*1 456 Mich OAKLANDCOUNTYv STATEOF MICHIGAN 102331, Argued January 16, (Calendar 17). Docket Nos. 102335. No. July 31, Decided 1997. County, twenty-four counties, Roy Rewold, Oakland other and Chairperson County Commissioners, of the Oakland Board of brought separate against two actions the of Court Claims the Michigan, Department Management Budget, of State the of and and Department Services, seeking declaratory the of Social and mone- tary Amendment, 1963, 9, 29, relief under the Headlee Const art plaintiffs for the costs of foster care. The claimed that the child Act, 400.117a, care fund amendment of the Social Welfare 400.117c; 16.490(27a), 16.490(27c), reduced the ratio of state financing of foster care services violation the Headlee court, Giddings, J., granted Amendment. The R. James the defend- summary disposition, holding ants’ motion that the child care fund amendment does not violate the Headlee Amendment because applies only Headlee to services activities that law governments effect, of local when it took and that state law did not require plaintiffs provide to care services at that time. Corrigan Appeals, (Weaver, RJ., The Court of and C. D. JJ. Corwin, participating), unpublished opinion per curiam, not affirmed in an that, finding although plaintiffs the state and fund foster care when services the Headlee Amendment took effect, only prohibits the amendment was not violated because it necessary reduction in the ratio of state of the costs fos- services, expenditures issue, prima facie, ter care and at necessary. were not It also concluded that the claims barred were applicable (Docket 159938). statute of limitation No. plaintiffs appeal. separate opinions, justices joined In to hold as follows: Cavanagh joined by I. Justice Justices and and Jus- Kelly, Boyle, joined by tice Justice held: Weaver, Riley, The cases are remanded for determination of costs for purpose determining whether there was a Headlee violation. Cavanagh joined n. Justice Justices Boyle, joined Chief Justice Justice held: Mallett, Brickley, v Oakland Co only 9, applies or activities to services § 29 art 1. Const date, not effective on its government state mandated that the local not burden optional. the state Under were those that shifting. by improper Before the government revenue units of local 55(h) Amendment, subsection the Headlee date of effective *2 chapter 12A of the Probate Code § and 25 of Welfare Act Social Therefore, the provide foster care. required and fund counties county provision implicated foster of in the Headlee Amendment care services. equally the Historically, shared have and the counties the state 2. 1980, funding In subsection
responsibility care services. foster of provide continue to state would 117a(4) that the amended to was county expenditures fifty percent from each of the annual finance 117a(4) potentially however, reduced fund; subsection child care by allowing percentage to counties reimbursed that the state the transfer fixed amount and to a limit its reimbursements the state to consequence, state is a the portion As its costs to the counties. a of fifty percent by paying the of its financial burden able to lessen fifty percent care, of actual projected rather than of foster costs costs. only to reimburse directs the state The Headlee Amendment 3. costs,” man- “necessary to maintain a those essential held to be
the case, budgeted program. are not the actual the costs In this dated previous rather, costs, but, based on of future costs estimates Further, years’ expenses. a local unit because a incurred cost necessary than a de minimis cost. if it is less a mandate is not state Cavanagh joined by and would fur- Justices Justice Boyle, plaintiffs state law to were hold that the ther the Headlee Amendment care services when and fund required to deter- Claims is Remand to the Court of took effect. percent- reduced the child care fund amendment mine whether the financing enactment of the age before the that existed of state Amendment. Headlee concurring joined by in Justice Brickley, Chief Justice Mallett, monetary damages part, not
part dissenting are in stated that only proper case; declaratory is the appropriate relief in this remedy. Michigan, 175 456 Mich in v State the decision Durant Unlike monetary because of the (1997), relief was awarded in which some recalcitrance, prolonged in this case the defendants defendants’ prolonged that The fact recalcitrance. not demonstrated have precludes every judicial this one battle before have won defendants any finding in bad faith. acted that defendants 144 Mich joined by concurring part in Justice Justice Weaver, Riley, part, dissenting pleaded regarding in stated that the facts state expenditures from child reimbursement of the care fund do directly 9, not out a make cause of action under Const art plead part prohibiting § 29. To of action under of 29 cause reducing proportion state from state-financed of the neces- sary any existing activity costs of or service of units of government law, plaintiff plead showing local state must facts continuing mandate, actually that there is a state that the state proportion funded the mandated at a certain year 1978-79, funding costs in the base and that the state of nec- essary dipped proportion year. succeeding costs has below that in a Pleading funding requirement 400.117a; in a decrease of MCL 16.490(27a), per did not establish a of art violation se. may complied statutory While the defendants not have with their fifty percent expenditures 1978-79, commitment to fund funding level, obligation and actual have been below imposed by Maintenance-of-Support that is on Clause begins place support §of with whatever level of was in when adopted. However, allega- the Headlee Amendment was the factual statutory funding tion of reduction level of creates a sufficient proceeding inference of reduction in actual to allow on the plaintiffs alleged funding. basis that have actual in state reduction *3 county provide pay State law mandates that the and for foster by probate care for those children determined the court to be in duty maintaining funding need of The is foster care. and the system. long activity foster As care as the mandated state law year, and the state contributed financial aid in Headlee base the the duty proportionate support. By ordering state has a to continue its services, probate foster the care court not extend does the local judicial county through ruling. 55(h) duties of a Under subsection already many the was foster care to as designated. Through orders, children as the court its the court merely places identifies the children in need foster care of and custody county Therefore, probate them in the of the court’s activity beyond order is an not increase the level of or service required by purposes 21.232(3); that law for state of MSA 6.3194(602)(3). Appeals plaintiffs plead The Court of held that the did not requirements budgeting process cause of action of a because prima resulted in a facie reasonable of estimate what costs were necessary. holding error, This was there are because issues of fact concerning whether defendants have not maintained the funding. premise level of The factual cause of for a action under Michigan vCo Oakland proportion of the neces- of in the actual decrease § 29 is a allege plaintiffs sary state law. mandated of an costs necessary costs, and budget not reflect actual amounts do showing on remand. make such a allowed to should be and remanded. Reversed Hampton & Clark Wardle, Lynch, Secrest,
Kohl, plaintiffs. M. for the Donohue) (by John L. Thomas Attorney General, and Kelley, Frank J. General, for the defendants. Casey, Solicitor Curiae: Amici and Karen H. Fink P.C. David Zausmer,
Fink (by Execu- County Chief Wayne Libertiny Ludden), County. Wayne tive and in these appeal leave to granted Court
Kelly, J. This defend- whether to determine cases consolidated PA 328 of 1980 provisions certain application ants’ art Const Amendment. Headlee violated the provisions care fund the child amended 29. Act 328 400.117c; and MCL 400.117a Welfare Act. Social of the care fund child 16.490(27c) (the and 16.490(27a) amendment). and the
Plaintiffs counties twenty-five Michigan are of Com- County Board of the Oakland Chairperson and are the State Defendants missioners. Budget Management Departments its commenced plaintiffs of the Certain Services. Social complaining defendants, against separate actions ratio of amendment reduced fund child care viola- care services county financing Amendment.1 Headlee provision of a tion *4 Chairperson Rewold, County Roy 1, 1988, September and Oakland On taxpayer, filed a County and Board of Commissioners of the Oakland 456 Mich Opinion by Kelly, granted
The of Claims motion Court defendants’ summary disposition holding, that the child care fund amendment does not violate Headlee Amendment. applies only It reasoned that Headlee to services or governments activities that state law of local when Headlee took effect. It found state law did require plaintiffs provide not to foster care services at that time. Appeals Court affirmed the Court Claims although
decision, it concluded that the state did require plaintiffs provide to and fund foster care ser- vices when Headlee took effect. It concluded that the prohibits Headlee violated, Amendment was not as it only reduction the ratio at which the state funds costs of foster care services. It found expenditures plaintiffs sought that the for which reim- prima “necessary.” bursement were not facie It also plaintiffs concluded that were not entitled mone- tary relief because their claims were barred applicable statute of limitation. agree Appeals plaintiffs
We with the Court were state law to and fund county foster care when services Headlee took effect. agree plaintiffs We do not that the costs for which prima “necessary.” seek reimbursement are not facie accept statutory period Nor do we of limitation applied by Appeals. Therefore, the Court of we would Appeals reverse the decision of the Court would remand these actions the Court of Claims proceedings opinion. for further consistent with this complaint They declaratory sought monetary Court of Claims. relief, May 1, 1989, twenty-four plain- as -well as costs and fees. On other complaint. complaints tiffs filed an almost identical Both were consoli- hearing August 14, dated for on 1989. *5 149 Oakland v Co J.
Opinion by Kelly, I alleged the child care fund have Plaintiffs improperly financed the state reduced amendment necessary proportion costs of Amendment. of the Headlee services in violation care application Amendment to the the Headlee As of question law, amendment is child care fund novo. Cardi- for this Court is de of review standard Michigan High Mooney High v School School nal (1991). NW2d 21 Ass’n, 75, 80; 437 Mich 467 Athletic portion Amendment relevant of the Headlee The provides: hereby reducing prohibited the state from
The state is necessary any existing proportion of the costs of financed by required of units of local Government or service 1963, 9, § state law. art 29.] [Const applies only provision to services or activities of The government that the state mandated on the local that were Headlee, effective date of optional. Livingston not to those Dep’t Management & Co v (1988). Budget, Thus, 635; 430 Mich 425 NW2d65 29 prevents reducing the fund- the state from its share of by prior citing ing programs Id., law. mandated Dep’t 252; 441 490 NW2d Ed, 236, Schmidt v Mich (1992). 584 attempt intent of the voters
In an to ascertain the they § enacted this Court has said: when placed spending, Having it was a limit on state loopholes shifting keep creating the state from either programs government without more to units of local carry propor- out, reducing state’s them funds “required” programs in effect at the spending for tion of 456 Mich
Opinion by [Livingston time Headlee Amendment was ratified. Co at 644.] § 29,
Under improper the state not burden local units shifting. revenue implement § To Amendment, of the Headlee Legislature §§ enacted 1979PA now codified as through govern- 14 of the state disbursements to local seq.) 5.3194(601) ment units act. MCL 21.231 et seq. purpose et “powers of Act 101 was to delineate the *6 pub- agencies
and duties of certain state responsible lic officers” for disbursement of state government funds to “local units of for costs implement to administer or certain activities or ser- government vices of local units of purpose state . . . .” Preamble to the act. The implementing compliance act is to ensure state with procedures. reimbursement
n Before enactment of the child care fund amend- ment, the relevant section of the Social Welfare Act provided: provide money
The office shall for the distribution of appropriated by legislature to counties for the foster county care of children. The amount distributed to each equal expenditures shall 50% of the annual from the child county 117c, care fond of except established in section expenditures pursuant 117c(3) made to section shall not be included. A distribution shall not be made to a county comply requirements which does not with the of 400.117a(4); act. 16.490(27a)(4).] this MSA [MCL Since the effective date of amendment, the sec- tion has read: Oakland Co v Opinion by Kelly, money the distribution of
The office shall appropriated legislature counties for the foster county care of children. The amount distributed to each equal expenditures of the annual from the child shall 50% 117c, except in section care fund of the established pursuant expenditures that neither made to section 117c(3) expenditures nor that exceed the amount aof budget approved under section 117c shall be included. A not distribution shall not be made to a which does comply requirements 400.117a(4); with the of this act. [MCL 16.490(27a)(4) (emphasis added).] plaintiff allege counties that the amendment to improperly funding 117a(4) subsection reduced state in violation of the Headlee Amendment.2 plead part § 29,
To a cause of action under this plaintiff plead showing (1) must facts that there is a actually continuing (2) that the state mandate, proportion3 funded the mandated at a certain necessary year (3) costs in the 1978-79, base funding dipped that the state costs has proportion year.4 succeeding below that in a Plaintiffs complaint arguments first amended and some of their they suggest plead- before this Court believe that ing requirement of a decrease of 117a *7 per § established, se, a violation of art 9, 29. This is may complied not so. Defendants not have with their statutory fifty percent commitment to fund of the expenditures funding in 1978-79, and actual have
2 The child care fund amendment also added subsections 6 and 7 to § § 117a and subsection 5 to 117c. 3 proportion pleaded, The actual would have be could be not to but discovery through proof established at trial. 4 By using past tense, imply we do not mean to that an action seek declaratory ing judgment premature underfunding would be before has occurred, controversy. long so as there is an actual
152
We implication plaintiffs have pleaded per a violation se However, 29. the fac- tual allegation statutory of reduction in level of fund- ing creates sufficient inference of actual reduction proceed that we plaintiffs as if alleged actual reduc- tion of funding.6
A We identify must first the activity or service under consideration. The Court of Appeals construed it as the development, maintenance, participation, funding system of a foster pursuant care chapter seq.; 12A of the Probate Code. MCL 712A.1 et seq. 27.3178(598.1) et 803(1) and 808-810 §§ Revised Act, Judicature MCL 600.803(1), 600.808- 600.810; MSA 27A.803(1), 27A.808-27A.810. Defend- ants ask us to view it narrowly, more as simply the provided foster care services order of probate Wayne court. Amici curiae County Chief Executive and the Wayne characterize the activity or service at issue as provision of foster care services under subsection 55(h) the Social Welfare Act. MCL 400.55(h); MSA 16.455(h). succeeding Legislature It is no means uncommon for a to decline appropriate promised by adopted by prior funds at a level a statute Legislature. particular, suggest In defendants’ briefs do not that defendants have any way. remand, plaintiffs request been misled in On should and the grant complaint Court of Claims should a motion to amend the to con opinion. form with this *8 Co v Oakland J. Opinion We con- limited views. reject
We the defendants’ at issue to extend to the activity or service sider under subsection foster care services providing of their fund- Welfare Act as well as of the Social 55(h) reach the Probate Code.7 We 12A, under ch 25 of ing implements Code because the Probate this conclusion provisions regarding Welfare Act the Social care services. identified, question
Once the is at required it was in existence and becomes whether became effective. The Court of the time Headlee Appeals that, purposes determined of the Headlee Amendment, chapter 12 of the Probate Code develop, maintain, participate in, counties to and fund system.8 a foster care We with the Court of agree “activity” specific implementing an “a and The Headlee act defines as government.” identifiable administrative action of a local unit of 21.232(1); MCL 5.3194(602)(1). specific MSA It defines a “service” as “a program government identifiable of a local unit of which is available to public provided general gov is for the citizens the local unit of 21.234(1); dispute 5.3194(604)(1). ernment.” MCL MSA Defendants not do provision that both the of foster care services meet these definitions. Appeals Court of Oakland Co stated: [Chapter Code], The Juvenile Code 12A of the Probate seq.; 27.3178(598.1) seq. Michigan’s 712A.1 et et establishes
juvenile justice
system.
and foster care
Counties have no choice
individually
multi-county
participate,
part
pro-
whether to
or as
of a
district, in
bate
the activities of the Juvenile Division of the Probate
contrary,
803(1)
Court. To the
RJA
mandates that each
part
probate
pursuant
that is not
of a
court district created
to RJA
previously
pursuant
§§ 808 to 810 or
created
to law shall have at
judge
probate.
populous
§§
least one
RJA
808-810 allow less
join together
probate district,
counties to
to form a
but either as
part
multi-county
single county district,
of a
district or a
each
required by
probate
the Revised Judicature Act to have a
probate
carry
court
out
court. Each
is mandated
the functions
prescribed,
alia,
Code,
expenses
inter
in the Juvenile
and thus
carrying
Code,
paid upon
incurred in
out the Juvenile
when
Judge
Probate,
order of the
are “activities or services
The Act, 55, requires Social Welfare the § public administer a welfare under the program direction of Children and Youth Services. Subsection of the Social 55(h) specifies: Welfare Act county department public The shall administer welfare program, (h) investigate, as follows: ... To when requested by probate court, pertaining matters dependent, neglected, delinquent children, way and and jurisdiction probate under the minors, court to ward of provide supervision provided by and care as court order .... 400.55(h); 16.455(h) (emphasis MSA [MCL added).][9] phrase public “shall administer a pro- welfare
gram” mandatory, permissive. not MCL 400.55; MSA 16.455 and MCL 400.55(h); MSA See 16.455(h).10 by statutes, state law.” But for these State counties would have no obligation maintain, participate in, juvenile jus- to create and or system, accordingly tice and foster care and such activities are “required by purposes. State law” for Headlee Amendment Durant Dep’t (On App 507, Remand), 516-517;
v
Ed
Third
203 Mich
513
(1994). [Unpublished opinion per curiam,
NW2d 195
ary 9,
issued Febru-
(Docket
159938), slip op
1995
No.
at 3.]
9 Therefore,
55(h)
§
subsection
existed at the time
29 of Headlee
became effective.
Fidelity
Co,
603, 612;
(1982).]
Ins
413 Mich
Thus, the Social Welfare Act outlines the entire child care plan county care services required under subsection 55(h), including duties probate court and the counties. MCL 712A.1 et seq.; MSA 27.3178(598.1) seq. et of the Probate Code implements provisions of the Child Care Plan, because probate establishment of a court required in order to fulfill the mandate of the Social Welfare 712A.25; Act. MCL MSA 27.3178(598.25). Sec- tion 25 of ch 12A of the requires Probate Code coun- ties to fund foster care services, and 117a allows counties to receive reimbursement from the state for these Wayne supra services. at Co, 535-536.
The state county asserts that foster care services are not covered the Headlee Amendment. It argues county may that a not qualify for reimbursement if it fails to meet certain requirements.
The state is correct in its county statement that a qualify must for reimbursement. Section 117c of the Social Welfare Act makes the treasurer “the money provided custodian of all for the use of the county department of services, juve- social [and] probate nile division of court . . . .” MCL 400.117c; MSA provides It 16.490(27c). that the must maintain a child care fund. One of the purposes *11 pay the fund is to for foster care services under 25 of ch 12A § of the Probate Code. MCL 400.117c(l), (2); 16.490(27c)(l), (2). Counties are entitled to reimbursement from the state for child care expendi- Oakland v Co they satisfy if tures the conditions for reimbursement prescribed by They plan submitting statute. include Department pur- budget to the of Social Services suant to 117a of the Social Welfare Act. The Office of Children and Youth is to with- Services any county comply hold funds from that does not with the 117a conditions for reimbursement. MCL 16.490(27c). 400.117c;MSA position misplaced. The focus of the state’s qualifications fact that certain must be met order activity to receive reimbursement does not make the “voluntary” funding purposes for of Headlee. The implicated “activity Headlee Amendment is where an involuntary. or service” is concluded, As we earlier provision or service is the provision foster care. The of foster care services voluntary optional. counties is neither nor reasoning Our conclusion is consistent with our Houghton Community State Bd Ed v Lake Schools, (1988). Houghton 658; 430 Mich 425 NW2d In Lake statutory provision, Schools, we construed a which stated: days
“The minimum number of of student instruction failing days shall be 180. A district to hold 180 of student instruction shall forfeit 1/180 its total state school aid for day each of failure.” at [Id. 667.] provision days We held that the of 180 instruction required activity purposes was not a implicated Headlee Amendment. Id. Headlee was not anticipated because the statute that a local school days board choose to fewer of instruc- merely forgo tion. It would state aid.
158
proportion any activity existing or of the costs of service activity A of units of Local Government state law. new activity any or service or an increase in the level of or service beyond required by existing required by law shall not be any legislature agency Government, or of units of Local appropriation pay unless a state is made and disbursed to the unit any necessary of Local Government increased costs. [Const 9, § art 29.] Oakland v Co act addresses implementing Section 21.234; sentence of 29. MCL the second language Section 5 outlines the 5.3194(604). Legislature’s MSA appropriate monies for “the neces- responsibility requirement.” 21.235; sary costs of each state 4(5) Subsection defines “state 5.3194(605). requires as “a state law which a new requirement” activity or service or an increased level *13 beyond required govern- that of a local unit of service law.” MCL MSA by existing 21.234(5); ment an exempts also a 4(5)(c) Subsection 5.3194(604)(5). requiremént” “court from the definition of MSA requirement.12 21.234(5)(c); 5.3194(604)(5)(c). hand, on the other addresses the lan- 12,
Section in the first sentence of 29. Section guage provides: enacted,
A state law shall not be which causes a reduc- proportion necessary in tion the state financed of costs activity required existing of an or service of local units of by existing law, existing requir- government law unless activity repealed. ing 21.242; an or service MSA [MCL 5.3194(612).] proportion defines financed 4(3)
Subsection “[s]tate necessary activity of an or ser- existing costs requirement” A is defined as: “court activity activity new or service or an increase in the level of [A] beyond required by existing required service law which is or comply government with a final state or local unit order arising interpretation from the of the constitu- federal court order States, existing tion of the United the state constitution of an statute, rule, law, regulation. 21.232(3); or a federal MSA [MCL 5.3194(602)(3).] 456 Mich by by government existing vice of local units of law” as specifically provided percentage costs government units
an or service of local existing law and financed the state on December 21.234(3); 5.3194(604)(3).] 1978. [MCL requirement” Significantly, the term “state does not appear Therefore, in the text of 12 of the act. requirement,” including definition of a “state exemption requirement, applicable. for a court is not imple- From that we conclude that the sections of the menting requirement” act that refer to a “state are only interpreting useful the second sentence of apply, § 29 of Headlee. The definition is intended to judicial ruling aha, inter to a that increases a local beyond required by financial burden a statute when Headlee was enacted. arguendo, require- assume,
Let us that the court exemption apply ment could to the first sentence in persuaded § 29. We are not that the action taken *14 probate pursuant §§ court to 24 and 25 of the Pro- requirement. bate Code could constitute a court By ordering probate services, foster care court county through does not extend the local of a duties judicial ruling. 55(h) Under subsection of the Social county already required pro- Welfare Act the was to many vide foster care to as children as the court des- merely ignated. Through orders, its the court identi- places fies the children in need of foster care and custody county. pro- Therefore, them in the of the bate court’s order is not an increased “level of activ- ity beyond existing or service law” that v Oakland Co 5.3194(602)(3) purposes 21.232(3); of MCL for added). (emphasis date of the Headlee Amend-
Before the effective of the Social Welfare Act and ment, 55(h) subsection 25 of the Probate Code counties §§24 Therefore, care. the Headlee provide and fund foster county provision in the implicated Amendment care services. foster
B county required service, foster care is a we Since determine extent to which the state must financed the service before the effective date of the decide, well, Amendment. We must as Headlee the child care fund amendment reduced that whether amount. Headlee, fifty percent
Before the state reimbursed expenditures county of the annual from each child pursuant care fund to subsection 117a(4) Act. The fund Social Welfare is the source of financ- for foster care subsection ing services, of the Social Welfare Act. In 117c(l)(f) Leg- 117a(4) islature amended subsection of the Social amendment, Welfare Act. Under the the state would fifty percent continue to finance the annual expenditures from each child care fund. How- expenditures it would no reimburse ever, longer approved exceeded the amount under budgeted 117c. the child care fund amendment Consequently, potentially percentage reduced the reimbursed counties their care expenditures. 25 of ch 12A of the Pro-
The state contends that §
always required
pay
bate Code has
counties to
one
*15
162
hundred of their foster care Thus, costs. as argues, propor- the state there was no state financed contrary tion.13 We find that, historically, to the equally and the counties have shared responsibility of funding foster care services.
We recognize that 25 of ch 12A of the Probate general Code is the mechanism governs that probate court decisions, including a child in placing provides foster care. It expenses incurred in chapter out 12 carrying paid are to be from gen- county eral fund, provided by unless otherwise law. MCL 712A.25; MSA 27.3178(598.25). Subsection of the Social 117c(2) Act, however, specifi- Welfare cally states that child care fund shall be used “[t]he for the costs of foster care providing for children under sections 18c and 117a and under the jurisdic- tion probate court . . . (Emphasis .” added.) MCL 400.117c(2); MSA 16.490(27c)(2). Consequently, the source of foster care funds is “otherwise provided by law” for purposes of 25 of 12A ch the Probate Code.
The state contends
its obligation to finance
voluntary
foster care was
because it did not need to
reimburse a
comply
that failed to
with the
conditions of reimbursement.14 We agree that subsec-
contrary
legislative
We note that defendants’ assertion is
ato
report
history
programs
staff
on the
of the evolution of welfare
in Michi
gan.
report
notes that
The child care and trans- a fixed amount reimbursements to limit its portion services to the costs of foster care fer a of its consequence, lessens its the state As a counties. fifty percent pro- by paying of the financial burden fifty percent jected than care, foster rather costs of precisely By device, the state uses costs. actual type “escape this Court condemned hatch” Livingston Co at 644. 117a(4) of the Social Wel- subsection
The fact that fifty percent state to reimburse fare Act expenses before Headlee foster care of the question. only part There remains satisfies § art the text of Const additional fact that “necessary only reimburse the state to directs care. costs” “necessary implementing defines a act The Headlee pro- activity an or service “the net cost of cost” as 5.3194(603)(6). 21.233(6); MSA . . . .” MCL vided would incur if it cost the state net cost is the actual activity. provided incurred local Also, a cost is not a a state mandate unit because of A de minimus “a minimus cost.” if less than de cost government unit of cost to a local cost is “a net 456 Mich Opinion by Kelly, from a resulting state requirement which does not $300.00 exceed per claim.” MCL 21.232(4); 5.3194(602)(4).15
Consistent with the
act,
implementing
this Court
has stated that “necessary costs” are those essential
to maintain a mandated program. Durant v State Bd
Ed,
be no shift of
for services from the state to
governments
the local
adequate compensation.
without
marketplace
Actual cost in the
is also a reliable measure of
paid
what must be
order for a service or
to be
*17
provided.
at
[Id.
391.]
In
III,
Durant
the Court of Appeals interpreted this
language from Durant
I to mean that “absent coun-
tervailing evidence —whether based on realized costs
or theoretical costs —actual costs would be satisfac-
”
tory
prima
as a
facie indicator
‘necessary
costs.’
Durant Dep’t
v
(On
Ed
Third Remand), 203 Mich
App 507, 514;
In Oakland Co, the Court of Appeals reasoned: prima is Legislature reasonable for [I]t the to estab- facie presumption County lish a expenditures for which reimbursement sought from the State is but which are not budgeted necessary, were not eligible and thus are not for mandatory proportionate funding under article § 29. [Unpublished opinion per curiam, February 9, issued 15Thus, underfunding is the difference between what the state is proportionate necessary now and the amount of costs it funded in year. the base Oakland Co v Durant III at 513- citing slip op 159938), at
(Docket No. 514.] misapplied Appeals Durant
However, the Court III. budgeted are not the instant case costs in the
The county’s Rather, care services. foster costs of actual pursuant budget, 117c of formulated future costs an estimate of Act, is Social Welfare expenses. years’ previous number Since the based on requiring care varies annu- of children ally, merely budget proposed an estimate is following county program will incur the what costs year. budgeted parties no assertion that The make county’s expenditure actual is the same as a amount year. 117c(5). Therefore, current fiscal Section for the Appeals reasoning flawed. the Court of by summary disposi- decided As these cases were opportunity parties have an did not tion, necessary develop showing the costs of fos- a record parties provided. una- also were ter care services proofs showing what claims the coun- ble to submit care service to the state for foster ties submitted proofs for a deter- These are needed reimbursement. purposes of what constitutes a “claim” mination 21.232(4); 5.3194(602)(4). Therefore, on of MCL are court must decide what costs remand, the trial including costs, whether foster care any within the de minimus exclusion. fall
m
if
will determine
remand, the lower court
On
percentage of
amendment reduced the
child care fund
financing
the enactment
that existed before
the state
occurred,
found to have
If a reduction is
of Headlee.
456 Mich Opinion by
plaintiff
proper remedy.
counties are entitled to a
briefly
remedy
appropri-
generally
Wewill address
light
§
ate in a 29
in
violation case
of Durant v Michi-
gan,
(1997).
175;
456 Mich
This Court’s in decision Durant first to § address 29 Headlee violations Id. remedies. at 204. declaratory typi- In we Durant, noted that relief is cally appropriate § relief 29 actions. We rea- subject expedited soned that violations be should judicial resolution. Id. at 205-206. Under Durant, plaintiffs type allege future must and exdent of the harm so that the court a determine if 29 viola- purposes declaratory making tion occurred for judgment. way, In that the state will be aware of the adjustment necessary financial allow future compliance. “pro- Durant,
In we determined that the state’s longed recalcitrance . . . necessitates a substantial recovery” under the circumstances of this case. Id. at implicit reasoning 204. Our was that much harm had already imposition damages been done. The served remedy past both to some harm and to comply incentive to with Headlee in the future. resolution Durant was the result the real- ization that much of the harm sustained Headlee violations cannot be rectified when the reso- lution is far so remote in from time the violation. The directly reason is to the related nature of the harm involved in Headlee violations.
Thus,
we concluded that
creative constitutional
experiment
deserving
such as Headlee was
of an
equally
remedy. Anything
creative
less would offer no
Something
correction of the financial harm.
more
recovering parties.
would allow a windfall to the
See,
*19
167
v
Oakland Co
important
for this
generally,
An
basis
207-208.
id. at
pon-
of
the assessment
the fact that
was
conclusion
years
damages against
later would
the state
derous
suffering
taxpayers
state’s
twice for the
result
routinely
monetary damages
wrongdoing.
were
If
may
§
taxation
violations, additional
for 29
available
damage
It would
award.
to fund the
be
balancing
adversely
the state’s
of
affect the efficient
taxpay-
negatively
budget,
would
affect
which in turn
remedy
be con-
concluded, the
should
Thus,
ers.
we
which has
Headlee,
with the raison d’etre
sistent
taxpayer
always
Id. at 210.
revolt.
been termed
an award
Durant,
with the resolution
Consistent
underfunding
prolonged
damages in instances of
litigation
commencement of
state before the
prudent
limited circumstances.
under
also be
gov-
standing,
units of
we believe that local
As for
public
standing
sue on behalf of
have
to
ernment
they represent
§ 29 of Headlee.
under
Waterford
App 658; Ed,
Bd
98 Mich
Dist v State
School
reasoning
(1980).
Furthermore,
NW2d 328
attorney
suggests
respect
that all
to
fees
Durant with
persons bringing
relief under
a claim for
entities
similarly.
ordinarily
§
Accord-
be treated
should
application
ingly,
of the one-
here that
we conclude
any year
period
found in RJA 308
limitation
appropriate.
monetary
involving
We
relief is
case
opinion
express
of Claims
whether the Court
on
no
jurisdiction
not
The state did
this claim.
has
over
appeal
this
made below on
determination
from the
point in its brief.
but rather conceded
issue,
In Durant
204;
v
Plaintiffs’ first amended 400.117a; MSA year 1978-79, the Headlee base reimburse that the state would provided 16.490(27a) expenditures from the fifty of the actual percent the 1980 amend- fund, but that after child care capped fifty was at reimbursement ment the state *21 actual, expenditures percent of not budgeted, unrealistically budgeted an low that the state certainly would almost amount. While this situation 29, the and a violation of underfunding § result in directly make out a cause of pleaded facts do not 29. action under § part: provides, pertinent 29 1963, 9,
Const art § hereby prohibited reducing the state from The state is any necessary existing proportion of of the costs financed activity required of units of Local Government or service .... state law
2 1963, 9, § art 29. Const 456 Mich
Opinion by Weaver, J. plead part § To a cause of action under this of a29, plaintiff plead showing (1) must facts that there is a continuing (2) actually state mandate, that the state proportion1 funded the mandated aat certain necessary year (3) of costs in the 1978-79, base of funding dipped that the state costs has proportion year.2 succeeding below that in a complaint Plaintiffs’ first amended and some of arguments suggest they their before this Court that pleading funding believe that requirement a decrease in the per §of 117a established, ase, violation § may art 29. This is not so. Defendants not have complied statutory with their commitment to fund fifty percent expenditures in 1978-79, and funding actual obligation have been below that level.3The imposed that is on the state the Mainte- nance-of-Support begins Clause of 29 with whatever support place level of was in when Headlee was adopted. reject any implication plaintiffs
While I would pleaded per have a violation se the factual allegation statutoiy funding of reduction in level of creates a sufficient inference of actual reduction in proceed plaintiffs I on the basis that alleged funding. have actual reduction remaining purposes deciding issue, for plaintiffs alleged whether a cause of action, focuses proportion pleaded, The actual would not have to be but could be discovery through proof established at trial. 2 By using past tense, imply seeking I do not mean to that an action declaratory judgment premature underfunding would be before has occurred, long controversy. as as there is an actual It succeeding Legislature no means uncommon for a to decline appropriate promised by adopted by prior funds at a level a statute Legislature. normally legally obligation There is no enforceable to do so. *22 Michigan v Oakland Co by Weaver, applies activity. Article state-mandated on the proportion of financed “the state required of activity or service any existing costs of law.” The state by state Government units of Local from the supports expenditures question MSA 400.117a(4); funds. MCL county child care by MCL fund is directed Use of that 16.490(27a)(4). 16.490(27c)(2): MSA 400.117c(2); provid- costs of fund shall be used for the The child care 18c and 117a and ing for children under sections foster care jurisdiction probate .... of the court under the covers fos- 400.18c; 16.418(3), MSA 18c, MCL Section county department of social “financed a ter care duties of of the state-mandated . . . .” One welfare jurisdiction pro- of the is “under the department and foster care as supervision bate court to . . MSA 400.55(h); order . .” MCL provided court above, is MCL 117a, referred to 16.455(h). Section juvenile creates a which 400.117a; 16.490(27a), MSA funds, care for system, child justice funding including justice 117a(l) services. Subsection juvenile financing service as juvenile justice a defines judicial functions, provided service, exclusive likely within, to come juveniles are or are who juvenile pro- jurisdiction within, division of chapter No. 288 of 2 of XIIA of Act bate court under section amended, being 712A.2 section Acts of as the Public Compiled A Laws .... service . care .... includes . . 712A.25; picture, complete
To
provides:
27.3178(598.25)
*23
Expenses chapter, carrying except incurred out this as by specifically provided law, paid otherwise be shall be by upon judge probate county the order of trea- county. general surer fund from the county provide Thus, state law mandates that the and pay for foster care those children determined to probate be in need of care foster court. This is activity question. the state-mandated plaintiffs duty times, At refer to the state-mandated maintaining impre- as the child care fund. This is an duty maintaining funding cise The shorthand. is county system. foster care argue goes Defendants that the state aid to the maintaining child care fund and that the fund only is not Rather, mandated. counties have to main- receiving tain the fund condition as state aid. argue that Defendants the counties do not have to accept they so do aid, not have to maintain the duty. fund. This mischaracterizes the mandated duty operation long is of foster care. As activity as the mandated is state law and the state year, contributed financial aid in the Headlee base duty proportionate support. state has a to continue its Michigan, See Durant v 175, 198; 456 Mich 566 NW2d (1997). Similarly, unpersuasive argument I find the state’s activity that care is not a mandated requirement. imple- because it is a court The Headlee menting exempts act certain mandates from reim- requirements” exempted. bursement. “[C]ourt are 21.234(5)(c); 5.3194(604)(5)(c). “[c]ourt A requirement” is defined as: vCo Oakland Opinion Weaver, J. level of activity increase in the service or an or new [A] by existing beyond required law that service or government in order to unit of of a local which is arising from federal court order comply final state or with a States, of the United interpretation of the constitution law, existing a federal or an constitution the state 21.232(3); MSA regulation. statute, rule, [MCL 5.3194(602) (3).] alia, inter apply, intended
The definition financial burden a local increases judicial ruling Headlee was when by a statute beyond enacted. *24 court services, probate care
By ordering
county through
duties of
the local
does not extend
55(h)
subsection
Under
judicial ruling.
to as
foster care
required
already
was
its
Through
designated.
the court
many children as
the children
merely identifies
the court
orders,
custody of
them in the
places
care and
need of foster
order is not
Therefore,
probate
court’s
county.
beyond
activity
or service
“an increase
in the level
purposes
.
law” for
by . .
added).4
5.3194(602)(3) (emphasis
21.232(3); MSA
was a
that foster care
correctly determining
After
Appeals held
the Court of
service,
state-mandated
a cause of action
pleaded
had not
plaintiffs
process
budgeting
of a
requirements
because
of what
reasonable estimate
prima
in a
facie
resulted
statute maintained
necessary. Because the
costs were
the Court
expenditures,
those
support of
fifty percent
summary dispo-
grant
of Claims
affirmed the Court
of defendants.
sition
favor
exception
claiming
argument
§ 29 for
an
an
also raise
Defendants
played
in the decisions below.
has
no role
minimis costs. The issue
de
Plaintiffs that the Court of erred concerning because there are issues of fact whether defendants have not maintained the level of funding. agree plaintiffs.
I with As noted above, the factual premise for a cause of action under 29 is a decrease proportion necessary in the actual costs of an mandated state law. Plaintiffs allege budget that the amounts do not reflect actual showing costs. Plaintiffs make such a on remand. judgment
I would vacate the of the Court of Appeals and remand this case to the Court of Appeals5 proceedings opinion. consistent with this
Riley, J., concurred with Weaver, *25 Appeals, parties At the Court of regarding shall file briefs whether subject-matter jurisdiction the Court of Claims has over an action under Appeals Const art § 29. If the Court of determines that the Court jurisdiction, Appeals Claims does not have the Court of shall assume jurisdiction original over the case.