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. 6729

September 2, 1992

SCHOOLS AND SCHOOL DISTRICTS:

Agreement to pay funds to township in return for not levying authorized millage

TOWNSHIPS:

Agreement to not levy authorized millage in return for payment from school district

A school district may not enter into an agreement with a township whereby the township agrees not to levy extra-voted operating millage and the district agrees to provide the equivalent funds to the township.

Honorable Lewis N. Dodak

State Representative

The Capitol

Lansing, MI

You have asked the following question:

May a school district enter into an agreement with a township whereby the township agrees not to levy extra-voted operating millage and the district agrees to provide the equivalent funds to the township?

I am advised that your question is based on a specific situation wherein property taxes are already being levied in one township located within the school district at the 50-mill limit established by Const1963, art 9, Sec. 6. Three of these mills are an extra-voted millage levied by the township. Because that portion of the district in the township is already at the 50-mill limit, the school district may not levy the full amount of its authorized millage in that township. Concomitantly, it cannot levy the millage solely in the remainder of the school district because to do so would violate the uniformity requirements of Const1963, art 9, Sec. 3. East Grand Rapids School District v Kent County Tax Allocation Bd, 415 Mich 381, 400; 330 NW2d 7 (1982). If the township did not levy its extra-voted millage, the school district would be able to levy more of its authorized millage. The additional levy by the school district would generate considerably more revenue than does the township's levy.

School districts have only such powers as the Legislature confers upon them expressly or by reasonably necessary implication. Senghas v L'Anse Creuse Public Schools, 368 Mich 557, 560; 118 NW2d 975 (1962). An examination of the provisions of the School Code of 1976, MCL 380.1 et seq; MSA 15.4001 et seq, and all other relevant statutes, reveals that the Legislature has not expressly authorized a school district to enter into an agreement with a township in which the township agrees not to levy its extra-voted operating millage and the school district agrees to pay the equivalent funds to the township. Historically, townships and school districts have each independently approved and levied their own extra-voted millages.

OAG, 1975-1976, No 4963, p 375 (April 8, 1976), considered a proposed expenditure quite analogous to the one proposed here. In OAG No 4963, the school district proposed to expend funds to help defray the legal fees incurred by a township in defense of valuation appeals before the Tax Tribunal. The opinion concluded that the school district had no authority to contribute to the fee of the township's attorney because he would not be representing the school district. Because of its higher millage rate, the school district actually had a greater interest in the outcome of the valuation appeal than did the township but, again, the potential benefit did not authorize the expenditure.

Subsequently, the Legislature amended the applicable statute to authorize taxing units to share in the cost of valuation appeals. OAG, 1985-1986, No 6297, p 87 (June 3, 1985), then concluded that because the Legislature had now authorized school districts to contribute funds to other units for such appeals, school districts could contribute funds to assessing units, including townships, who were engaged in valuation appeals before the Tax Tribunal or the courts.

The school district involved in your inquiry is a third-class district and is authorized by section 246(f) of the School Code of 1976 to:

Do anything not inconsistent with this act which is necessary for the proper establishment, maintenance, management, and carrying on of the public schools of the district.

This provision, however, cannot be read as a plenary grant of authority in the area of levying and collecting property taxes. In Const1963, art 9, Sec. 6, the people have authorized, inter alia, school districts and townships to levy extra-voted millage that has been approved by their respective voters. This constitutional provision has been implemented by the Legislature in the Property Tax Limitation Act, MCL 211.201 et seq, MSA 7.61 et seq. Together, these provisions spell out in considerable detail the relative authority of local units of government in the allocation and levy of property tax millages. Neither Const1963, art 9, Sec. 6, nor the Property Tax Limitation Act contain any language authorizing an agreement between a school district and a township concerning the levy or non-levy of extra-voted millage. Given this extensive constitutional and statutory framework for the levy of extra-voted millage, the broad general provisions of section 246(f) of the School Code of 1976 simply cannot be read to authorize the agreement in question since it would substantially alter the relationship between the local governmental units as set forth in the Property Tax Limitation Act. If the Legislature had intended to alter these relationships, it would have expressly so provided.

It is my opinion, therefore, that a school district may not enter into an agreement with a township whereby the township agrees not to levy extra-voted operating millage and the district agrees to provide the equivalent funds to the township.

Frank J. Kelley

Attorney General