Michigan Advisory Opinions August 16, 1990: AGO 6654 (August 16, 1990)

Michigan Attorney General Opinions

1990.

AGO 6654.

You have requested my opinion on four questions dealing with the 50 mill limitation contained in Const 1963, art 9, Sec. 6. The factual situation which gives rise to your questions is described in the letter accompanying your opinion request.

A portion of the Battle Creek Public Schools is located in Pennfield Township. The allocated and voter approved operating millages for this area are as follows:

DATE OF ELECTION PURPOSE MILLS

---------------- ---------------------------------------------- ----------

11/72 Calhoun County Allocated 5.56

11/72 Pennfield Township Allocated 1.00 (fn1)

11/72 Calhoun Intermediate School

District Allocated .26

11/72 Battle Creek Schools Allocated 8.18

08/82 Medical Care Facility .25

06/87 Battle Creek Schools Building and Site 1.00

06/88 Battle Creek Schools Extra-Voted 29.24

08/88 Pennfield Township Police & Fire 3.00 (fn2)

06/89 Battle Creek Schools Extra Voted 2.00

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Total 50.49

Note 1. Headlee Amendment rollbacks reduce this millage to )9585 mills

Note 2. Headlee Amendment rollbacks reduce this millage to 2)8753 mills

In answering your questions, I have assumed that the millages outlined in your factual scenario are accurate, and subject to the 50 mill limit. That is to say they are approved operating millages and not millages for special assessments, charter authorities, or for voter approved indebtedness excepted from the constitutional millage limitations by the second paragraph of Const 1963, art 9, Sec. 6. I have also assumed that all necessary adjustments for required rollbacks have been made.

Const 1963, art 9, Sec. 6, provides in pertinent part as follows:

"Except as otherwise provided in this constitution, the total amount of general ad valorem taxes imposed upon real and tangible personal property for all purposes in any one year shall not exceed 15 mills on each dollar of the assessed valuation of property as finally equalized. Under procedures provided by law, which shall guarantee the right of initiative, separate tax limitations for any county and for the townships and for school districts therein, the aggregate of which shall not exceed 18 mills on each dollar of such valuation, may be adopted and thereafter altered by the vote of a majority of the qualified electors of such county voting thereon, in lieu of the limitation may be increased to an aggregate of not to exceed 50 mills on each dollar of valuation, for a period of not to exceed 20 years at any one time, if approved by a majority of the electors, qualified under Section 6 of Article II of this constitution, voting on the question.

"The foregoing limitations shall not apply to taxes imposed for the payment of principal and interest on bonds approved by the electors or other evidences of indebtedness approved by the electors or for the payment of assessments or contract obligations in anticipation of which bonds are issued approved by the electors, which taxes may be imposed without limitation as to rate or amount; or, subject to the provisions of Section 25 through 34 of this article, to taxes imposed for any other purpose by any city, village, charter county, charter township, charter authority or other authority, the tax limitations of which are provided by charter or by general law."

From the facts presented, it is apparent that the constitutional 50 mill limitation will be exceeded in that portion of Pennfield Township which includes the Battle Creek Public Schools. The gross millage that has been approved totals 50.49 mills. With the Headlee Amendment rollbacks, the millage total equals 50.3238 mills.

Your first question is:

"Based upon the fact that the Board of Commissioners take an oath to uphold the State Constitution, what responsibilities do they have in enforcing Section 6 of Article IX of the 1963 Constitution?"

Section 37 of the General Property Tax Act, MCL 211.37; MSA 7.55, provides that, during its October meeting, the county board of commissioners shall ascertain and determine the amount of money to be raised for county, township and school purposes "... as shall be authorized by law...." The county board of commissioners shall then direct the correct millage to be spread on the various units of local government. Thus, the responsibility of assuring that the 50 mill limitation is not violated in any local governmental unit within the county falls initially on the county board of commissioners.

It is my opinion, therefore, in answer to your first question, that the county board of commissioners, at its October apportionment meeting, is charged with the responsibility of assuring that the constitutional 50 mill limitation is not violated in any of the local units of government in the county. If the county board of commissioners determines that a proposed millage in a local unit exceeds the 50 mill limitation, the county board of commissioners must reduce the millage, as explained in response to your third and fourth questions, infra, until the millage rate meets the constitutional standard.

Your second question is:

"In the event the Board of Commissioners has no responsibility in enforcing Section 6 of Article IX, then whose responsibility is it?"

As indicated in response to your first question, the county board of commissioners does have the initial responsibility to see that the 50 mill limitation contained in 1963 Const, art 9 Sec. 6, is not violated. If the county board of commissioners fails in its responsibility to enforce the 50 mill limitation at the October apportionment meeting, an appeal may be taken from that failure. Sections 37 and 37a of the General Property Tax Act, MCL 211.37, 211.37a; MSA 7.55, MSA 7.56, provides that an appeal from the county board of commissioners may be taken to the Board of State Tax Commissioners. This body was the precursor of the State Tax Commission, and appeals of this nature were transferred from the State Tax Commission to the Michigan Tax Tribunal. (See Emmet County v. State Tax Commission, 397 Mich 550, 554; 244 NW2d 909 (1976) and the Tax Tribunal Act, Secs. 31(a) and 41, MCL 205.731(a); MSA 7.650(31); MCL 205.741; MSA 7.650(41)). Thus, an interested party aggrieved by the failure of the county board of commissioners to properly exercise its responsibility as to the enforcement of the 50 mill limitation may appeal such action to the Michigan Tax Tribunal.

It is my opinion, therefore, in answer to your second question, that if the county board of commissioners fails to properly carry out its responsibilities as to the constitutionally required 50 mill limitation, an interested party who is aggrieved by such action may file an appeal with the Michigan Tax Tribunal.

Your third question asks:

"If the millage must be reduced, what procedure should be followed to attain constitutional compliance?"

The procedure by which a millage must be reduced has been the subject of two formal opinions from this office.

In OAG, 1949-1950, No 839, p 35 (October 21, 1948) the question was posed as to which governmental unit could levy its full millage when the total millage of all governmental units exceeded the 50 mill limitation. That opinion concluded that:

"This presents a situation in which the race is to the swift. If the school district, having voted its millage increase, acts first in providing a levy within that increase, then the township if in need of extra millage must take what is left out of its previously voted 35-mill increase. This is so because taxes must be spread uniformly within an assessing district, and the school district is part of the township territory." OAG, No 839, at p 36. [Citations omitted]

OAG, 1981-1982, No 5866, p 87 (April 7, 1981), again addressed this question. Quoting with approval the above passage from OAG No 839, this subsequent opinion concluded that:

"Notwithstanding the language quoted above, all governmental units within an unchartered township levy their millage on the same day, December 1. Thus, the decisive factor is which governmental unit first receives authorization from the electorate to increase its millage. Whatever may be left within the 50 mill limitation is then available to the next voting governmental unit." OAG, No 5866, at p 91.

Applying these opinions to the facts described above, it becomes apparent that the June, 1989 election in which the electorate approved 2 mills for the Battle Creek schools is the last voter-approved millage increase and is the millage increase which causes the total millage to exceed the 50 mill limitation. Thus, it is this millage which must be reduced by an amount sufficient so as to result in the total mills levied being within the 50 mill limitation. It always requires a vote of the people in the affected governmental unit to levy millage above the 15 or 18 mill limitations pursuant to Const 1963, art 9, Sec. 6.

In response to your third question, therefore, it is my opinion that, if all the other millages are levied up to their maximum allowable rates, the June, 1989 extra voted 2 mill increase for the Battle Creek schools must be reduced in an amount sufficient to bring the total millage levied under the 50 mill limitation. Since a substantial number of school districts are approaching the 50 mill limitation, the Legislature may wish to address the question of how the millage reduction should be spread among the competing governmental units so as to avoid potentially inequitable results and still stay within this limitation.

Your fourth and final question asks:

"In determining the millage subject to the 50 mill limit, do you utilize the actual voter approved rate or the reduced Headlee Amendment rate?"

The answer to this question is that the reduced rate is to be used. This rate would be one that encompasses any rollback due to the Headlee Amendment as well as any of the other millage rollbacks provided for in the General Property Tax Act, MCL 211.1a et seq; MSA 7.1(1) et seq. More precisely, the reduced rate would be the total of the approved millage rates (both voted and allocated) minus the millage rollbacks necessitated by the Constitution and statutes. In the instant case, it would be the total allocated and voted rate of 50.49 mills, less the Headlee rollbacks of .1662 mills resulting in a rate of 50.3238 mills. See, OAG 1979-1980, No 5726, p 830 (June 17, 1980), for a discussion on legally authorized millage levies.

It is my opinion, therefore, in answer to your fourth question that the millage rate to be used in determining compliance with the 50 mill limitation is the legally authorized rate, which includes any reductions or rollbacks required either by Const 1963, art 9, Sec. 31, or by statute.

Frank J. Kelley

Attorney General