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. 5380 October 25, 1978 TOWNSHIP: Vote for extra millage TAXATION: Vote for extra millage by electors of a township Increases in the township property tax rates subject to the 15 mill constitutional limitation must be approved by township voters at a general or special election rather than at an annual or other meeting of inhabitants of the township. Honorable Robert W. Davis State Senator The Capitol Lansing, Michigan 48902 You have asked for my opinion as to whether a township may vote extra millage at an annual township meeting or whether such action may only be taken after election by the electors of the township at a special or general election. (1) Township voters have various taxing powers which may be exercised at an annual township and other meetings of township electors, subject to certain statutory limitations. For example, RS 1846, c. 16, Sec. 3, as amended; MCLA 41.3; MSA 5.3, provides: 'The inhabitants of any township shall have the power at any legal meeting, by a vote of the qualified electors thereof, to grant and vote sums of money, not exceeding such amounts as are or may limited by law as they shall deem necessary for defraying all proper charges and expenses arising in such township, but they shall not vote or raise by tax in any 1 year for contingent or ordinary expenses of the township to exceed the sum of $4,000.00, except in townships having an assessed valuation of $1,500,000.00 or less and then not to exceed $3,000.00 and except in townships where there are 10 or more election precincts, and then a sum not to exceed $5,000.00, and except townships having an assessed valuation of $8,000,000.00 or over and then not to exceed 1/2 of 1% of the assessed valuation according to the assessment roll of the last preceding year. In townships having an assessed valuation of $4,000,000.00 or over, but not more than $8,000,000.00, the qualified electors of such township at the next regular election to be held in such township, or at a special election called by the township board, shall vote on the proposition of the levy of not to exceed 1/2 to 1%, and if a majority of such electors voting thereon vote in favor thereof, then in any such township not to exceed 1/2 of 1% may be levied on the assessed valuation according to the assessment roll of the last preceding year. No money shall be raised by tax on the property of the township in excess of $5,000.00 in any 1 year for township purposes, except such as shall be voted for specific purposes, to be set forth and entered upon the records of the township, and all moneys so raised shall constitute a fund for the purpose or purposes so expressed, and shall not be applied to any other purposes. In townships having an assessed valuation of $8,000,000.00 or over, the amount so raised for ordinary or contingent expenses may be increased to 1/2 of 1% of the assessed valuation according to the assessment roll of the last preceding year. In townships having an assessed valuation of $4,000,000.00 or over, but not more than $8,000,000.00, in which the electors by a majority vote have voted in favor thereof, not to exceed 1/2 of 1% may be levied on the assessed valuation according to the assessment roll of the last preceding year. No board, officer or officers shall create any debt or liability against the township, or issue any warrant, certificate or order for the payment of money, except when the creation of such debt or liability or the payment of such money has been authorized by such vote or by the provisions of law.' [Emphasis added] Township electors may also vote up to 1% of the township's assessed valuation in any one year at any legal meeting upon due notice for the construction of a town hall or other public building. 1867 PA 157, Sec. 1; MCLA 41.231, MSA 5.2361. The township electorate at its annual township meeting may vote a property tax not to exceed 1/20 of 1% of the assessed valuation of such township for the maintenance, upkeep or repairs of the town hall, fire station, library or other public buildings in the township. 1927 PA 381, Sec. 6, as amended; MCLA 41.246; MSA 5.2376. All of these statutes are subject to the constitutional provision limiting property taxes to 15 mills contained in Const 1963, art 9, Sec. 6 which provides in relevant part: 'Except as otherwise provided in this constitution, the total amount of general ad valorem taxes imposed upon real and tangible personal property for all purposes in any one year shall not exceed 15 mills on each dollar of the assessed valuation of property as finally equalized. Under procedures provided by law, which shall guarantee the right of initiative, separate tax limitations for any county and for the townships and for school districts therein, the aggregate of which shall not exceed 18 mills on each dollar of such valuation, may be adopted and thereafter altered by the vote of a majority of the qualified electors of such county voting thereon, in lieu of the limitation hereinbefore established. These limitations may be increased to an aggregate of not to exceed 50 mills on each dollar or valuation, for a period of not to exceed 20 years at any one time, if approved by a majority of the electors, . . .' This 15 mill limitation was originally implemented by the Property Tax Limitation Act, 1933 PA 62, as amended, MCLA 211.20 et seq; MSA 7.61 et seq. That act grants to the county tax allocation board the power to set the property tax rate for each governmental unit in any given area of the county so that the combined rate does not exceed 15 mills. (2) Sec. 11 of the Property Tax Limitation Act, supra. Each type of governmental unit is entitled to receive a minimum allocation in each year, but not more than the amount required according to its proposed budget. For example, townships are generally allocated a minimum tax rate of 1 mill. 1933 PA 62, supra, Sec. 11. The relationship between the taxing power of the township electorate at its annual and other meeting and the tax rate which a township receives from the county tax allocation board is discussed in National Steel Corporation v Bates Township, 374 Mich 58, 67-68; 130 NW2d 882, 886-887 (1964), as follows: 'The extremely restrictive dollar limitations imposed upon townships' taxing powers by CL 1948, Sec. 41.3 and the powers given county tax allocation boards by CLS 1961, Sec. 211.211 assure, by design or otherwise, that relatively insignificant sums may be raised by taxation upon the sole authority of the township electors who attend annual town meetings. Without the favorable vote of a township's electors at a special or general election to raise the total tax rate above its constitutional limit of 15 mills (CL 1948, Sec. 211.203 [Stat Ann 1960 Rev Sec. 7.63]), no sum in excess of 1 mill on a township's assessed valuation can be levied without the county tax allocation board's approval. That approval is given, if at all, only when the county tax allocation board allocates to a township part of the balance of the constitutionally limited 15-mill tax rate remaining after first allocating to all of the local units their statutorily specified minimum tax rates. Such tax rate allocation, over and above the minimum tax rate allocation, is required to be made upon 'due consideration of the needs of the several local units, the importance to the public of functions of local units which might have to be curtailed, the need of local units for construction or repair of public works, the proposed or accomplished transfer of functions from 1 local unit to others, and any other facts or matters concerning the operations of local units which the board may deem relevant' as provided in CLS 1961, Sec. 211.211. In the event of a favorable vote of a township's electors to increase the constitutional tax rate limitation, as permitted by the Constitution and by CL 1948, Sec. 211.203, ad valorem taxes in excess of 15 mills can be levied at a town meeting without being subject to the county tax allocation board's approval. . . .' [Footnote omitted; emphasis added.] To increase its tax rate, the township must present the issue to the voters at an election pursuant to the following requirements set forth in Sec. 3(3) of the Property Tax Limitation Act, supra, with the vote taken by ballot and counted in the manner provided by the general election laws of the state: 'If any local unit shall hold an election for the purpose of increasing the total tax rate limitation, as provided for by section 6 of article 9 of the state constitution of 1963, the vote at the election shall be taken by ballot and the ballots shall be cast and counted in the manner provided by the general election laws of this state. The ballots shall state the amount in dollars per thousand dollars of state equalized valuation by which it is proposed that the total tax rate limitation on property in the local unit be increased and the number of years for which it is proposed that the increase shall be effective. Where a previous increase in the total tax limitation on property is about to expire and a new increase for the identical amount is proposed, the ballot proposal may be presented as a renewal or continuation of the previous increase for a specified number of years. The ballot shall specify the intended purpose of the renewed or new funds. The ballot may also state the purpose for which the funds derived from the voted increase over the constitutional tax rate limitation may be used, and such funds shall not be considered by the county allocation board in dividing the net limitation tax rate among the various governmental units entitled thereto under this act. Within 5 days after every election held in any local unit to increase the tax rate limitation, a certified copy of the official declaration of the result of the election shall be filed with the treasurer of the county or counties in which the local unit is located. The voted increase in the tax rate limitation shall be effective in the local unit only when the certified copy is filed. The notice of every election in which an increase in the total tax rate limitation is to be voted upon shall contain a statement by the county treasurer of the county or counties in which the local unit so voting is located of the total of all voted increases in the total tax rate limitation, in any local units, affecting the taxable property in the local unit so voting, and the years the increases are effective.' This election requirement for an increased township millage rate is underscored by the annual budget process under Sec. 10 of the Property Tax Limitation Act, supra, which requires that each local unit of government file with its proposed budget a sworn statement of any elections involving voter approval of increases above the 15 mill limitation. In light of the foregoing statutory authorities, it is my opinion that increases in township property tax rates subject to the 15 mill constitutional limitation must be approved by township voters at a general or special election rather than at meetings of the inhabitants of a township. Frank J. Kelley Attorney General (1)
(2)
Elections may set limits. 1933 PA 62, Sec. 5a et seq, as added by 1964 PA 278.