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In 1978, Michigan voters approved an amendment to the state's Constitution that restricts state and local government spending and taxation, and provides important protections to taxpayers and local governments.
Known as the "Headlee Amendment" after its architect Richard Headlee, it has never been regarded as Lansing's best friend. In fact, successive legislatures and two governors treated it as, in the words of The Detroit News, "the orphan of the state Constitution." In some cases, Headlee provisions have been implemented poorly or even ignored--but that may change now because of recent action by Governor John Engler.
Last month, the Governor issued an executive order creating a 12-member Headlee Amendment Blue Ribbon Commission. The commission will evaluate the compliance of state and local governments, identify where and how the amendment is being undermined, and make recommendations for doing something about it.
This is good news for Michigan citizens, because the Headlee Amendment is a powerful tool for getting runaway government under control and making it responsible for its actions. It stipulates the following:
It limits all state taxes and revenues, except for federal aid, to the proportion of total personal income taken in taxes by the state in fiscal year 1979 (9.49 percent).
It prohibits local governments from adding new or increasing existing taxes without voter approval.
It prevents the state from requiring new or expanding existing local programs without fully funding them.
It prohibits the state from reducing the portion of its total budget allocated to local governments as a group.
It requires voter approval of bonds that must be repaid by taxpayers.
It limits the allowable annual increase in property taxes to the inflation rate plus new construction, and requires a vote of the people for any increase beyond that.
Problems have arisen since 1978 that point out a growing need to strengthen the amendment and put an end to both official hostility and neglect.
For example, the legislature created the Local Government Claims Review Board in 1979 to review and settle Headlee Amendment disputes with local governments. That Board has still not met. Meanwhile, hundreds of disputed claims by local governments across Michigan sit without resolution, and dozens are added to the list every year.
This inaction has produced ruinously expensive lawsuits. One such case concerns funding for state-mandated school programs and has been in the courts for over ten years. Another one ended up with the state being forced to reclassify more than $400 million in state spending from "local" to "state."
Due to the way the legislature interpreted "Headlee," some jurisdictions have actually raised millage rates without voter approval after higher-than-inflation assessment hikes have rolled them back. These so-called "Headlee roll-ups" break the spirit, if not the letter, of the amendment.
Other abuses by state officials since 1978 include exceeding the state revenue limit in 1985, subsequent to the 38 percent hike in the income tax rate under Governor Blanchard.
Controversies have erupted over occasional local government decisions to sell non-voted bonds. When the Troy School Board tried that route to get around "Headlee" in 1989, voters had no recourse but to recall almost the entire board. Elsewhere, local governments have attempted to disguise new or higher taxes as mandatory "user fees" for such things as recycling, to avoid the constitutional voter approval requirement.
Another abuse occurs when local officials place a property tax millage question on the ballot that would increase the authorized millage, but label it as a millage "renewal." That has become a common practice around the state.
Compliance with any constitutional provision is more than a symbolic act. The Constitution is our highest law, and noncompliance without penalty or redress contributes to a breakdown of constitutional democracy in general. It shouldn't matter that some state and local government officials find it difficult or inconvenient to abide by what they've sworn to uphold.
If the work of the Governor's new commission helps to strengthen the Headlee Amendment, it will do service to the rule of law as well as to the citizens of Michigan.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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