Court Opinion

ID: 3490693
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:59:12.80971+00
Date Added: 2024-06-11T14:05:05.152585
License: Public Domain

I cannot agree with the construction given by Mr. Justice WIEST to Act No. 62, § 17, Pub. Acts 1933, as amended by Act No. 30, Pub. Acts 1934 (1st Ex. Sess.) (Comp. Laws Supp. 1935, § 3551-37, Stat. Ann. § 7.77). Section 17 of the amended act provides for an appeal from the county tax allocation board to the State tax commission "in case it shall find a material mistake of fact, fraud or an error of law in the proceedingsunder this act." My Brother limits such "mistake of fact, fraud or an error of law" to such mistakes or fraud "on the part of the county board." It seems clear to me that the act should not be so read or construed. Instead, the express provision is that on appeal review by the State tax commission may be had whenever it finds there has been a mistake of fact or law or fraud "in the proceedings under this act."
The real parties in interest in the millage allocation are the school district, the city, and the county. It is a matter of public, rather than private, concern that the allocation should be just and equitable, so that each governmental unit may properly function. Of necessity the needs and claims of each corporate unit must be presented through its representatives to the county board. This is done by the preparation *Page 59 
and presentation of a budget of the respective units to the county board. Public welfare requires that the preparation of these budgets should be without mistake of fact or law and without fraud; otherwise a just and equitable allocation of the tax mills cannot be accomplished. Wisely and justly the law provides that if "in the proceedings" incident to arriving at the millage allocation by the county board there is a material mistake of fact or law or fraud on the part of any of the agencies concerned in the proceedings before the local board, an aggrieved party may have redress through appeal to the State tax commission.
It is not claimed the State tax commission may substitute its judgment for that of a local board as to what constitutes a fair and just allocation, provided "in the proceedings" before the local board no one of the agencies engaged in presenting and determining the question of allocation has perpetrated a fraud or made a material mistake of fact or law. However, if at the hearing before the local board the representatives of one of the three governmental units through the budget presented or otherwise fraudulently represented to the local board that the cost of that unit's activities during the preceding fiscal year had been twice what it was in fact, and that for the next ensuing fiscal year these representatives believed or the budget represented the reasonable cost of operation would be twice what in fact they knew it would be, and if on such a false and fraudulent showing the local board, being misled and acting in good faith, allocated to such local unit a proportionately larger share of the millage, can it be thought that a fraud would not have been perpetrated "in the proceedings?" And likewise a mistake of fact or of law might readily be made by one of the local units which would result in an unjust *Page 60 
allocation by the local board. It is under such circumstances, as well as in cases of fraud or mistake on the part of the local board, that the legislature intended there should be an appeal to and a review by the State tax commission. The act so provides and it should be so construed.
The test of whether the State tax commission had jurisdiction in the instant case to review the allocation of the local board is whether this record discloses that the State tax commission found a material mistake of fact or law "in the proceedings" before the local board. There is no claim of fraud.
As bearing upon whether the State tax commission found a mistake of fact or of law, or a mistake of fact and law, the record on this appeal discloses the following facts and circumstances. By Act No. 280, Pub. Acts 1939, the welfare activities of this State were reorganized. A State department and county departments of social welfare were created and their activities supplanted those of former State and county welfare agencies which were abolished by the 1939 act. By section 45 of the act, county departments of social welfare were created and provision made for county social welfare boards, the members of which, this section provides, "shall be appointed at the annual October session of supervisors, and they shall qualify * * * and assume their duties * * * not later than November 1, 1939." This section further provides that pending the appointment of such county boards "the present welfare agencies in each county shall carry on relief work as prescribed by the present existing laws until the county board created by this act is established and functioning," but not later than November 1, 1939. The fiscal year of the city of Grand Rapids is from April 1st to and including March 31st. For the fiscal year ending March 31, 1939, the city of Grand Rapids had appropriated and spent $124,979 for *Page 61 
social welfare work, but when it presented its budget at the 1939 meeting of the county board of allocation the city put in its budget an item of only $1,605 for carrying on its social welfare work during the ensuing fiscal year; and this amount seems to have been fixed upon as being merely the expense of services incidental to social welfare work and with no thought of its being an amount sufficient to meet the actual expenditures of the city for social welfare work if that burden was to continue to be upon the city. When it was discovered that the social welfare act recently passed by the legislature provided in substance that "the present welfare agencies in each county shall carry on relief work" until November 1, 1939, it was obvious that this item of the city's budget submitted to the county allocation board was far short of the city's needs.
While the proceeding on appeal to the State tax commission was informal, perhaps too informal, still it does appear that the commission concluded the city had made a "mistake" in presenting this item of its budget to the local board. And the record fully justifies the conclusion that it was in consequence of this that the State tax commission in paragraph 6 in its notice to the local units of its order of reallocation stated:
"That the city of Grand Rapids, in its tentative budget, madeno provisions for certain contributions to the welfare cost, and must have some funds available for works progress administration projects in order to keep men employed; therefore its millage was increased 5/10 of a mill which, in the opinion of the commission, is a fair recognition of the actual necessary costs of the government of the units involved."
From the foregoing, clearly the State tax commission found that the city had made a mistake "in its tentative budget (in that it) made no provisions for *Page 62 
certain contributions to the welfare cost." It is a reasonable and fair inference that the State tax commission concluded that a portion of the increased allocation to the city might well be spent for works progress administration work, thereby lessening the welfare cost. But this is of no consequence, because the State tax board has no power to dictate to a local unit how it should spend its allocated millage. See section 11, subd. (i), of the 1934 act (Act No. 62, § 11, Pub. Acts 1933, as amended by Act No. 30, Pub. Acts 1934 [1st Ex. Sess.] [Comp. Laws Supp. 1935, § 3551-31, Stat. Ann. § 7.71]). The gratuitous suggestion of the State tax commission should not invalidate its reallocation made in consequence of a mistake which it found had been made "in the proceedings" before the local board.
Under the new statutory provision the city of Grand Rapids still had the burden of carrying on its welfare work beyond the period of its previous fiscal year (March 31, 1939), and until November 1, 1939. Through a mistake this item of expenditure was omitted from the city's budget as submitted to the local allocation board; and it was to correct this mistake that the State tax commission ordered a modified allocation between the local units.
For the reason pointed out by Mr. Justice WIEST, the provision in section 17 which purports to bar all judicial review of the proceedings before the State tax commission is void.
Plaintiff failed when obtaining leave to appeal to make the city of Grand Rapids a party defendant in this court. The city was later made a party and permitted to submit amendments to the record of the proceedings had before the State tax commission. Because of the amendments appellant made a motion, now pending before this court, for an order that testimony be taken which it is claimed *Page 63 
would amplify and possibly impeach the amended record now before us as to the proceedings had before the State tax commission. This motion should be denied. Even if appellant is right in its contention, we think the proceedings could be remanded to the State tax commission for correction; but this we deem unnecessary. On certiorari our review is of questions of law only. It is of special importance that there should be strict adherence to this established practice in appeals affecting the levying and collection of taxes because delay in and prolongation of such appeals would seriously impair functioning of governmental agencies.
The State tax commission's order of reallocation is affirmed. This controversy being one of public concern, no costs are awarded.
BUTZEL, C.J., and BUSHNELL and McALLISTER, JJ., concurred with NORTH, J. *Page 64