Sessa v. MacOmb County

Markman, J.

(concurring). I concur in the conclusion reached by the majority. However, in my judgment, use by local governments of the limited tax general obligation (LTGO) bond is contrary to the intent of the drafters of the Headlee Amendment and contrary to the common understanding of the people in adopting it.1 The Headlee Amendment “grew out of the spirit of ‘tax revolt’ and was designed to place specific limitations on state and local revenues.” *290Waterford School Dist v State Bd of Ed, 98 Mich App 658, 663; 296 NW2d 328 (1980); see, also, Airlines Parking, Inc v Wayne Co, 452 Mich 527, 532; 550 NW2d 490 (1996), quoting Durant v State Bd of Ed, 424 Mich 364, 378; 381 NW2d 662 (1985). “The ultimate purpose [of the Headlee Amendment] was to place public spending under direct popular control.” Waterford School Dist, supra at 663.

Nevertheless, as the majority correctly observes, the ltgo bond is not contrary to the language itself of the Headlee Amendment. In the words of Justice Cooley:

The object of construction, as applied to a written constitution is to give effect to the intent of the people in adopting it. In the case of all written laws, it is the intent of the law-giver that is to be enforced. But this intent is to be found in the instrument itself .... “Where a law is plain and unambiguous, whether it be expressed in general or limited terms, the legislature should be intended to mean what they [sic] have plainly expressed and consequently no room is left for construction.” [Cooley, Constitutional Limitations (Little, Brown and Company, 1868), p 55.]

Because I believe that the ltgo bond, unlike the “full faith and credit” bond, falls outside the scope of the plain language of Const 1963, art 9, § 31, I would hold that it is a constitutionally permissible fiscal device. At the same time, I write separately because I also concur with the Headlee Blue Ribbon Commission that ltgo bonds skirt the edges of the Michigan Constitution:

Ltgo bonds do, in most instances, have the same or greater impact on the total tax burden as voter approved bonds .... Ltgo bonds do inhibit public awareness of the fiscal situation of the unit issuing such bonds and can *291encourage units to incur debt to finance projects that would not command public support.
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. . . Ltgo bonds inhibit the full realization of the Headlee Amendment’s overall goal of restricting the power of government to increase taxes without the concurrence of the voters. [Report of Headlee Blue Ribbon Commission (September 1994), § 8, pp 55-56.]

Ltgo bonds are largely a post-Headlee Amendment device designed to allow local governments to carry out their fiscal affairs on a “business as usual” basis, unimpeded by the constraints of the Headlee Amendment. It is no accident that there has been an “explosion” in the use of LTGO bonds in the years immediately following the adoption of the Headlee Amendment, with current estimates that such bonds now represent approximately eighty percent of both the number and amount of local bond sales. Id. at pp 53, 57.

As envisioned by its drafters, the critical aspect of the Headlee Amendment is its requirement that local governments directly obtain the assent of the people before embarking upon a fiscal course of action that would increase the involvement of the public sector at the expense of the involvement of the private sector. Const 1963, art 9, §§ 25, 31; Report of Headlee Commission, § 5, pp 22-39. Ltgo bonds transform this process by effectively postponing the vote of the electorate from a time preceding the commitment of public resources to a time after such resources have already been committed. The result is to sharply alter the significance of an essential procedure under the Headlee Amendment — the direct vote of the people with respect to tax increases.

*292In the case of the issuance of a “full faith and credit” bond, Const 1963, art 6, § 31 requires an express vote of the people concerning whether additional public resources ought to be allocated for a bonded project. The vote is straightforward and unambiguously presents the electorate with a clear choice about the direction of government. The LTGO bond, however, obviates this pre-expenditure vote; instead, the bond is issued and the expenditure occurs absent a vote of the people. Only later, as payments on the principal and interest become due, are the people finally confronted with the fiscal implications of the bonded project. By this juncture, there is no longer an outstanding decision to be made by the people about the project itself; it has already proceeded without their direct approval.

Precisely because bonds need to be issued for their financing, bonded projects typically are substantial capital projects that necessitate hard decisions about fiscal priorities. Such projects ordinarily cannot be accommodated through minor tinkering with other components of the budget. Either decisions about such fiscal priorities will occur at a point when the people have a meaningful opportunity to approve or disapprove of the bonded project or such decisions will occur when the only practical options are to reduce substantially expenditures already contained in the budget or to increase taxes. The LTGO bond moves the point of decision making from the former to the latter. In addition, the vote mandated by the Headlee Amendment does not then occur in the context whether to support additional taxes for the bonded project — it is too late for that because the project has already been initiated or even com*293pleted — but rather it occurs in the context whether to support additional taxes for existing and often crucial public services, such as police or fire protection. There is no longer any direct vote as envisioned by the Headlee Amendment concerning the spending commitment that actually precipitated the potential tax increase.

The effect of the LTGO bond is to impose an inexorable pressure upon the people to accommodate local public spending as if the Michigan Constitution had never been amended by the Headlee Amendment. Rather than basing levels of expenditures, upon available revenues, as intended by the Headlee Amendment, the ltgo bond effectively bases levels of revenues upon actual expenditures. By vitiating the requirement that the people cast a direct vote preceding the spending commitment, an important element of the Headlee Amendment has been eroded.2

In enacting the Headlee Amendment, “we the people” expressed the view that their personal freedoms were implicated by high levels of public spending and taxation in the same manner as by abridgments of free speech and unreasonable searches and seizures. In interpreting and in enforcing the provision of the Headlee Amendment, the executive and judicial branches of government should recognize that it is *294entitled to respect commensurate with that owed longer-standing provisions of the Michigan Constitution.

With regard to the ltgo bond specifically, “the evidence is overwhelming that the supporters of the amendment intended to close the loophole that allowed local governments to obligate the taxpayers and then levy taxes on them to repay the debt — and do so without voter approval.” Minority Report (Limited Tax General Obligation Bonds) of Patrick L. Anderson, Report of Headlee Blue Ribbon Commission (September 1994), p 57. While this observation was part of what were otherwise minority views, there is no indication that the majority disagreed with this aspect of Commissioner Anderson’s observations.

I also do not join in the majority’s discussion of Bigger v Pontiac, 390 Mich 1, 4-5; 210 NW2d 1 (1973). That discussion would be more compelling, in my judgment, if it had set forth at what point plaintiffs would have been authorized to challenge the action of the board of commissioners under Const 1963, art 9, § 32. Had plaintiffs filed suit at any earlier juncture, it would doubtlessly have been argued that the suit was not yet justiciable or was premature. Bigger, which preceded the Headlee Amendment, cannot be understood to vitiate effectively an express provision of the constitution affording an individual the opportunity to sue for its violation. I concur with the substantive conclusions of the majority only.