931 N.W.2d 65
Mich. Ct. App.2018Background
- Michigan enacted MCL 388.1752b to reimburse nonpublic schools from the general fund for "actual costs" of complying with state health, safety, or welfare mandates (amended effective July 14, 2017). The statute lists examples (e.g., daily attendance, training, inspections, criminal background check fees) and defines "actual cost" largely by hourly wage rules.
- Plaintiffs (nonprofit organizations) sued in the Court of Claims alleging MCL 388.1752b violates Const. 1963, art. 8, § 2 (Proposal C) and art. 4, § 30 (two-thirds appropriation requirement). The Court of Claims held the statute facially unconstitutional under art. 8, § 2 and enjoined disbursements.
- Defendants appealed. This Court reviewed standing and the constitutional challenge de novo.
- The appellate panel held plaintiffs had statutory standing under MCL 600.2041(3)/MCR 2.201(B)(4) consistent with Lansing Sch. Ed. Ass’n and affirmed the Court of Claims on standing.
- On the merits the panel reversed the Court of Claims' facial invalidation: it adopted a three-part test (incidental/noninstructional; not a primary function necessary for the school's existence; no excessive religious entanglement) grounded in Traverse City Sch. Dist. and the 1975 Advisory Opinion and remanded for as-applied analysis of each reimbursable "actual cost." The court also directed the Court of Claims to reach the art. 4, § 30 claim on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge statute | Plaintiffs have standing to prevent illegal expenditure of state funds under MCL 600.2041(3) and MCR 2.201(B)(4) | Defendants argued plaintiffs lacked a distinct injury from the public at large | Plaintiffs have statutory standing; appellate court affirms standing consistent with Lansing Sch. Ed. Ass’n |
| Facial constitutionality under Const. 1963, art. 8, § 2 (Proposal C) | MCL 388.1752b unlawfully appropriates public money directly/indirectly to aid nonpublic schools and supports employment/attendance (facial invalidation) | Defendants argued reimbursements cover incidental noninstructional health/safety obligations and thus do not violate Proposal C | Statute is not facially unconstitutional. Reimbursements are permissible only if (1) incidental/noninstructional, (2) not a primary function necessary for school survival, and (3) avoid excessive religious entanglement; remand for item-by-item as-applied analysis |
| "Actual cost" definition (wage reimbursement) — does paying employee wages violate prohibition on supporting employment at nonpublic schools? | Plaintiffs: definition reimbursing hourly wages is direct support of employment and thus forbidden by Proposal C | Defendants: wages reimbursed are for noninstructional health/safety tasks mandated by law and are not support of employment for educational purposes | Court: wage reimbursement permissible when tied to noninstructional mandated tasks (not employment for educational purposes); Proposal C's employment ban construed as barring support for educational employment |
| Claim under Const. 1963, art. 4, § 30 (two-thirds appropriation for local/private purposes) | Plaintiffs asserted statute also violates two-thirds-approval rule | Defendants did not prevail on art. 8 challenge so Court of Claims must decide art. 4, § 30 on remand | Appellate court did not decide; remanded to Court of Claims to address art. 4, § 30 claim |
Key Cases Cited
- Traverse City Sch. Dist. v. Attorney General, 384 Mich. 390 (1971) (construed Proposal C to prohibit public funding that aids or maintains nonpublic schools, but allowed narrowly defined shared-time and auxiliary services that are incidental and not under private control)
- Advisory Opinion re Constitutionality of 1974 PA 242, 394 Mich. 41 (1975) (distinguished incidental auxiliary services from primary/essential aids like textbooks; held primary school operational aids unconstitutional)
- Lansing Sch. Ed. Ass'n v. Lansing Bd. of Ed., 487 Mich. 349 (2010) (overruled broader standing doctrines and affirmed limited/prudential standing consistent with statutory provision allowing nonprofits to sue to prevent illegal expenditures)