Michigan Cases September 10, 2021: Romulus Cmty. Sch. v. City of Inkster

Case Description

Order

On order of the Court, the application for leave to appeal the April 30, 2020 judgment of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.

Welch, J. (concurring).

Romulus Community Schools seeks to extend its "hold harmless" taxing authority to the portion of the city of Inkster that is now merged into the Romulus Community Schools’ district following the dissolution of Inkster Community Schools. In my view, the Court of Appeals erred to the extent that it suggested that Romulus Community Schools’ hold-harmless millage election in 2017 was a "nullity" as to Inkster households because "the residents of Inkster were not subject to a hold harmless millage before the Inkster schools were dissolved." Romulus Community Sch. v. Inkster , unpublished per curiam opinion of the Court of Appeals, issued April 30, 2020 (Docket No. 346548), p. 4. When the Legislature established the statutory process for the dissolution of school districts, it explicitly directed that receiving school districts may levy a tax "at a rate greater than the rate authorized within the dissolved school district at the time of the dissolution" once that tax has been "approved by ... all school electors within the receiving school district, including any expanded geographic area of the receiving school district resulting from attachment...." MCL 380.12(5). Through the passage of the district-wide hold-harmless millage, Romulus Community Schools was

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simply seeking to maintain across the expanded district the same footing on a per-pupil basis that it had enjoyed as a hold-harmless district before the dissolution and attachment.

Although I do not believe that Romulus Community Schools has received the benefit owed it as a receiving school district under MCL 380.12(5), I reluctantly agree with the trial court's conclusion that a writ of mandamus could not issue because Romulus Community Schools did not establish that defendants had a clear legal duty to collect the hold-harmless mills from Inkster residents simply because the millage passed. This case implicates the interplay between local governments under the General Property Tax Act (the GPTA), MCL 211.1 et seq. Although the GPTA is not always a model of clarity, the statutes governing the administration of tax collection following a school millage election require that the county board of commissioners spread the tax. See MCL 211.36(5) ; MCL 211.37. Romulus Community Schools has not established why this same rule would not apply in this instance, nor has it adequately explained why it did not directly challenge the Wayne County Board of Commissioners’ apparent refusal to allocate the hold-harmless operating millage tax on the residents of the city of Inkster. Cf. Calder v. DeWitt Twp , 75 Mich App 674, 676, 256 N.W.2d 47 (1977) (holding under MCL 211.37 that a township treasurer is only permitted to levy and collect taxes approved by the county board of commissioners).

There is another potentially significant inconsistency in the Court of Appeals’ reasoning. Relying solely on this Court's decision in Hillsdale Co Senior Servs, Inc v. Hillsdale Co , 494 Mich. 46, 832 N.W.2d 728 (2013), the Court of Appeals determined that a mandamus action in the circuit court was "not the proper forum to adjudicate a tax dispute" and that mandamus was unavailable because there was an adequate legal remedy in the Michigan Tax Tribunal. Romulus , unpub. op. at 5. In Hillsdale , we held that the tax tribunal has exclusive and original jurisdiction pursuant to MCL 205.731(a) over a "claim for mandamus to enforce the terms of a property-tax ballot proposition" because it was a question about tax rates. Hillsdale , 494 Mich. at 63-64, 832 N.W.2d 728. As the tax tribunal's jurisdiction was exclusive, we concluded that the circuit court lacked subject-matter jurisdiction over the claim. Id. In this case, if the Court of Appeals’ analysis is correct that this case is sufficiently similar to Hillsdale because this is a dispute about the enforcement of a millage rate such that MCL 205.731(a) applies, then the circuit court was not merely an improper forum but also lacked subject-matter jurisdiction to hear and determine the case. See id. A court that lacks subject-matter jurisdiction cannot resolve (and should not attempt to resolve ultra vires or through obiter dictum) any substantive or procedural legal arguments raised by the parties; it should do nothing except dismiss the action on that ground. Bowie v. Arder , 441 Mich. 23, 56, 490 N.W.2d 568 (1992). In other words, if the Court of Appeals was persuaded that Hillsdale governed, it had the obligation—sua sponte—to recognize its lack of jurisdiction and dismiss the action without further comment. See id. Accordingly, if the rule established in Hillsdale applies, then there was no subject-matter jurisdiction in the circuit court and the remainder of the Court of Appeals’ decision beyond recognizing that defect is "a mere nullity and void." See Fox v. Bd of Regents of Univ of Mich , 375 Mich. 238, 242, 134 N.W.2d 146 (1965) (quotation marks and citation omitted). Assuming that Romulus Community Schools attempts to pursue this litigation in the tax tribunal, there is at least a viable argument

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that the Court of Appeals’ analysis and conclusions as to any other issues raised are nonbinding.

The issues raised in this case are significant and at the intersection of local tax administration and school funding; they are issues that this Court might need to consider in the future. I question whether the Court of Appeals’ understanding of the framework of hold-harmless districts and the tax consequences of the school dissolution and attachment under MCL 380.12(5) was correct. Nevertheless, I agree with this Court's decision to deny the application for leave to appeal because Romulus Community Schools has still not shown that it is entitled to mandamus relief.

Bernstein, J., joins the statement of Welch, J.