Mich. Educ. Ass'n v. Sec'y of State

489 Mich. 194

801 N.W.2d 35

191 L.R.R.M. (BNA) 2112

269 Ed. Law Rep. 842

MICHIGAN EDUCATION ASSOCIATION, Petitioner–Appellant,

v.SECRETARY OF STATE, Respondent–Appellee.

Docket No. 137451.Calendar No. 7.

Supreme Court of Michigan.

Argued Nov. 5, 2010.Decided June 30, 2011.

White, Schneider, Young & Chiodini, P.C., Okemos (by Kathleen Corkin Boyle), for petitioner.Bill Schuette, Attorney General, John J. Bursch, Solicitor General, and Heather S. Meingast, Denise C. Barton, and Ann Sherman, Assistant Attorneys General, for respondent.Foster, Swift, Collins & Smith, P.C., Lansing (by Eric E. Doster), for Amicus Curiae Michigan Chamber of Commerce.Sachs Waldman, P.C., Detroit (by Andrew Nickelhoff), for Amici Curiae Michigan State AFL–CIO; SEIU Michigan State Council; and International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America.Patrick J. Wright for Amicus Curiae Mackinac Center for Public Policy.

Opinion

MARKMAN, J.

ON REHEARING

This case returns to this Court on a motion for rehearing. The Michigan Campaign Finance Act (MCFA) prohibits a “public body” from using public resources to make a “contribution or expenditure” for political purposes. MCL 169.257(1). At issue in this case is whether a public school district's administration of a payroll deduction plan that collects and remits political contributions from its employees to the Michigan Education Association's political action committee (MEA–PAC) runs afoul of § 57 of MCFA, MCL 169.257(1). We hold that it does. Through administration of a payroll deduction plan that remits funds to a partisan political action committee, a school district makes both a “contribution,” because public resources are being used to advance the political objectives of the committee, and an “expenditure,” because public “services” and “facilities in assistance of” these same political objectives are being provided. Thus, the school district's payroll deduction plan is prohibited by MCL 169.257. This interpretation is consistent not only with the language of the statute, but also with the evident purpose of § 57, which is to mandate the separation of the government from politics in order to maintain governmental neutrality in elections, preserve fair democratic processes, and prevent taxpayer funds from being used to subsidize partisan political activities. Accordingly, we grant the motion for rehearing, vacate the December 29, 2010, decision of this Court, and affirm the judgment of the Court of Appeals.¹

I. FACTS AND HISTORY

Petitioner, the Michigan Education Association (MEA), is a voluntary, incorporated labor organization that represents approximately 136,000 members employed by public schools, colleges, and universities throughout Michigan. The MEA–PAC is a separate segregated political fund established by the MEA in accordance with § 55 of MCFA, MCL 169.255. The MEA–PAC is significantly funded by payroll deductions of MEA members who have authorized the deductions. The purpose of the MEA–PAC is to facilitate and coordinate the involvement of the MEA in politics by electing candidates favored by the MEA and by furthering the enactment of MEA legislative and executive policy initiatives.

As a public-employee labor organization, the MEA has entered into collective bargaining agreements with various public school districts across the state. Some number of these agreements, including that between the MEA's locally affiliated Kalamazoo County/Gull Lake Education Associations and the Gull Lake Community Schools (the school district), require that a school district administer a payroll deduction plan for the contributions of MEA members to the MEA–PAC. Administration of the payroll deduction plan requires the school district to distribute payroll deduction forms; collect, enter, and monitor the data of participating MEA members; and record, track, and transmit payroll deductions to the MEA–PAC. In return for these services, the MEA has proposed to pay all costs that the school district incurs in administering the plan.

In this case, the school district conditioned acceptance of the collective bargaining agreement on the MEA obtaining a declaratory ruling concerning the validity of the payroll deduction plan. Accordingly, on August 22, 2006, the MEA filed a request for a declaratory ruling with respondent, the Secretary of State, to determine whether the school district could make and transmit payroll deductions to the MEA–PAC.² Respondent ruled that, absent express statutory authority, the school district is prohibited from expending public resources for a payroll deduction plan on behalf of the MEA–PAC. The MEA appealed to the circuit court, which held that respondent's ruling was “arbitrary, capricious and an abuse of discretion,” reasoning that, although the school district's administration of the plan constitutes an “expenditure” under MCFA, when the costs of administering the plan have been reimbursed, “no transfer of money to the MEA–PAC has occurred, and therefore an ‘expenditure’ has not been made within the meaning of the MCFA.”

In a split decision, the Court of Appeals reversed, holding that § 57 of MCFA prohibits a “public body,” such as a school district, from using public resources “to make a contribution or expenditure.” According to the Court, the costs associated with the plan constitute an “expenditure,” and the reimbursement of such costs does not alter that conclusion. Mich. Ed. Ass'n v. Secretary of State, 280 Mich.App. 477, 486, 761 N.W.2d 234 (2008). Judge Whitbeck dissented and would have affirmed the trial court, but on different grounds. He reasoned that the costs incurred by the school district in its administration of the payroll deduction plan do not constitute an “expenditure” as MCFA defines it. Id. at 490, 761 N.W.2d 234. The MEA then sought leave to appeal in this Court. On November 5, 2009, we heard oral arguments on the application,³ and nearly seven months later we granted the MEA's application for leave to appeal.⁴ Finally, on December 29, 2010, a majority of this Court reversed the judgment of the Court of Appeals and held that a school district's administration of a payroll deduction plan that remits funds to the MEA–PAC “is not precluded by any prohibition in MCL 169.257(1) and is therefore permitted.” Mich. Ed. Ass'n v. Secretary of State, 488 Mich. 18, 21, 793 N.W.2d 568 (2010). Respondent moved for rehearing of the Court's December 29, 2010, decision, arguing that the Court committed error by holding that a public school's administration of a payroll deduction plan that remits funds to a partisan political action committee was not prohibited by MCL 169.257(1). We now grant respondent's motion for rehearing, and we vacate the December 29, 2010, decision of this Court, and affirm the judgment of the Court of Appeals.

II. STANDARD OF REVIEW

The interpretation of statutes constitutes a question of law that this Court reviews de novo on appeal. Eggleston v. Bio–Med. Applications of Detroit, Inc., 468 Mich. 29, 32, 658 N.W.2d 139 (2003).

III. PURPOSE OF MCL 169.257

“It is well settled that the Legislature of this state is empowered to enact laws to promote and regulate political campaigns and candidacies.” Council No. 11, AFSCME v. Civil Serv. Comm., 408 Mich. 385, 395, 292 N.W.2d 442 (1980) (citations omitted). The people of Michigan have granted the Legislature broad powers to regulate elections. Among other things, our Constitution empowers the Legislature to set forth the qualifications of electors; the time, place, and manner of elections; and limitations on terms of office. Const. 1963, art. 2, §§ 1 through 10. Furthermore, Const. 1963, art. 2, § 4 requires the Legislature to preserve the integrity of elections, providing in pertinent part:

The legislature shall enact laws to preserve the purity of elections, to preserve the secrecy of the ballot, to guard against abuses of the elective franchise, and to provide for a system of voter registration and absentee voting.

Charged to preserve the “purity of elections” and to “guard against abuses of the elective franchise,” the Legislature enacted MCL 169.257, commonly referred to as § 57 of MCFA. Section 57 prohibits a “public body” from using public resources “to make a contribution or expenditure” for the purpose of influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question. The clear purpose of § 57, as reflected in its language, is to mandate the separation of the government from politics in order to maintain governmental neutrality in elections, preserve fair democratic processes, and prevent taxpayer funds from being used to subsidize partisan political activities.⁵

IV. ANALYSIS

MCL 169.257(1) provides, in pertinent part:

A public body or an individual acting for a public body shall not use or authorize the use of funds, personnel, office space, computer hardware or software, property, stationery, postage, vehicles, equipment, supplies, or other public resources to make a contribution or expenditure or provide volunteer personal services that are excluded from the definition of contribution under [MCL 169.204(3)(a) ].

There is no question that a school district constitutes a “public body” within the meaning of § 57.⁶ Accordingly, the issue in this case is whether by administering a payroll deduction plan that remits funds to a political action committee, a school district makes a “contribution or expenditure” within the meaning of the same provision. If the plan does, it is expressly prohibited.

A. “CONTRIBUTION”

MCL 169.204(1) defines a “contribution” as follows:

“Contribution” means a payment, gift, subscription, assessment, expenditure, contract, payment for services, dues, advance, forbearance, loan, or donation of money or anything of ascertainable monetary value, or a transfer of anything of ascertainable monetary value to a person, made for the purpose of...