Also, while intent must be inferred from the language used, it is not the meaning of the particular words only in the abstract or their strictly grammatical construction alone that governs. The words are to be applied to the subject matter and to the general scope of the provision, and they are to be considered in light of the general purpose sought to be accomplished or the evil sought to be remedied by the constitution or statute.” [White v Ann Arbor, 406 Mich 554, 562; 281 NW2d 283 (1979).] [Emphasis added.]
*297The dissent states in effect that because the first sentence of § 29 speaks of "units of Local Government” in the plural, and the second clause of the second sentence speaks of payment to a "unit of Local Government” in the singular,33 actual payment to each unit of local government of the state financed proportion is not required for a preHeadlee mandated service, but is required for a new activity or service or an increase in the level of any activity or service beyond that required by existing law.
In Durant, however, this Court said:
The first sentence, the one at issue in this case, is aimed at existing services or activities already required of local government. The second sentence addresses future services or activities. Both sentences clearly reflect an effort on the part of the voters to forestall any attempt by the Legislature to shift responsibility for services to the local government, once its revenues were limited by the Headlee Amendments, in order to save the money it would have had to use to provide the services itself.
Because they were aimed at alleviation of two possible manifestations of the same voter concern, we conclude that the language "required by the legislature or any state agency” in the second sentence of § 29 must be read together with the phrase "state law” in the first sentence. This interpretation is consistent with the voters’ intent that any service or activity required by the Legislature or a state agency, whether now or in the future, be funded at an adequate level by the state and not by local taxpayers. [Id., pp 379-380. Emphasis added.]
The dissent’s linguistic differentiation of the mandate of the first and second sentences of § 29 *298ignores that they are both "two possible manifestations of the same voter concern,” and that the voters intended that "any service or activity required by the Legislature or a state agency, whether now or in the future, be funded at an adequate level by the state and not by local taxpayers.” (Emphasis added.)
D
Under the dissent’s construction, if, when Head-lee was adopted, the state was paying, say, twenty percent of the necessary costs of providing jails, probation officers, and courts, the Legislature could combine the appropriation for corrections, jails, courts, and the state police in one appropriation bill, and tentatively allocate to each county its proportion of the necessary costs of providing jails and courts, but provide that in those counties where the jails have an aggregate capacity of more than five hundred beds34 a sum of money equal to the amount appropriated to such a county for jails and courts shall be deducted and recaptured, thereby enabling the state to increase the appropriation for corrections or the state police without reducing a nickel of other state spending.
That § 29 had been violated would be clear if it was the one court of justice’s ox that was being gored, if the Chief Justice had to go to Wayne County or, if it has more than five hundred beds, Oakland County, and demand that those counties nevertheless provide the same amount of money for jails and courts so that the orderly administration of justice could continue._
*299ÍV
At the heart of the present controversy is the first sentence of § 29 which reads:
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. [Const 1963, art 9, §29.]
We find further support for our conclusion not to read "taken as a group” into "units of Local Government” in the context of § 29, as well as the definitional language of the Headlee Amendments, and the legislation implementing it.35
Considered in context, § 29 and § 30 cannot properly be read interchangeably. Section 30 provides:
The proportion of total state spending paid to all units of Local Government, taken as a group, shall not be reduced below that proportion in effect in fiscal year 1978-79. [Const 1963, art 9, § 30. Emphasis added.]
Both § 29 and § 30 refer to "units of Local Government,” but only § 30 specifies that such "units” are to be "taken as a group.” This suggests that "taken as a group” clarifies "units” for the purposes of § 30, and that "units” functions differently in § 30 than in § 29 and other sections.
"Local Government” is defined in the Headlee Amendments as
any political subdivision of the state, including, *300but not restricted to, school districts, cities, villages, townships, charter townships, counties, charter counties, authorities created by the state, and authorities created by other units of local government. [Const 1963, art 9, § 33. Emphasis added.]
Because school districts are a species of "local government,” the reference in § 29 to "units” of local government connotes a governmental entity smaller than a group comprised of all school districts in the state, and suggests that § 29 speaks of individual school districts.36
The legislation implementing the Headlee Amendments defines "Local unit of government” as
a political subdivision of this state, including school districts, community college districts, intermediate school districts, cities, villages, townships, counties, and authorities, if the political subdivision has as its primary purpose the providing of local governmental services for residents in a geographically limited area of this state and has the power to act primarily on behalf of that area. [MCL 21.233(5); MSA 5.3194(603)(5). Emphasis added.]
The section thus distinguishes between "school districts” and "intermediate school districts,” considering either alone to be a "local unit of government,” and implying that individual districts, not districts as a group, are "local units.”
Individual school districts provide government services for residents in "geographically limited” areas. The construction advocated by the Attorney *301General conflicts with this definition. Reading "taken as a group” into any reference to school districts or units of local government would eliminate the concept of a "geographically limited area” in the definition of a local unit of government. If "school districts taken as a group” designates all school districts in the state, then school districts would be geographically unlimited.
v
The Attorney General and amici curiae assert that the plain language of §29, arguable policy implications of the construction for which we write, and the purpose that prompted adoption of the Headlee Amendments, support reading "taken as a group” into § 29.
A
The Court of Appeals disposition is reflected in two orders. The Court dismissed the complaint for failure to state a cause of action, saying:
[N]o conclusory factual claim is made that corresponding reductions in unrestricted aid will cause the overall state contribution to local school services and activities across all school districts in the state to fall below that mandated by Constitution 1963, art 9, § 29. Plaintiffs claim only that individual districts will receive a lower percentage of their budgets than was the case in 1978-79; this is insufficient to state a cause of action, unless state aid falls short of the level mandated by article 9, § 29 as to all districts in the state, considered "as a group.” Durant v State Bd of Ed, 424 Mich 364, 392-393 (1985). [Order entered November 9, 1990 (Docket No. 132677). Emphasis added.]
The Court’s reliance on Durant was erroneous. *302The passage cited concerned the construction of § 30, not § 29.37
In denying rehearing, the Court of Appeals provided a different rationale for its disposition:
The "taken as a group” principle of Const 1963, art 9, § 30 applies to the present compliant, brought under the first sentence of article 9, § 29. That provision of the State Constitution speaks of "units of Local Government” in the plural only. [Order entered January 14, 1991 (Docket No. 132677). Emphasis added.]
The Court implied that the plural form of "unit” refers to the entire class of similar units, and thus that a claim would have been stated only if § 29 referred to "necessary costs of any . . . activity or service required of a unit of local government.”
For the reasons stated in part iv, we are persuaded that "units” functions differently in § 29 than in § 30.
B
The Attorney General argues that the first sentence of § 29 requires the state to maintain funding for the necessary costs of required "activities” or "services,” and does not require the state to *303maintain funding of the costs of "units of local government.”38
The Attorney General’s argument is selective and strained. Section 29 bars a reduction in the "state financed proportion” of the "necessary costs” of any "activity or service” required by law of "units of Local Government.” The issue central to this dispute is the meaning of "state financed proportion.”
The Attorney General contends that the "state financed proportion” required to be maintained under §29 is the amount of funding provided statewide for mandated programs. Plaintiffs assert that the "state financed proportion” means the amount provided by the state to each local school district. An argument that avoids addressing the meaning of "state financed proportion,” in terms of how the proportion should be calculated, ignores the constructional issue in dispute.39_
*304C
The Attorney General contends that "taken as a group” should be read into § 29 to avoid absurd and inequitable results. He maintains that unless "taken as a group” is read into § 29, § 29 will perpetuate funding inequities among school districts by continuing funding for mandated programs at 1978-79 levels, in effect freezing district entitlements according to the fortuities of circumstances as they were in 1978-79, and impair the ability of school districts to respond to changing economic circumstances.
The Attorney General’s argument, in essence, is that the Headlee Amendments were a bad idea. Our task is to construe § 29.40 The voters approved an amendment to the Constitution that fixes 1978-79 as the base fiscal year.41
D
The Attorney General argues that his construction of § 29 implements the intent of the Headlee Amendments to strengthen local control of government and that a contrary construction would generate overinvolvement by the state in the affairs of school districts. This argument assumes that reading "taken as a group” into § 29 would avoid the state "microanalyzing” each claim by a local district for reimbursement for mandated services.
Whether "taken as a group” is read into § 29 or not, a determination of the "state financed propor*305tion of the necessary costs” of mandated services in each school district is necessary. We recognize that the state has a legitimate concern with avoiding inaccurate claims. We fail to see, however, how that concern differs meaningfully whether there is a determination of the state financed proportion of funding for mandated services in a particular school district for a Headlee Amendments base fiscal year, or there is a determination for a particular school district under the recapture provision of the School Aid Act.42
E
We also find unpersuasive the Attorney General’s argument that "taken as a group” should be read into § 29 because that is the only construction that preserves the "historical discretion” of the Legislature to allocate resources among competing constituencies, and the "taken as a group” reading of § 29 facilitates redistribution of funds from wealthier to needier school districts. This argument ignores that when the voters amend the constitution, they generally do so to limit governmental power, and that here they amended the constitution to limit legislative discretion to shift the burden of supporting state-mandated governmental services from the state to local units of government.
The Headlee Amendments were enacted to limit the discretion of the Legislature. Voters sought to limit legislative discretion to mandate new programs for local governments, without funding them._
*306F
In conclusion, if "taken as a group” is read into § 29, and the state may recapture funds allocated to mandatory educational programs, taxpayers in "wealthier” districts will face the meaningless choice either of raising taxes or cutting back on nonmandated core educational programs.
State law requires school districts to provide special education, supplemental milk and lunch, bilingual education, and special education transportation programs. If the state may take funds for these mandated services away from some school districts and reallocate them to others, the school districts that lost funds would be obliged to compensate to fulfill their state-imposed obligations. Mandated programs would then be funded with money obtained either from cutbacks in non-mandated programs or increased taxes.
This choice is really no choice. This Court has held that neither education generally, nor any core curriculum is an "activity or service required ... by state law” for purposes of the limitations set forth in § 29.43 The "taken as a group” construction would effectively require local taxpayers to choose between raising their taxes, or cutting back on English, math, and science courses and significant traditional extracurricular activities.44 In approving a tax relief measure, the voters did not intend to put traditional core educational programs at risk.
The Headlee Amendments do not insulate school districts from making difficult financial choices. Obliging local units of government to increase taxes in response to a reduction of funding for *307state-mandated programs cannot properly be characterized as a "tough financial decision” consistent with the spirit of the Headlee Amendments. Nor could it be properly characterized as anything other than a "shift” of a burden from the state to local school districts.
The dissent would invest § 29 with only minimal antishifting effect:
As long as the state is prevented from shifting its funding responsibilities onto local governments on an overall, statewide basis, the goal of § 29 is fully realized and effectuated. [Ante, p 269. Emphasis added.]
Such a narrow reading of § 29 would effectively deprive many school districts of any protection under § 29. The "statewide interpretation” of § 29 would allow the state to do incrementally what it is otherwise prohibited from doing comprehensively. Districts that are forced, for all practical purposes, to raise taxes to meet state-mandated spending obligations would be left only with the abstract comfort of knowing that not all school districts faced the same "tough financial decision.”
VI
The majority rejects both the statewide-to-statewide approach, advocated by the Attorney General, adopted and set forth in the dissenting opinion, and the local-to-local approach advocated by the plaintiffs and adopted in this dissenting opinion. The majority adopts the approach, dubbed "state-to-local,” advocated by amicus curiae Michigan Education Association.
The mea argued that the "state financed proportion of the necessary costs” of mandated programs should be determined by first calculating the per*308centage of total state aid provided in 1978-79 to all districts "taken as a group” for a particular mandated activity. All local districts would then receive that same proportion of aid for that activity every year. Thus, if the state funded, on a statewide average, fifty percent of the costs of special education in 1978-79, each district would continue to receive funding for fifty percent of the necessary costs of its special education program every year without regard to whether the proportion of funding received by that district in the base year was above or below the state average.
The mea contends that this approach is simpler to administer because it requires only a single calculation of overall state funding, and also because it would establish a guideline for funding mandated programs in districts created after the Headlee Amendments were enacted.45
The state-to-local approach of the mea has the same flaw as the statewide-to-statewide approach advocated by the Attorney General. The mea approach still presents particular districts with Hob-son’s choice: raise taxes or reduce core curricula.
The majority, in arguing for the state-to-local approach, states:
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 *309the desire of the local units of government for minimum funding. The state-to-local ratio provides a uniform allocation of resources for mandatory programs.[46]
Neither the "state’s desire for discretion in allocating funds” nor the "desire of the local units of government for minimum funding” is relevant. The people resolved the policy questions when the Headlee Amendments were adopted. The majority departs from the Court’s prior constructions of the Headlee Amendments in seeking a balance between the state’s "desire” and the "desire” of local units of government.
Some units of local government will be advantaged by the state-to-local approach and others disadvantaged. It is unclear whether relatively wealthy school districts, as a group or in particular, will be advantaged or disadvantaged or poorer districts, as a group or in particular, will be advantaged or disadvantaged.
We repeat what we said earlier in this opinion:
In voting for the Headlee Amendments, taxpayers were not voting for an abstraction, the reduction of the level of taxes generally, but rather were primarily seeking "to lower their [own] taxes both at the local and state level.” Durant, supra, p 378. Taxpayers sought primarily to reduce the taxes they personally are obliged to pay, not only the sum total of all the taxes paid by all taxpayers, "statewide/taken as a group” in the aggregate. [Ante, p 291.]
VII
We next consider whether the state is obliged to pay the employer’s share of the costs of social *310security coverage for school district employees.47 We would hold that social security coverage is part of the state financed proportion of the necessary costs of providing mandated services under § 29, but not of providing education generally.
A
When the Headlee Amendments were enacted, the state funded fully the employer’s share of the costs of social security coverage for all school employees. Since 1986, federal law has made local school districts directly liable to the federal government for social security obligations.48 Since 1989, state law has provided for the recapture from "wealthier” school districts and reallocation to "needier” school districts of funds dedicated to social security coverage for school employees.49
We conclude, on the basis of Durant, supra, p 378, that to the extent state funds were allocated in the base years for social security coverage *311of employees engaged in general education, the funds were not used to defray a necessary cost of an activity or service required by state law. To the extent, however, that state funds were then allocated for social security coverage of employees engaged in mandated programs, such funds defrayed "necessary costs”50 of providing mandated services.
B
The Attorney General contends that § 29 allows the state to reallocate funds dedicated to social security coverage because social security coverage is not mandated by state law, and that, even if it were, it is not an "activity” or "service” within the meaning of the Headlee Amendments. The Attorney General also argues that redistribution of social security funds prevents inequities that result from voluntary decisions of "wealthier” districts, as well as state overinvolvement in local decision making.
We agree that social security coverage is not mandated by state law.51 Federal law mandates *312social security coverage.52
We also agree that social security is not a service within the meaning of the Headlee Amendments implementing legislation:
"Service” means a specific and identifiable program of a local unit of government which is available to the general public or is provided for the citizens of the local unit of government. The provision of a beneñt for, or the protection of, public employees of a local unit of government is not a program. [MCL 21.234(1); MSA 5.3194(604)(1). Emphasis added.]
School employees are public employees of school districts, and school districts are local units of government. Social security is a benefit provided to school employees, and thus is not a "service” for purposes of the Headlee Amendments. Accordingly, even if there were a state mandate for social security, the strictures of the Headlee Amendments would not be triggered by a reallocation of funds formerly dedicated to pay social security costs.
The Attorney General has acknowledged that social security is a necessary cost of providing mandated services.53 Accordingly, § 29 requires that the cost of funding social security coverage *313for employees engaged in the delivery of mandated services be included in the calculation of the "necessary costs” of those services in each school district.
c
While "wealthier” school districts might increase salaries of school employees in mandated programs, and thereby increase the burden of providing social security coverage for those employees, the Headlee Amendments were not enacted, as the Attorney General’s argument implies, to equalize the financial status of school districts. The Attorney General’s argument in this regard also ignores the attendant increase in the financial burden that a school district would assume to "take advantage of” state funding of social security coverage.
D
The Attorney General again raises the specter of state overinvolvement in local decisions as a consequence of state funding of social security coverage. If it is true, as the argument assumes, that state control inexorably follows state funding, this militates against any state funding, not just the funding of social security for a limited number of school employees._
*314Also relevant is that until recently the state, by subsidizing social security coverage for school districts, was engaged in exactly what is now contended constitutes state overinvolvement. Nor has the Attorney General provided evidence of actual "overinvolvement” arising out of social security coverage. In all events, if funding social security coverage in "wealthier” school districts poses the risk of state overinvolvement, reallocation of those funds to "needier” school districts would pose the same risk.
We would reverse and remand to the Court of Appeals for the entry of such orders as may be necessary to implement this opinion.
Riley, J., concurred with Levin, J.Section 29 provides:
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. [Const 1963, art 9, § 29.]
See MCL 380.1751; MSA 15.41751 (special education), MCL 380.1272a; MSA 15.41272(1) (lunch and supplemental milk program), MCL 380.1756; MSA 15.41756 (special education transportation), and MCL 380.1153; MSA 15.41153 (bilingual education).
Plaintiffs, fifty-one school districts and resident taxpayers, brought an action in the Court of Appeals pursuant to Const 1963, art 9, § 32.
MCL 388.1621(5); MSA 15.1919(921)(5) was amended by 1990 PA *285207, § 21(5) to allow allocations for social security to be counted when figuring the recapture percentage.
Const 1963, art 9, §§ 25-34, added by voter ratification, November, 1978.
Id., pp 390-391 (emphasis added).
Const 1963, art 9, § 29.
Durant, p 378.
Id., p 391 (emphasis added).
Livingston Co v Dep’t of Management & Budget, 430 Mich 635, 644; 425 NW2d 65 (1988) (emphasis added).
Id., p 391 (emphasis added).
Id., p 378.
Sec. 25. Property taxes and other local taxes and state taxation and spending may not be increased above the limitations specified herein without direct voter approval. The state is prohibited from requiring any new or expanded activities by local governments without full state financing, from reducing the proportion of state spending in the form of aid to local governments, or from shifting the tax burden to local government. A provision for emergency conditions is established and the repayment of voter approved bonded indebtedness is guaranteed. Implementation of this section is specified in Sections 26 through 34, inclusive, of this Article. [Emphasis added.]
School financing is administered within the framework of the School Aid Act, MCL 388.1601 et seq.; MSA 15.1919(901) et seq., which provides for two types of funding: restricted and unrestricted.
"Unrestricted,” or membership, funds are those that can be used for any school-related purpose permitted by law. Restricted, or "categorical,” funds are those that are earmarked for specific programs. Some programs receiving categorical funding are adopted voluntarily, e.g., vocational training, while others are mandated by state law, e.g., special education.
The state allocates unrestricted funds according to a formula set forth in § 21(1) of the act, MCL 388.1621; MSA 15.1919(921), that guarantees to each district a minimum amount of funding per pupil on the basis of the district’s levied millage rate. The amount of unrestricted funds per pupil equals the difference between the amount guaranteed and the amount per pupil generated from local revenues. The formulas for allocating categorical funds vary with each category of service.
Districts are eligible to receive unrestricted funds if the amount of revenue per pupil generated by local taxes does not exceed the amount of funds guaranteed per pupil by the state. Districts receiving unrestricted funds are said to be "in-formula.” Districts where local revenues exceed the state-guaranteed amount, thus disqualifying them from receiving unrestricted aid, are said to be "out-of-formula.” Generally, wealthier districts are out-of-formula, while poorer districts are in-formula.
To aid in-formula districts, which rely more heavily on state aid than do those that are out-of-formula, the act contains a "base revenue reduction,” or "recapture,” provision that allows the state to reduce, within limits, the amount of aid going to out-of-formula districts. The recaptured funds are redistributed to in-formula districts.
For the 1990-91 year, the act limits the percentage applied in the operation of the base revenue deduction to no more than ninety-nine percent, and limits the amount recaptured statewide to $72,093,600. MCL 388.1621(6), (8); MSA 15.1919(921X6), (8). The recapture provision operates by reducing the amount of aid going to an out-of-formula district by an amount equal to the percentage of state aid to which the district would be entitled absent any recapture. The applicable percentage is calculated according to formulas set out in MCL 388.1621(5); MSA 15.1919(921X5).
The first sentence of the complex recapture provision is set forth in § 21(5) of the School Aid Act:
If a district has more than 500 pupils and if the net allocation computed for a district pursuant to subsection (1) is a negative amount, it shall be applied as a deduction against any funds otherwise tentatively allocated to the district under all other sections of this act.
Other applicable provisions are subsections (4), (6)-(8), MCL 388.1621; MSA 15.1919(921).
See n 13.
Reporter’s syllabus accompanying Durant, p 366.
Id.
Ante, p 266, n 2.
Attorney General opinions almost uniformly conclude that postHeadlee enactments do not mandate new programs, and thus that § 29 is not applicable.
The entire amount tentatively allocated to the wealthier school districts has not, as yet, been deducted or recaptured, but the tendency of the legislation, moving from a cap of $15,500,000 to over $72,000,000, appears to be in that direction.
Another section, § 30, of the Headlee Amendments bars the Legislature from reducing the proportion of total state spending paid to all units of local government "taken as a group” below the proportion in the base fiscal year 1978-79. Section 30 provides:
The proportion of total state spending paid to all units of Local Government, taken as a group, shall not be reduced below that proportion in effect in fiscal year 1978-79. [Const 1963, art 9, § 30.]
The phrase "taken as a group” set forth in § 30 does not appear in § 29; for purposes of § 29, units of local government are not to be taken as a group.
The Court of Appeals concluded that § 29 does not require that the state pay the same proportion, as in the base fiscal years, of providing such programs to every school district. See Schmidt v Michigan, unpublished order of the Court of Appeals, entered November 9, 1990 (Docket No. 132677). The Court said that § 29 is satisfied if the state provides "all school districts in the state, considered 'as a group’ ” the cost of providing such mandated programs in all school districts. The social security claim was also dismissed. Id.
Some of this cap on the total amount to be recaptured will affect categorical programs that are not mandatory, and hence not subject to the limitations of § 29.
1992 PA 148.
The recapture language describes such school districts as "out of formula,” i.e., districts that receive no unrestricted school aid, that have more than five hundred pupils.
See n 12.
See ns 7 ff and accompanying text.
Ante, p 264.
Under the dissent’s statewide-to-statewide interpretation, the required state financed proportion is "the necessary costs of each state-required activity or service taken individually, but calculated on a statewide basis with regard to all relevant units of local government . . . .” Id., p 265.
Under the "local-to-local” approach, as defined by the majority, the state financed proportion is "the necessary costs incurred by each unit of local government, taken separately, with regard to each state-required activity or service.” Id.
Id., p 270.
Id.
Ante, pp 249-251, 254-255.
Id., pp 264-268.
The first clause also speaks of "units of Local Government” in the plural.
The recapture provision applies only to school districts having more than five hundred pupils.
We do not wish to be understood as suggesting that the Legislature can define what words in the constitution mean. But a contemporaneous legislative construction of what words in the constitution mean is, relevant when the constitutional provision limits legislative power, and the contemporaneous construction contravenes subsequent legislative efforts to avoid the limitations on its power.
This is the correct reading of § 29 even if one were to indulge the assumption that "school districts” in § 33 means "school districts as a group.” According to the Attorney General’s approach, § 29 and § 33 should be read together as meaning "school districts as a group.” Even so read, § 29 means a unit of government less than all school districts in the state.
In Durant, this Court did not read the "taken as a group” language set forth in § 30 into § 29. In the passage from Durant cited by the Court of Appeals, this Court said:
The term "taken as a group” clearly requires that the overall percentage allotment of the state budget for local units of government must remain at 1978 levels. . . . We affirm the Court of Appeals affirmance of the circuit court’s conclusion that § 30 only requires that state funding of all units of local governments, taken as a group, be maintained at 1978-79 levels. [Durant, supra, p 393. Emphasis added.]
The Attorney General argues:
The necessary costs of which the state must maintain its financed proportion are those of any "activity or service.” The phrase "required of units of Local Government by state law” is a participial phrase modifying "activity or service.” To reach plaintiffs’ construction, it would be necessary to rewrite the sentence to prohibit the state from reducing the proportion of costs of "units.”
Amicus curiae Detroit Federation of Teachers argues that "taken as a group” should be read into § 29 so that it harmonizes with Const 1963, art 8, § 2 which reads:
The legislature shall maintain and support a system of free public elementary and secondary schools as defined by law.
The dft asserts that unless "taken as a group” is read into § 29, the Legislature will not have the discretion needed to reallocate funds from "wealthier” to "needier” school districts in service of the mandate to provide free elementary and secondary public education.
The argument mirrors arguments made by the Attorney General and, if adopted, would eliminate § 29 in the context of school financing.
In a theme similar to the "changing economic circumstances” argument of the Attorney General, amicus curiae mea argues that the construction of § 29 it favors, part vi would provide ready guidance for funding mandated programs in school districts created after the enactment of the Headlee Amendment. It would be possible, however, to establish the level of funding in new districts by comparing them to the districts from which they were carved.
Const 1963, art 9, § 30.
The dissent argues that the "statewide interpretation” of § 29 is correct: "If such a local-to-local interpretation had been intended, that meaning could have been conveyed in any number of clearer and more sensible ways.” Ante, p 267.
Similarly it can be argued that clearer language could have been used to express the statewide interpretation favored by the dissent.
Durant, supra, pp 378, 388.
Such activities would most likely include athletics, music, drama, and driver education.
Concerning funding of districts created post-Headlee, see n 40.
Ante, p 252.
The Court of Appeals held that plaintiffs’ Social Security claim was not cognizable under the Headlee Amendments. See Order entered November 9, 1990.
Section 9002 of PL 99-509 (enacted October 21, 1986) amends section 218 of the [Social Security] Act [42 USC 418] and Subchapter C of Chapter 21 of the Internal Revenue Code of 1954 by removing the States’ fiscal liability for their political subdivisions’ Social Security contributions and requiring States and political subdivisions to pay Federal Insurance Contribution Act taxes in the same manner that private employers do. Administration and collection of these taxes is transferred from ssa to irs. The amendments are effective for payments due on wages paid in 1987 and later years. [53 Fed Reg 32973 (August 29, 1988). Emphasis added.]
MCL 388.1621(5); MSA 15.1919(921)(5), as amended by 1989 PA 197.
In 1986, a change in the federal law made local school districts directly liable for social security obligations. See n 48. Subsequently, the School Aid Act was amended so that the state allocated the employer’s share of pica directly to each school district, which would then forward the money to the federal government. MCL 388.1746; MSA 15.1919(1046), as added by 1987 PA 128.
The cost of social security coverage qualifies as a "necessary cost” as defined in Durant, supra, pp 390-391.
The original agreement extending social security coverage to state employees, authorized by 42 USC 418, was entered into on December 17, 1951. The agreement, signed by the acting commissioner for Social Security and the chairman of the State Employees Retirement Board, contained the following permissive language:
The undersigned . . . hereby agree to extend, in conformity with section 21E of the Social Security Act, as amended, the insurance system established by Title II of the Social Security Act, as amended, to services performed by employees of the State and employees of those political subdivisions of the State ....
[Public school employees approved the agreement] by a secret ballot . . . held on Dec. 14-15,1955 ....
*312Under the agreement, the state could terminate coverage, in whole or in part, "upon giving at least two years’ advance notice in writing to the Administrator . . .
In 1983, Congress amended 42 USC 418 to eliminate the termination provisions in social security agreements. See PL 98-21, § 103. The amendment bars state and local governments from terminating coverage for their employees unless the termination had taken effect before the date of enactment of the amendment.
The Attorney General argues:
The activities or services provided by plaintiff school districts are various educational courses. Some of these courses, such as drivers’ education, are required by state law and are activities and services within the ambit of art 9, § 29. Durant [v Dep’t of *313Ed (On Second Remand), 186 Mich App 83, 100-101; 463 NW2d 461 (1990)]. In providing these activities and services, plaintiffs may need to employ personnel, such as drivers’ education instructors. The essential costs incurred in employing these persons are ’’necessary costs” of the activity or service. These costs will include wages and fringe beneñts, such as insurance beneñts and social security. Items of employee compensation are clearly not, however, themselves activities or services. [Emphasis added.]