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Legislative Commission Finds That State Imposed Over $2.2 Billion in Unfunded Mandates in 2009
3/31/2010
Section 29 of the Headlee Amendment to the Michigan Constitution expressly prohibits the State from imposing unfunded mandates on local units of government. However, a recent report by the Legislative Commission on Statutory Mandates (the “Commission”) makes clear that the State has often ignored this constitutional prohibition when implementing new legislation. The Commission’s report is the culmination of a two year investigation initiated by the State to determine the costs incurred by local units of government in complying with the numerous mandates that have been imposed on them by the State. The findings are staggering. In 2009 alone, the State imposed unfunded mandates that cost local units of government in excess of $2.2 billion dollars.
In addition to identifying the scope of the State’s noncompliance with the provisions of the Headlee Amendment, the report makes several recommendations for reforms that the Commission believes are necessary to restore “the checks and balances contemplated by the Headlee Amendment in the relationship between state and local government in Michigan.” The recommendations of the Commission are summarized as follows:
- Enact New Headlee Implementation Legislation. In order to address the lack of accountability associated with the imposition of unfunded mandates, the report recommends that the current implementing legislation of the Headlee Amendment, Act 101 of the Michigan Public Acts of 1979, be repealed and replaced with new legislation. The recommended replacement legislation would require the legislature to prepare a “fiscal note” in conjunction with the passage of every bill. Preparation of a fiscal note would require the legislature, in consultation with local units of government, to identify, estimate, and announce any increased cost to local units of government before a bill could be enacted. The recommended legislation would also prevent bills from becoming effective until the State provides the funding necessary to implement the changes called for in the bill.
- Provide for Expedited Litigation of Headlee Violations. In recognition that enforcing the Headlee Amendment through litigation “is a daunting, extraordinarily expensive and time consuming process” for local units of government, the report recommends that the Revised Judicature Act and the Michigan Court Rules be amended to help “ensure prompt and active judicial enforcement of funding [mandated] activities and services” in the future. Significant recommended changes include:
- Returning exclusive original jurisdiction to the Court of Appeals;
- Formally establishing the role of a “Special Master,” who would function as a fact finder and recommend conclusions of law to the Court of Appeals;
- Placing the burden of proving compliance with Section 29 of the Headlee Amendment on the State; and
- Relieving local units of government from having to comply with a statute found to be in violation of the Headlee Amendment, until the legislature brings the statute into compliance.
- Monitor the Legislature’s Compliance with the Headlee Amendment. Recognizing that the costs to local governments for mandated activities and services tend to increase over time, the Committee recommends in the report that the State’s executive branch, through a State agency or department and in consultation with local units of government, monitor the legislature’s compliance with the Headlee Amendment on an ongoing basis and report its findings to the legislature, the Court of Appeals and the Special Master. The monitoring agency or department would also participate in the fiscal note process, develop mechanisms for paying or reimbursing local units of government for State mandates, and assist in indentifying administrative rules and regulations that effectively impose State mandates on local governments.
Early indications suggest that the Committee’s recommendations for restoring State compliance with the Headlee Amendment are under serious consideration by leaders in the State House and Senate. The report was endorsed by both Senate Majority Leader Bishop and House Speaker Dillon in late February, and five House bills incorporating many of the Committee’s recommendations have been referred to the House Judiciary Committee. Our attorneys at Mika Meyers will continue to monitor the potential implementation of these significant changes in the law regarding unfunded State mandates.