Opinion #6847

The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)

STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6847

May 12, 1995

CITIES:

Repeal of a city income tax ordinance by a petition and referendum vote of the electors

TAXATION:

Repeal of a city income tax ordinance by a petition and referendum vote of the electors

A city income tax ordinance adopted under the City Income Tax Act by the city council of a home rule city, and subsequently approved by referendum vote of the electors, can later be repealed by the city's governing body but it cannot be the subject of a second petition and referendum vote of the electors.

Honorable Donald H. Gilmer

State Representative

The Capitol

Lansing, MI 48909

You have asked whether a city income tax ordinance adopted under the City Income Tax Act by the city council of a home rule city, and subsequently approved by referendum vote of the electors, can later be repealed by petition and referendum vote of the electors.

An income tax is an excise tax that a city is authorized to levy under section 4i(a) of the Home Rule Cities Act and its implementing charter provisions. However, the Legislature may limit that authority if it chooses to do so. Dooley v Detroit, 370 Mich 194, 201, 217; 121 NW2d 724 (1963) . Following Dooley, the Legislature adopted the City Income Tax Act, 1964 PA 284, MCL 141.501 et seq; MSA 5.3194(1) et seq, as set forth in the title, to permit cities to impose and collect an income tax, to require the adoption of a prescribed uniform city income tax ordinance, to provide procedures for enactment (including a referendum), and to limit excise taxes levied on income.

Section 3(3) of the City Income Tax Act provides, with regard to adopting the uniform city income tax ordinance, as follows:

The uniform city income tax ordinance may be lawfully adopted or rescinded by the governing body at any time. The adoption of an ordinance is effective on and after January 1 or July 1 following adoption of the ordinance, as specified in the ordinance, but an ordinance shall not become effective earlier than 45 days after adoption or until approved by the electors if a referendum petition is filed as authorized in this act or a referendum is otherwise required. The rescission of an ordinance shall become effective on the following December 31. The ordinance may be rescinded at any time by the governing body in the same manner in which it was adopted and with appropriate enforcement, collection, and refund provisions with respect to liabilities incurred prior to the effective date of its rescission. [Emphasis added.]

The governing body of a city is expressly authorized by section 3(3) of the City Income Tax Act to adopt an income tax ordinance that incorporates by reference the uniform city income tax ordinance required by that statute. The governing body is also expressly authorized, at any time, to repeal the ordinance in the same manner it was adopted.

Section 3(4) of the City Income Tax Act provides, with regard to a referendum on the question of adopting the uniform city income tax ordinance, as follows:

Petitions for a referendum election on the question of adopting an ordinance adopted by the governing body may be filed with the city clerk not later than the sixth Monday following the adoption of the ordinance. The petitions shall be signed by a number of registered electors of the city equal to at least 10%, but not more than 20%, of the registered electors of the city voting in the last general municipal election prior to the adoption of the ordinance by the governing body. If proper petitions are filed, the question of adopting the ordinance shall be submitted by the governing body to the city electors at the next primary or general election or at a special election called for the purpose, in any case held not less than 45 days nor more than 90 days after the clerk has reported the filing of the referendum petition to the city's governing body. [Emphasis added.]

Under section 3(4) of the City Income Tax Act, a petition for referendum on the question of adoption of the ordinance must be filed within six Mondays of the time that the governing body adopts the ordinance. The City Income Tax Act has no other provision for a subsequent referendum petition to compel the governing body to either repeal the ordinance or to present the question of repeal to the voters.

The Court of Appeals has had occasion to consider referendum provisions in a general law in the case of Yurek v Sterling Hts, 37 Mich App 386; 194 NW2d 474 (1971), lv den 387 Mich 785 (1972). In that case, a group sought to compel city officials to accept their referendum petitions and to call a requested election on a rate ordinance adopted under the Revenue Bond Act of 1933, 1933 PA 94, MCL 141.101 et seq; MSA 5.2731 et seq. The group was relying on the referendum provisions in section 4i(6) of the Home Rule Cities Act and the implementing charter provision. Section 33 of the Revenue Bond Act of 1933 permitted the issuance of bonds subject to a petition for referendum filed prior to the issuance of bonds. The Court of Appeals found that the Home Rule Cities Act requires that a city charter not conflict with any general law of the state and that the Revenue Bond Act of 1933 was a general law. The court concluded, in part, at p 389:

Since nothing other than a referendum concerning the issuance of bonds is mentioned in this section, it cannot be construed as requiring public approval for passage of any ordinance under this act, except the original bond issue.

Similarily, here a petition and referendum vote of the electors on the question of repeal of a duly adopted city income tax ordinance are not authorized by the City Income Tax Act. The adoption of and referendum approving the income tax ordinance must be done in accordance with that statute. Therefore, only the governing body is authorized by the Legislature under the City Income Tax Act to repeal the ordinance. Enactment and repeal of a uniform city income tax ordinance are controlled by the City Income Tax Act, not the Home Rule Cities Act. This is in accord with the rule that if there is a conflict between a specific and a general statute, the specific statute will prevail, especially if enacted after the general statute. First Bank of Cadillac v Miller, 131 Mich App 764, 769; 347 NW2d 715 (1984). It also comports with the conclusion in a Letter Opinion of the Attorney General to Representative Raymond D. Dzendzel dated August 15, 1968, advising that the City Income Tax Act is the governing state law, and under that statute, the electors of a city were without power to seek subsequent repeal of an income tax ordinance by referendum petitions.

In establishing the current dichotomy between establishing and repealing a city income tax ordinance, the Legislature apparently recognized that, if a city income tax were to be repealed, the governing body would need to plan its budget in accordance with that repeal and make the other related decisions that would ensue upon repeal. Since city income tax revenues may have been committed not only for operating and capital expenditures but also for general obligation borrowing repayment, it is reasonable that the Legislature would leave the question of subsequent repeal to the governing body of the city. The Legislature, if it so elects, may, of course, amend the City Income Tax Act to make repeal of a city income tax ordinance subject to referendum petitions.

It is my opinion, therefore, that a city income tax ordinance adopted under the City Income Tax Act by the city council of a home rule city, and subsequently approved by referendum vote of the electors, can later be repealed by the city's governing body but it cannot be the subject of a second petition and referendum vote of the electors.

Frank J. Kelley

Attorney General