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

JENNIFER M. GRANHOLM, ATTORNEY GENERAL


EDUCATION:

LEGISLATURE:

SCHOOLS AND SCHOOL DISTRICTS:


Legislature's authority to reassign public school district's management authority over its tax millages


The Legislature may, by statute, reassign a public school district's management authority over its tax millages.

1999 PA 10 does not reassign payment responsibilities on loan obligations of the Detroit Public Schools.


Opinion No. 7023

June 18, 1999


Honorable Keith B. Stallworth
State Representative
The Capitol
Lansing, Michigan 48913


You have asked two questions regarding 1999 PA 10 which amended the Revised School Code to change the governance structure of the Detroit Public Schools.

Your first question asks whether the Legislature may, by statute, reassign a public school district's management authority over its tax millages.

The Revised School Code (Code), 1976 PA 451, MCL 380.1 et seq; MSA 15.4001 et seq, is "[a]n act to . . . prescribe rights, powers, duties, and privileges of schools, school districts, . . . to provide for the levy and collection of taxes; to provide for the borrowing of money and issuance of bonds and other evidences of indebtedness." The Legislature enacted 1999 PA 10, immediately effective March 26, 1999, to add Part 5A and amend Part 6 of the Code.

Under section 372 of 1999 PA 10, the Mayor of the City of Detroit is empowered by the Legislature to appoint six of the seven members of the School Reform Board, with the Superintendent of Public Instruction serving, ex officio, as the seventh member, for the ensuing five years. On March 31, 1999, Detroit's Mayor appointed the six members of the School Reform Board. Upon appointment of members to the School Reform Board, the powers and duties of the elected members of the Board of Education of the Detroit Public Schools were suspended (section 373(1)), and reposed in the School Reform Board until that board appointed a chief executive officer. Section 373(3). On May 12, 1999, a chief executive officer was appointed by the School Reform Board, at which time all the powers and duties of the elected board of education of the school district became reposed in that officer. Section 373(4). Members of the elected board of education may, for the balance of their unexpired terms, serve on an advisory basis, without any remuneration. Section 373(1).

Turning to your first question, the Code imposes a duty upon the governing body of a first class school district to adopt "estimates of the amount of taxes necessary for its needs for the ensuing fiscal year . . . specify[ing] the amount required for the 'general fund,' the amount required for the 'building and site fund,' and the amount required for the 'debt retirement fund.'" Section 432(1). The governing body is required to "adopt a budget in the same manner and form as required for its estimates and determine the amount of tax levy necessary" and to certify to the city in which the school district is located for apportionment, assessment, levy and collection of taxes for return to the school district. Section 432(2) and (3). Your first question, in essence, asks if the Legislature may validly repose the powers enumerated in Code sections 432(1), (2) and (3) in the School Reform Board and, subsequently, in the chief executive officer of the board upon his or her appointment.

The law is well settled that control of the public school systems of this state has been vested by the people in the Legislature. See, Const 1963, art 8,  2. In Lansing School Dist v State Bd of Education, 367 Mich 591, 595; 116 NW2d 866 (1962), the court addressed the concept of local self-government in public education.

Unlike the delegation of other powers by the legislature to local governments, education is not inherently a part of the local self-government of a municipality except insofar as the legislature may choose to make it such. Control of our public school system is a State matter delegated and lodged in the State legislature by the Constitution. The policy of the State has been to retain control of its school system, to be administered throughout the State under State laws by local State agencies organized with plenary powers to carry out the delegated functions given it by the legislature.

(Emphasis added.)

More recently, in East Jackson Public Schools v Michigan, 133 Mich App 132, 139; 348 NW2d 303; lv den 419 Mich 943 (1984), the court addressed the legal status of school districts.

School districts and other municipal corporations are creations of the state. Except as provided by the state, they have no existence, no functions, no rights and no powers. They are given no power, nor can any be implied, to defy their creator over the terms of their existence.

(Footnote omitted.)

Legislative control of public school systems has been characterized as "entire," Child Welfare Society of Flint v Kennedy School Dist, 220 Mich 290, 296; 189 NW 1002 (1922), and "subject only to the provisions of the [State] Constitution relating thereto." OAG, 1930-1932, p 495, 496 (March 15, 1932). Local school districts and their officers possess only those powers which statutes expressly, or by reasonably necessary implication, grant to them. Jurva v Attorney General, 419 Mich 209, 214; 351 NW2d 813 (1984); Senghas v L'Anse Creuse Public Schools, 368 Mich 557, 560; 118 NW2d 975 (1962).

Under these authorities, the Legislature is empowered to vest governance authority in the School Reform Board of the Detroit Public Schools (and, subsequently, in the chief executive officer of the board upon his or her appointment) over the adoption of the school district's budget and the determination of the amount of taxes necessary for its general fund and debt retirement fund for delivery to the city for apportionment, assessment, levy and collection.

It is my opinion, therefore, in answer to your first question, that the Legislature may, by statute, reassign a public school district's management authority over its tax millages.

Your second question asks whether the Legislature may, by statute, reassign repayment responsibility on a public school district's loan obligations without giving prior notice to and obtaining a release from the loans' obligees.

Information supplied with your request does not identify the nature or form of the school district's loan obligations or their underlying documents. A review of 1999 PA 10, however, discloses no provisions which reassign repayment responsibilities on loan obligations of the Detroit Public Schools. On the contrary, the Act provides that "the chief executive officer accedes to all the rights, duties, and obligations of the elected school board of the qualifying school district." Section 373(4). (Emphasis added.) Moreover, section 373(5), which authorizes the chief executive officer to terminate certain contracts entered into by the elected school board, provides: "However, this subsection does not allow any termination or diminishment of obligations to pay debt service on legally authorized bonds."

It should also be noted that the Legislature's reorganization of public school districts, including a requirement that the new district pay the outstanding debts of the several former districts, does not impair the obligation of contracts. Attorney General ex rel Kies v Lowery, 131 Mich 639, 92 NW 289 (1902), aff'd 199 US 233, 26 S Ct 27, 50 L Ed 167 (1905).

It is my opinion, therefore, in answer to your second question, that 1999 PA 10 does not reassign payment responsibilities on loan obligations of the Detroit Public Schools.



JENNIFER M. GRANHOLM
Attorney General