MARKMAN, J.
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.
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.
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,
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).
"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,
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.
MCL 169.257(1) provides, in pertinent part:
There is no question that a school district constitutes a "public body" within the meaning of § 57.
MCL 169.204(1) defines a "contribution" as follows:
An "in-kind contribution" is defined as a "contribution . . . other than money." MCL 169.209(3).
The school district's administration of the payroll deduction plan that facilitates payments to the MEA-PAC is prohibited by MCL 169.257(1) because the school district uses its public resources "to make a contribution" in a variety of ways. First, the school district employs public resources to administer the plan that allows MEA members "to make a contribution." For example, the school district must use its paper, pens, and copiers to develop and execute payroll deduction authorization forms; school personnel must collect, enter, and monitor the data of participating MEA members into computers and accounting software, all of which must be specifically configured to record, track, and transmit payroll deductions to the MEA-PAC; school personnel must then be prepared to respond to individual teachers who find it necessary from time to time to adjust or correct or withdraw their own deduction authorizations; and this process must necessarily involve the use of public office space, equipment, and employee time. Use of the school district's resources to facilitate MEA members' "contributions" constitutes a straightforward violation of MCL 169.257(1). More specifically, § 57(1) prohibits the school district from using its resources "to make a contribution." To "make" pertinently means "to cause to exist or happen[.]" Random House Webster's College Dictionary (2000), def 2. The school district "makes" a "contribution" to the MEA-PAC because it "causes to exist or happen" "contributions" from MEA members that otherwise would not be made but for the school district's administration of the payroll deduction plan.
Second, the school district itself makes a prohibited "contribution" to the MEPAC because its administration of the payroll deduction plan constitutes something of "ascertainable monetary value." There is inherent value to the MEA-PAC in having payroll deductions automatically taken from members' wages as opposed to requiring individual solicitations by the MEA-PAC. That there is such "ascertainable monetary value" is self-evident from the very fact that the MEA-PAC has affirmatively sought out the assistance of the school district and has litigated to the highest court of this state an appeal asserting its right to enter into the instant agreement with the school district. Parties do not typically enter into contracts absent a belief that the rights or benefits accorded them under the contract have some "ascertainable monetary value," and the instant contract seems no different. Such value can almost certainly be identified
Third, the administration of the payroll deduction plan also constitutes an "in-kind contribution," defined by MCL 169.209(3) as a "contribution . . . other than money." Although it is clearly possible to quantify the time spent by employees and the resources expended by the school district in administering the deduction plan, and thereby to ascertain the cost of such a "contribution" to the school district, it is more difficult to quantify the intangible benefits that the MEA receives from the deduction plan. However, it is quite certain that these benefits substantially outweigh the costs to the school district, and therefore cannot be calculated simply by reference to the school district's costs. The most significant of these is simply the extent of access to a district's MEA membership that is afforded the MEA-PAC by the deduction plan. Such access avoids any need on the part of the MEA-PAC to establish its own administrative apparatus for political fundraising, vitiates its need to engage in mailings and alternative forms of communications with its members, and dispenses with its burden of having to process checks, money orders, or credit cards from contributors, as would be necessary for any other solicitor of political contributions. As MEA's counsel at oral argument acknowledged, this procedure has proven to be an "effective" means to raise money. Almost certainly, the marginal administrative costs of the payroll deduction plan to the school district, which already may have in place a mechanism by which taxes and charitable contributions can be deducted from employees' paychecks, will be less than the
The services undertaken on behalf of the MEA-PAC are "made for the purpose of influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question," MCL 169.204(1), because, as discussed earlier, the purpose of the MEA-PAC is to facilitate and coordinate the involvement of the MEA in partisan politics.
Section 57 of MCFA also prohibits a "public body" from using public resources to make an "expenditure." MCL 169.257(1). An "expenditure" is defined as
The school district's administration of the payroll deduction plan on behalf of the MEA-PAC constitutes a prohibited "expenditure" because the school district directly provides "services" and "facilities in assistance of" the MEA-PAC. The school district provides "services" to the MEA-PAC in its administration of the deduction plan by developing and executing payroll deduction authorization forms; by collecting, entering, and monitoring the data of MEA members into computers and accounting software, all of which must be configured to record, track, and transmit payroll deductions to the MEA-PAC; and by accommodating individual teachers who find it necessary from time to time to adjust or correct or withdraw their deduction authorizations. Further, the school district provides "facilities in assistance of" the MEA-PAC through the use of public office space and equipment. These "services" and "facilities in assistance of" the MEA-PAC are, once again, made for the purpose of "the nomination or election of a candidate, or the qualification, passage, or defeat of a ballot question," MCL 169.206(1), because, as discussed previously, 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 enacting MEA legislative and policy initiatives. Thus, the school district's administration of the payroll deduction plan constitutes an "expenditure" as that term is defined by MCL 169.206(1) and is specifically prohibited.
Justice HATHAWAY concedes that the school district's administration of the deduction plan "falls within the general definition of `expenditure' under MCL 169.206(1). . . ." Post at 68. However, she would hold, as would Justice CAVANAGH, that the plan also falls within a specific statutory exclusion from the definition of an "expenditure." This exception provides that an "expenditure" does not include "[a]n expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee." MCL 169.206(2)(c). According to Justice HATHAWAY, a school district's administration of a payroll deduction plan that remits payments to a political action committee constitutes an "`expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee'" and is, therefore, allowed under § 57. Post at 69, quoting MCL 169.206(2)(c). However, her analysis overlooks the fact that a "public body," such as a school district, is not authorized to establish a separate segregated fund under MCFA and, therefore, may not rely on the § 6(2)(c) exclusion.
Instead, this exclusion is clearly designed to apply only to corporations and labor organizations that possess the authority to create, establish, administer, or fund separate segregated funds in the first place. This interpretation, limiting the § 6(2)(c) exclusion to corporations and labor organizations, is a necessary implication from the structure of MCFA for three reasons. First, § 54 of MCFA, MCL 169.254, imposes the same rule, prohibiting the making of a "contribution or expenditure," on corporations and labor organizations that § 57 imposes on public bodies. In pertinent part, § 54 provides:
Second, unlike § 57, § 54 does not constitute an absolute prohibition against making a "contribution or expenditure"; rather, pursuant to § 55,
Third, there is no similar counterpart in § 57 that allows a "public body" to make "an expenditure for the establishment and administration and solicitation of contributions to a separate segregated fund. . . ." Thus, under § 55, the only entities allowed to establish a separate segregated fund are corporations, joint stock companies, domestic dependent sovereigns, or labor organizations, such as the MEA. Considered together, § 55 and the § 6(2)(c) exclusion that permits an "expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund" provide a limited mechanism allowing entities such as the MEA to create, establish, administer, or fund a separate segregated fund for purposes that would otherwise be disallowed by § 54. In contrast, a "public body," such as a school district, is not entitled to create, establish, administer, or fund a separate segregated fund, under § 55 or any other provision, and thus may not rely on the § 6(2)(c) exclusion from the definition of an "expenditure."
Justice HATHAWAY thus concludes that the administration of a payroll deduction plan falls "squarely within the statutory exception." Under MCL 169.206(2)(c), an "expenditure" does not encompass what would otherwise be an "expenditure" for (a) establishment of a separate segregated fund or independent committee, (b) administration of a separate segregated fund or independent committee, or (c) solicitation of contributions to a separate segregated fund or independent committee. Thus, in order to fall within the purview of this exception, a "public body" must be engaged in one of these enumerated activities. In this case, however, the school district is engaged in none.
Second, the school district is not making an "expenditure" for the administration of a separate segregated fund or independent committee because the school district is not "administering" the MEA-PAC; rather, the school district is simply administering the payroll deduction plan that remits funds to the MEA-PAC. That is, the school district makes no determinations at all concerning amounts of funds to be raised from MEA members or other funding sources; the nature and substance of communications to MEA members and other funding sources about the need and urgency of such contributions; the identification of political candidates and causes as beneficiaries of the MEA-PAC, and in what amounts; or strategies for optimizing the impact of MEA-PAC participation in political campaigns and causes. Justice HATHAWAY, however, would hold that the plain language of the statute dictates that the administration costs at issue are excluded from the statutory term "expenditure." See post at 68-69. In so asserting, Justice HATHAWAY misinterprets the statute, because the only administrative costs that are excluded under this exclusion are those associated with administering a "separate segregated fund or independent committee." MCL 169.206(2)(c). That the school district is administering a process by which payments are remitted to such a fund is hardly the equivalent of administering the fund itself, such that the § 6(2)(c) exclusion would apply. Justice HATHAWAY is confused in this regard.
Third, the school district is not making an "expenditure" for the solicitation of contributions to a separate segregated fund or independent committee; rather, the school district is using public resources for processing payments to the MEA-PAC. As discussed earlier, the school district's "expenditure" consists of the use of personnel, office space, computers, software, and other public resources to remit payments to the MEA-PAC. The school
Having determined that the school district's administration of the payroll deduction plan that remits payments to the MEA-PAC constitutes both a "contribution" and an "expenditure," the question remains whether the MEA's preparedness to pay in advance the school district's costs associated with the plan remedies what would otherwise constitute a violation of § 57. For the reasons that follow, it does not.
The Court of Appeals correctly held that there is "nothing in the plain language of the MCFA that indicates reimbursement negates something that otherwise constitutes an expenditure." Mich. Ed. Ass'n, 280 Mich.App. at 486, 761 N.W.2d 234. A court's primary purpose in interpreting a statute is to ascertain and effectuate legislative intent. Frankenmuth Mut. Ins. Co. v. Marlette Homes, Inc., 456 Mich. 511, 515, 573 N.W.2d 611 (1998). "Courts may not speculate regarding legislative intent beyond the words expressed in a statute. Hence, nothing may be read into a statute that is not within the manifest intent of the Legislature as derived from the act itself." Omne Fin., Inc. v. Shacks, Inc., 460 Mich. 305, 311, 596 N.W.2d 591 (1999) (citations omitted). The Legislature declined to provide that advance payments remedy what would otherwise constitute a violation of § 57.
The suggestion that advance payments remedy a violation of § 57 is belied by the terms of the statute. Section 57 provides that "[a] public body . . . shall not use or authorize the use" of public resources to make a "contribution or expenditure. . . ." MCL 169.257(1) (emphasis added). The use of "shall" in a statute generally "indicates a mandatory and imperative directive." Burton v. Reed City Hosp. Corp., 471 Mich. 745, 752, 691 N.W.2d 424 (2005) (citations omitted). As such, the statute mandates that the school district not "use or authorize the use of" its public resources to make a "contribution" or an "expenditure." Nothing in MCFA leads to the conclusion that the Legislature intended § 57 to be interpreted any differently. Irrespective of whether the school district is reimbursed for its administration of the payroll deduction plan, the school district nonetheless has employed public resources to make a "contribution or expenditure" for political purposes.
Furthermore, the unquantifiable cost to the school district, as well as to taxpayers, parents, and students, of having time and resources diverted from the school district's primary responsibilities of administering schools and educating students in order to administer a process of raising political contributions for the MEA-PAC cannot simply be paid in advance or reimbursed. Time is a zero-sum resource, and it is irretrievably lost to taxpayers, parents, and students when it is taken away from the former responsibilities and redirected to the latter responsibilities. If some lesser portion of each day is devoted to the interests of the school district and a greater portion of each day is devoted to the partisan political interests of a labor organization, taxpayers, parents, and students suffer. Although advance payment may recompense the school district its employees' salaries for the time spent on administration of the plan and for the use of supplies and other public resources, monetary reimbursement, paid in advance or otherwise, is simply insufficient to recover the time that is diverted from the primary obligations of the school district.
Moreover, because neither advance payments nor reimbursements prevent the prohibited "use" of public resources from occurring in the first place, the act is punishable as a misdemeanor and subject to a fine that may be "equal to the amount of the improper contribution or expenditure." MCL 169.257(2)(b). The fact that one of the penalties for making an improper "contribution or expenditure" requires the violator to pay an amount that is "equal to the amount of the improper contribution or expenditure" indicates strongly that such a payment, whether in the form of a "penalty" or a "reimbursement," does not transform an improper "contribution or expenditure" into a proper one. Had the Legislature intended otherwise, the misdemeanor statute would more likely have read that the criminal sanction to be paid is "equal to the amount of the improper contribution or expenditure, less any reimbursement of such contribution or expenditure."
As discussed previously, Justice HATHAWAY'S position that the school district's administration of a payroll deduction plan is not an "expenditure" because the cost of administration is an "expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee," MCL 169.206(2)(c)—an enumerated exception to the statutory definition of "expenditure"—lacks merit for two reasons. First, a school district's administration of a payroll deduction plan is not excluded from the definition of an "expenditure" under that section because a "public body," such as a school district, is not authorized to create a separate segregated fund under MCFA and, therefore, may not rely on the § 6(2)(c) exclusion from the definition of an "expenditure." Second, even if a "public body" is entitled to rely on this exclusion, the school district's administration of the payroll deduction plan does not fall within the statutory exception because the school district's "expenditure" cannot be characterized as "[a]n expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee." As also previously discussed, the school district's administration of the payroll deduction system is a prohibited "contribution." However, Justice HATHAWAY reasons that the school district's administration of the payroll deduction plan does not constitute a "contribution." This latter aspect of her opinion warrants further discussion.
(a) In circular fashion, Justice HATHAWAY would hold that the definition of "contribution" encompasses the term "expenditure" and, thus, because the school district's administration of the payroll deduction plan does not constitute an "expenditure," it also cannot be a "contribution." Justice HATHAWAY then states that "[t]he only other way that the administration of the system could be a `contribution' under the MCFA would be if administering the system resulted in a `transfer of anything of ascertainable monetary value. . . .'" Post at 70. This assertion is erroneous. As discussed earlier, an "in-kind contribution," which is a "contribution . . . other than money," also constitutes a "contribution." MCL 169.209(3). Similarly, MCFA defines as a "contribution" a "payment." MCL 169.204(1). The school district arguably makes a "payment" to the MEA-PAC when it transfers money from participating MEA members to the
(b) Justice HATHAWAY further errs, in our judgment, as did the former majority opinion, by concluding that her interpretation is necessary to avoid absurd results. In discussing whether the administration of the payroll deduction plan constitutes a "transfer of anything of ascertainable monetary value" and thus a "contribution," Justice HATHAWAY states:
By emphasizing that her interpretation is necessary to avoid "absurd results," Justice HATHAWAY appears to concede that the more natural interpretation of the law is that asserted by this majority opinion. Resort to an "absurd results" analysis is generally necessary only to avoid an interpretation that would otherwise flow from a statute by the application of traditional principles of interpretation.
In essence, Justice HATHAWAY believes that it is necessary to read MCL 169.204(1) as if it referred to a "net transfer of anything of ascertainable monetary value," which it does not, in order to avoid the allegedly "absurd result" to which our interpretation of MCL 169.204(1) would lead. What is this allegedly "absurd result"? What is this result that is "quite impossible that [the Legislature] could have intended"? Pub. Citizen v. United States Dep't of Justice, 491 U.S. 440, 471, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989) (Kennedy, J., concurring). What is this result that is "unthinkable" or "bizarre"?
(c) The former majority opinion also erred when it concluded that MCL 408.477 of the wages and fringe benefits act provides authority for the school district to administer the payroll deduction plan.
While MCL 408.477 of the wages and fringe benefits act refers to payroll deductions, it does not authorize school districts to administer payroll deductions for political action committees. MCL 408.477(1) provides in full:
From this provision, the former majority opinion summarily concluded that, "under the plain language of MCL 408.477, public bodies have the authority to administer a payroll deduction plan that contributes money to the MEA-PAC if the MEA enters into a collective bargaining agreement that expressly permits the deductions." Mich. Ed. Ass'n, 488 Mich, at 38 n. 29, 793 N.W.2d 568. This is another example of the former majority opinion's misinterpretation of a statute. MCL 408.477 has absolutely nothing to do with whether a "public body" may administer a payroll deduction plan for the benefit of the MEA-PAC. Rather, the statute describes the approval required for an employer to deduct a portion of an employee's wages and states that in order to deduct wages from an employee, the employer must obtain the employee's voluntary consent. The statute also provides that such consent is not required when the wage deduction is expressly permitted by law or by a collective-bargaining agreement. The most that can be discerned from this statute as it pertains to the instant case is that, if the school district is to deduct wages from its employees, it must obtain the employees' voluntary consent unless the deduction is expressly permitted by law or a collective-bargaining agreement. However, neither MCL 408.477 nor any other statute provides authority for a "public body" to administer a payroll deduction plan that contributes money to a political action committee. Therefore, even if the school district's administration of a payroll deduction plan did not constitute a "contribution" or an "expenditure," which it clearly does, the school district would still lack the authority to administer such a plan because no statute gives the school district this authority and the school district only has the authority granted to it by statute. Indeed, as explained earlier, the Legislature has affirmatively and expressly forbidden a school district, or any other public body, from making a "contribution or expenditure" to a political action committee.
The dissenting justices assert, explicitly or implicitly, that this opinion undoes their opinion of December 29, 2010, upon rehearing
First, contrary to Justice HATHAWAY'S assertion, we respectfully disagree that the previous majority opinion "followed the language of the law." Post at 66. Indeed, we believe that opinion to have interpreted MCFA in a manner that bore little resemblance to its actual language. The previous majority opinion (a) effectively inserted words into the law that are absent from the law, e.g., construing the "transfer of anything of ascertainable monetary value," to require that there be a "transfer of anything of net ascertainable monetary value," see Mich. Ed. Ass'n, 488 Mich, at 36, 793 N.W.2d 568, (b) effectively altered words in the law, e.g., substituting for "ascertainable monetary value" "ascertained" monetary value, id. at 37, 793 N.W.2d 568, (c) applied the facts to the law in an implausible fashion, e.g., asserting that the administration of the payroll deduction plan was not done for the "`purpose of influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question,'" id., quoting MCL 169.204(1), (d) mischaracterized the facts, e.g., asserting that the administration of the payroll deduction plan by the school constituted no "transfer of ascertainable monetary value" to the MEA-PAC but "merely allow[ed] someone else to make a contribution," Mich. Ed. Ass'n, 488 Mich. at 37, 793 N.W.2d 568, (e) failed to analyze relevant and determinative provisions of the law, e.g., the definition of an "in-kind contribution," (f) paraphrased the law in an imprecise manner, e.g., summarizing an exception to the law's broad prohibition that is applicable to the administration of a separate segregated fund or independent committee as one applicable to the administration of contributions, id. at 29-30, 793 N.W.2d 568, and (g) overlooked words of the law, e.g., asserting that because the administration of the payroll deduction plan does not constitute an "expenditure," the "only other way" that it could constitute a "`contribution'" would be if a "`transfer of anything of ascertainable monetary value'" resulted, id. at 34, 793 N.W.2d 568, quoting MCL 169.204(1), despite the fact that MCFA defines a "contribution" in other ways to include "a payment" or an "in-kind contribution."
Second, while the dissenting opinions make light of the fact that we supposedly have little justification for this new opinion other than the views expressed in the dissent from the original opinion, we believe that such a justification is actually rather compelling. That is, we believe that the previous dissent was in accordance with the language and intent of MCFA, while the previous majority opinion was not,
Finally, we believe that the former majority's remarkable treatment of this case itself constitutes grounds for granting rehearing. This case was alternately subject to unprecedentedly dilatory treatment and unprecedentedly accelerated treatment. See Mich. Ed. Ass'n, 488 Mich, at 64-68, 793 N.W.2d 568 (MARKMAN, J., dissenting). Before this case was heard in November of last year, it was subject to the lengthiest delay, by far, of any of the 280 cases considered under the procedures of MCR 7.302(H)(1), which authorize this Court to order oral argument before deciding whether to grant leave to appeal. See also n. 4 of this opinion. Subsequently, after finally granting leave to appeal and hearing oral arguments, a majority opinion was prepared in near-record time, the period for dissenting justices to respond to this opinion was substantially shortened, and, in December, these opinions issued in what approached, if not exceeded, record time for a major decision of this Court.
MCL 169.257 prohibits a "public body" from using public resources to make a "contribution or expenditure" for political purposes. Through administration of the payroll deduction plan in this case, remitting payments to the MEA-PAC, the school district makes both a "contribution" and an "expenditure" as defined by MCFA. The MEA-PAC's offer to reimburse the school district for expenses incurred in its administration of the plan does not remedy an otherwise clear violation of MCL 169.257. This interpretation is consistent not only with the language of the statute, but also with the evident purpose of MCL 169.257, 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. The payroll deduction plan in this case is inconsistent with this legislative purpose and inconsistent
ROBERT P. YOUNG, JR., MARY BETH KELLY and BRIAN K. ZAHRA, JJ., concur.
MARY BETH KELLY, J. (concurring).
I concur in Justice MARKMAN'S opinion granting the motion for rehearing, vacating this Court's opinion of December 29, 2010, and affirming the Court of Appeals' judgment of August 28, 2008. I write separately to emphasize, once again, that granting a rehearing motion is not limited to cases in which new legal arguments were presented to the Court and to clarify that this is not a case in which it can fairly be said that "precedent" has been disturbed.
As Justice ZAHRA recently explained in detail in Anglers of the AuSable, Inc. v. Dep't of Environmental Quality,
I also share the view articulated by Justice ZAHRA in Anglers that in addition to considering whether the matter was previously decided correctly under the governing legal principles, the jurisprudential significance of the legal issues presented should also be considered when deciding a motion for rehearing.
In this case I agree, first, with the legal analysis of the provisions of the Michigan Campaign Finance Act (MCFA)
Notably, the grant of the rehearing motion, which was timely filed, asked the Court to rehear a case that was decided several days before I was sworn in and after the case had pended for more than two years in our Court.
In sum, rehearing was warranted in this case because, in my view, the MCFA plainly requires holding that the public school district's administration of the payroll deduction plan is both an "expenditure" and a "contribution" that violates the act and the issue was both properly before the Court for rehearing and a matter of substantial jurisprudential significance to our state.
BRIAN K. ZAHRA, J., concurs.
MICHAEL F. CAVANAGH, J. (dissenting).
I disagree with the current majority's decision to grant respondent's motion for rehearing and vacate this Court's December 29, 2010, majority opinion. Mich. Ed. Ass'n v. Secretary of State, 488 Mich. 18, 793 N.W.2d 568 (2010).
The proper interpretation of a statute is a legal question that this Court reviews de novo. Herman v. Berrien Co., 481 Mich. 352, 358, 750 N.W.2d 570 (2008).
The MCFA's general rule regarding prohibited "contributions" and "expenditures" is provided in MCL 169.254(1), which states in relevant part:
Thus, according to the plain language of MCL 169.254(1), MCL 169.255 is an exception to the general rule in MCL 169.254(1). That exception states, in relevant part:
Finally, MCL 169.257(1) specifically addresses how the MCFA applies to "public bodies," which includes school districts,
Thus, under MCL 169.254(1) and MCL 169.257(1), private entities and "public bodies" are barred from making "contributions" and "expenditures" unless an exception applies. The MCFA provides detailed definitions of "contribution" and "expenditure"; therefore, in order to properly apply the relevant portions of the MCFA to the facts of this case, it is necessary to closely consider those statutory definitions to fully understand what constitutes a prohibited "contribution" and "expenditure" as defined in the MCFA.
The MCFA defines "contribution" in MCL 169.204(1), which states:
This statutory definition can be divided into two portions: (1) a list of actions that could constitute a "contribution," i.e., "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," and (2) the purpose for which the actions must be taken in order to constitute a "contribution," i.e., "for the purpose of influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question." Stated another way, the statutory definition requires a court to determine (1) whether a party's conduct falls within the list of actions provided and, if so, (2) the purpose for that action.
As the majority insists, the list of actions provided in the first portion of the definition of "contribution" arguably could include the school district's administration of the payroll deduction plan. But even accepting arguendo the majority's conclusion that the administration of the plan represents "a transfer of [something] of ascertainable monetary value" to the MEA's political action committee (MEA-PAC), the question remains whether the school district administers the plan "for the purpose of influencing the nomination
As the previous majority opinion in this case explained,
The majority attempts to counter the previous majority's explanation of the plain meaning of the MCFA's definition of "contribution" by first claiming that the school district makes a "contribution" because, by administering the payroll deduction plan, it "provid[es] valuable services to the MEA-PAC in aid and furtherance of its political activities." Ante at 43 n. 12. This analysis, however, impermissibly strays from the statutory language because it focuses on the arguable result of the school district's administration of the plan rather than the school district's purpose in administering the plan, as the statute requires. The fact that, at some remote time in the future, the school district's administration of the payroll deduction plan eventually results in the furtherance of the MEA's political activities does not necessarily make the school district's actions a "contribution" as defined in MCL 169.204(1). Rather, the administration of the payroll deduction plan is only a "contribution" if, at the time the school district performs the service, it does so "for the purpose" of influencing an election.
Second, the majority argues that, in considering the school district's administration of the payroll deduction plan under MCL 169.204(1), the focus should not be on whether the school district is attempting to influence a political race, but whether the payment that it provides is intended for that purpose. While the majority is correct to focus on the "payment," the majority confuses the two payments at issue in this case: the MEA member's "payment" in the form of money deducted from his or her paycheck and the school district's arguable "payment" in the form of administering the payroll deduction plan that transfers the employee's donation to the MEA-PAC.
In order to determine the school district's "purpose," one must first define the word and then apply that definition to the facts of this case. The MCFA does not define "purpose"; therefore, it is proper to consult a dictionary to assist the Court in determining the word's common meaning. McCormick v. Carrier, 487 Mich. 180, 195, 795 N.W.2d 517 (2010); see, also, MCL 8.3a. "Purpose" is defined as "[a] result or effect that is intended or desired; intention.'" The American Heritage Dictionary, Second College Edition (1982), def 2 (emphasis added). Thus, in order to determine the school district's purpose for administering the payroll deduction plan, one must consider the school district's intent. "Intent," in turn, is defined as "[t]he state of mind operative at the time of an action. . . . [h]aving the mind fastened upon some purpose." Id., defs 2 and 3. Similarly, "intention" is defined as "[a] plan of action; design" and "[a]n aim that guides action. . . ." Id., defs 1 and 2. In light of these definitions, in order to determine the school district's purpose as it relates to the statutory definition of "contribution," one must determine the school district's "aim that guides [its] action" and the "state of mind operative" when the school district administers the payroll deduction plan.
As the majority notes, the school district and the MEA entered into a collectivebargaining agreement, part of which required the school district to administer the payroll deduction plan at issue in this case. Because the school district is required by contract to administer the payroll deduction plan, the school district's purpose in administering the plan is to satisfy its bargained-for contractual duties. The school district's purpose was not to "influenc[e] the nomination or election of a candidate" or "the qualification, passage, or defeat of a ballot question." MCL 169.204(1). Therefore, although the school district's administration of the payroll deduction plan may, in some tangential or remote sense, eventually influence an election, that was not the school district's purpose. Consequently, the school district's administration of the payroll deduction plan is not a "contribution" as defined by the MCFA.
The majority also attempts to support its "contribution" analysis with a quotation from MCL 169.270.
Furthermore, by claiming that the school district exceeds its inferential contribution limit of zero when it administers the payroll deduction plan, the majority once again improperly imputes to the school district the MEA member's purpose for making the contribution. As this opinion explains, an act is not a "contribution" as defined in MCL 169.204(1) unless the act is performed for the specific purpose of "influencing the nomination or election of a candidate, or for the qualification, passage, or defeat of a ballot question." Because the school district's administration of the payroll deduction plan is not performed for that purpose, the school district does not make a "contribution" and, thus, does not exceed any arguably applicable contribution limit.
Finally, the majority questions the school district's authority to administer the payroll deduction plan at issue in this case. However, this concern is misplaced because school districts, by statute, have the authority to enter into collective-bargaining agreements, MCL 423.209,
Although the school district's administration of the payroll deduction plan is not a prohibited "contribution," it could nevertheless be barred under MCL 169.257 if it meets the statutory definition of "expenditure." Therefore, that definition must also be examined in the context of this case. The MCFA defines "expenditure" in MCL 169.206(1), which states, in relevant part:
The MCFA, however, also expressly excludes some conduct that would otherwise meet its general definition of "expenditure." Notably, MCL 169.206(2) states, in relevant part:
The majority argues that the school district's administration of the payroll deduction plan is barred by the MCFA because it is an "expenditure" under the general definition in MCL 169.206(1) and the exclusion in MCL 169.206(2)(c) does not apply to public bodies. The majority concludes that the "exclusion is clearly designed to apply only to corporations and labor organizations that possess the authority to create, establish, administer, or fund separate segregated funds in the first place." Ante at 44. Furthermore, the majority claims that MCL 169.257 and MCL 169.254 apply to public bodies and private entities respectively the same general rule barring "expenditures," but, because MCL 169.257 does not refer to the exception in MCL 169.255 permitting some types of "expenditures," MCL 169.257 represents an "absolute prohibition" against expenditures by public bodies. I disagree with the majority's analysis.
To begin with, contrary to the majority's suggestion, neither the general definition
Likewise, nothing in MCL 169.257 supports the majority's conclusion that the exclusion in MCL 169.206(2)(c) from the definition of "expenditure" does not apply to public bodies. While the majority is correct that the exceptions in MCL 169.255 do not apply to public bodies, that fact does not support the majority's conclusion that the exclusion in MCL 169.206(2)(c) also does not apply with equal force to public bodies. In fact, the majority's claim that this exclusion is "plainly directed toward elaborating on [MCL 169.255] by making clear that no expenditures authorized by [MCL 169.255] for the establishment of a separate segregated fund will be treated as a prohibited expenditure," ante at 45 n. 13, leaves no distinction between the two statutes. Therefore, if the majority were correct that MCL 169.206(2)(c) does not apply to public bodies, MCL 169.206(2)(c) is completely unnecessary because, under the majority's interpretation, it says the exact same thing as MCL 169.255. The majority's efforts to read these two statutes "harmonious[ly]" are strained and renders MCL 169.206(2)(c) superfluous. I decline to adopt such an interpretation because the result is impermissible under the rules of statutory interpretation. People v. McGraw, 484 Mich. 120, 126, 771 N.W.2d 655 (2009) ("In interpreting a statute, we avoid a construction that would render part of the statute surplusage or nugatory.").
Rather, I believe that MCL 169.257 explains that public bodies are not to make "expenditures" as defined in MCL 169.206(1), but if the school district's administration of the payroll deduction plan satisfies the exclusion from the definition of "expenditure" found in MCL 169.206(2)(c) administration of the plan is not an "expenditure," and the plan does not violate MCL 169.257. Thus, in a sense, the majority is correct that MCL 169.257 creates an "absolute prohibition" against expenditures by public bodies, but the majority misses the boat when it concludes that this "absolute prohibition" bars the school district's administration of the payroll deduction plan at issue in this case. Because the school district's administration of the plan is excluded from the definition of "expenditure," there is simply no "expenditure" to prohibit.
The majority's erroneous analysis further results from its insistence that the exclusion in MCL 169.206(2)(c) only applies to expenditures for the establishment or administration of a separate segregated fund. This interpretation of MCL 169.206(2)(c) is misguided because the statutory exclusion focuses on expenditures associated with contributions to a separate segregated fund, not expenditures associated
Specifically, MCL 169.206(2)(c) provides that an "expenditure" does not include "[a]n expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund. . . ." The majority errs because it replaces "to" with "of" and ignores the word "contributions" when considering "establishment" and "administration" as used in MCL 169.206(2)(c). Stated another way, the majority's analysis rewrites the statute as follows: "`[e]xpenditure' does not include. . . [a]n expenditure for the establishment or administration of a separate segregated fund or solicitation of contributions to a separate segregated fund. . . ." Therefore, the majority's interpretation impermissibly adds words to the statute. See Hiltz v. Phil's Quality Market, 417 Mich. 335, 347, 337 N.W.2d 237 (1983). Indeed, the majority opinion expressly states that "the school district is not making an `expenditure' for the administration of a separate segregated fund . . . because . . . the school district is simply administering the payroll deduction plan. . . ." Ante at 47 (emphasis altered); see, also, ante at 47 (claiming that MCL 169.206[2][c] supports the majority's conclusion that "the only administrative costs that are excluded under this exclusion are those associated with administering a `separate segregated fund or independent committee'"). By its own words, the majority displays its need to impermissibly change the language of the statute in order to support its holding.
Thus, although I agree with the majority that the school district is not making an "expenditure" for the administration of a separate segregated fund, that point is irrelevant because that is not what the statutory exclusion requires. Rather, by administering contributions to a separate segregated fund, the school district's conduct falls squarely within the statutory exclusion from the general definition of "expenditure."
Finally, the majority supports its interpretation of the MCFA by claiming that the purpose of MCL 169.257 "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," ante at 66, and only its analysis is consistent with that purpose. To begin with, the majority's soaring rhetoric could easily be classified as nothing more than an impassioned plea
Focusing instead on the statutory language alone, it is clear that the purpose of MCL 169.257 is simply to prevent a public body from using its resources "to make a contribution or expenditure" as those words are defined in MCL 169.204 and MCL 169.206, respectively. The majority fails to realize that my interpretation of the MCFA is consistent with the true purpose of MCL 169.257 as determined from the language of that provision because the school district's administration of the payroll deduction plan at issue in this case is neither a "contribution" nor an "expenditure."
In my view, the school district's administration of the payroll deduction plan does not violate the MCFA because it is neither a "contribution" nor an "expenditure" under the statutory definitions of those terms. Because the majority's substantive analysis in this case is the product of its erroneous interpretation of the statutory provisions at issue, I respectfully dissent.
MARILYN J. KELLY, J., concurs.
HATHAWAY, J. (dissenting).
I dissent from the majority's decision to vacate this Court's December 29, 2010, opinion because nothing in the plain language of MCL 169.257(1) prohibits a school district from administering a payroll deduction system that allows Michigan Education Association (MEA) members to automatically send contributions to the MEA's political action committee (MEA-PAC).
At issue is whether § 57 of the Michigan Campaign Finance Act (MCFA), MCL 169.257(1),
Section 57 of the MCFA provides in pertinent part:
The clear language of § 57(1) specifically prohibits a public body from using, or authorizing the use of, public resources to do three things: (1) make an expenditure, (2) make a contribution, or (3) provide volunteer services that are excluded from the definition of "contribution" under MCL 169.204(3)(a). The plain language of the statute does not prohibit any other activity. Therefore, if the administration of the payroll deduction system is not tantamount to doing one of these three things, the administration of the system is permissible under Michigan law.
The first issue is whether a public school's administration of a payroll deduction system that remits funds to the MEA-PAC is an impermissible "expenditure" under § 57. "Expenditure" is specifically defined in the MCFA. The definition of "expenditure" is set forth in MCL 169.206, which provides in pertinent part:
The definition of "expenditure" is expansive. It includes a payment, donation, loan, or promise of payment of money or anything of ascertainable monetary value for goods, materials, services, or facilities in assistance of, or in opposition to, the nomination or election of a candidate, or the qualification, passage, or defeat of a ballot question. The definition also includes a contribution or a transfer of anything of ascertainable monetary value for purposes of influencing the nomination or election of a candidate or the qualification, passage, or defeat of a ballot question. However, MCL 169.206(2) also expressly excludes items from being classified as expenditures even though they may qualify under the general definition outlined in MCL 169.206(1). Notably, any "expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee" is specifically excluded from the definition of "expenditure" by MCL 169.206(2)(c).
Turning to the facts of this case, the administration of a payroll deduction system does arguably provide services to the MEA and the MEA-PAC in facilitating payroll deductions from members by providing personnel and computer services. The system allows MEA members to authorize the school to automatically deduct money from their paychecks and remit the funds to the MEA-PAC. The MEA-PAC is a separate segregated fund under MCL 169.255 because it has been established by the MEA, a labor organization, to make contributions to and expenditures on behalf of candidate committees, ballot question committees, political party committees, political committees, and independent committees.
The majority erroneously asserts that the school district's administration of a payroll deduction system is not an "administration. . . of contributions to a separate segregated fund or independent committee"
In sum, administration of a payroll deduction system is an "expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund or independent committee" and thus falls within an enumerated exception to the statutory definition of "expenditure." Therefore, the administration of the payroll deduction system is not an "expenditure" as defined by the MCFA and is not prohibited by § 57 on that ground.
The next issue is whether administration of the payroll deduction system is an impermissible "contribution" under the MCFA. "Contribution," like "expenditure," is specifically defined by the MCFA. The definition of "contribution" under the MCFA is set forth in MCL 169.204, which provides:
The definition of "contribution" includes the term "expenditure." Because "expenditure" is explicitly defined by the MCFA, the statutory definition controls.
The majority argues that the actual and intangible costs associated with the administration of a payroll deduction system constitute a contribution because there is a transfer of something of ascertainable monetary value from the school district to the MEA-PAC and the transfer, although made pursuant to a collective bargaining agreement, is made for the purpose of influencing the nomination or election of a candidate or for the qualification, passage, or defeat of a ballot question. The majority asserts that the resources expended to administer the payroll deduction system have an ascertainable monetary value, and the fact that they are expended for the benefit of the MEA-PAC conveys value to the MEA-PAC. The majority further argues that prepayment for the services does not negate the transfer because MEA-PAC still receives the benefit of the services.
I disagree with this interpretation of the word "transfer" in the statute. Because "transfer" is a nontechnical word that is not defined within the statute, the proper course of action is to first look to the plain meaning of the term to ascertain what the Legislature intended by using "transfer" to define a "contribution."
There are two possible interpretations of the word "transfer" in the statute. The first interpretation would require that any conveyance of value for services provided to a campaign, regardless of whether the services are paid for, would constitute a contribution. The second would require a net conveyance of value in order to be a "transfer of anything of ascertainable monetary value." I believe that the latter is the only logical interpretation. Any other interpretation of "contribution" would lead to an absurd result, and statutes must be
Furthermore, my conclusion that a "contribution" under MCL 169.204(1) requires a net transfer of value comports with the remainder of that section, which specifically excludes from the statutory definition of "contribution" any "contribution if expressly and unconditionally rejected, returned, or refunded in whole or in part within 30 business days after receipt." MCL 169.204(3)(c). In other words, if the contribution is rejected, returned, or refunded, it is no longer a "contribution" under the MCFA. Moreover, MCL 169.204(2) explains that a "contribution" includes "the granting of discounts or rebates not available to the general public. . . ." This implies that when an entity provides products or services at full price, the entity is not making a contribution. Thus, the statute clearly requires that there be a net transfer of value in order for there to be a contribution under the MCFA.
The majority erroneously asserts that the payroll deduction system constitutes something of "ascertainable monetary value" because there is inherent value to the MEA-PAC in having payroll deductions automatically taken from members' wages as opposed to requiring individual solicitations by the MEA-PAC. This argument ignores the plain definition of the term "ascertainable." "Ascertainable" is also a nontechnical word that is not defined within the statute, so we must look to the ordinary meaning of the word to discern what the Legislature intended. "Ascertain" is defined as "to find out definitely; learn with certainty or assurance."
In this instance, the MEA plans to prepay the school district for all ascertainable costs—those which are definitely and certainly identified—associated with the administration of a payroll deduction system,
The majority also erroneously asserts that the payroll deduction system constitutes an "in-kind contribution" under MCL 169.209(3) as a "contribution . . . other than money." Again, the majority identifies the hypothetical intangible benefits that the administration of a payroll deduction system confers on the MEA as the impermissible contributions. However, this argument ignores that an in-kind contribution must still be a "contribution" as defined by the statute. The hypothetical intangible benefits are not contributions because, as discussed, they do not have an ascertainable monetary value. The MEA contemplates prepaying all costs associated with the administration of the deduction system that can be ascertained. Accordingly, there is no contribution under the MCFA, and a public school's administration of a payroll deduction system is not prohibited by § 57 on that ground.
The final issue is whether the administration of the system in question impermissibly "provide[s] volunteer personal services that are excluded from the definition of contribution under section 4(3)(a)" of the MCFA. As noted earlier, § 4(3) provides:
Contribution does not include any of the following:
Although such services are thus not considered a contribution for purposes of the rest of the MCFA, § 57 specifically indicates that public bodies cannot use public resources to provide volunteer services that are not compensated. However, the administration of the payroll deduction system at issue does not involve volunteer services by public employees because the MEA intends to prepay for all services rendered. Because volunteer services are not defined by the statute, again the proper course of action is to look to the plain meaning of the terms to discern the legislative intent. "Volunteer" is defined as "a person who performs a service willingly and without pay."
I dissent from the majority's decision to vacate this Court's December 29, 2010, opinion. A public school may administer payroll deductions for its employees
While the MEA has not provided this Court with numbers regarding the specific benefits yielded from the district's administration of the deduction plan, it is safe to say that the additional contributions garnered, and the reduction in administrative and transactional costs, are "able to be ascertained." In short, if the school district no longer automatically deducted contributions from the paychecks of its employees, the MEA would have to bear the added cost of individually contacting each of its members and individually soliciting contributions from them. Everyone understands that this procedure would be a far more costly, and less effective, way of collecting political contributions than the current procedure. Such a cost is easily "ascertainable," even if the MEA and Justice HATHAWAY are uninterested in calculating it, and thus the cost of direct solicitation that the MEA avoids by the current procedure constitutes a "contribution" as MCFA defines it.
Furthermore, if § (6)(2)(c) is interpreted to apply to public bodies, which are not authorized to establish separate segregated funds in the first place, the operative language of § 57, which prohibits the use of public resources to subsidize partisan political activities, would be rendered null and void. When a political action committee commandeers the resources of the government to raise political contributions for its own benefit, as occurred here, that conduct could always be categorized under Justice CAVANAGH'S interpretation as falling within the § 6(2)(c) exception and rendered permissible. Thus, the § 6(2)(c) exception would entirely consume the rule prohibiting public bodies from making "expenditures" for political purposes, and the Legislature would effectively have taken with the right hand what it had just given with the left. Under such an interpretation, § 6(2)(c) would allow the Secretary of State's office, for example, to solicit contributions to a partisan or special interest political action committee with each driver's license renewal communication; it would allow Secretary of State employees to administer the political contributions received through this process; it would allow Secretary of State facilities and computers to be deployed to make and print relevant informational pamphlets and political action committee materials; and it would allow the Secretary of State's office to attach the postage for these solicitations. This interpretation cannot conceivably be what the Legislature intended when it enacted MCFA. Reading MCFA in its entirety, and in context, it is clear that the Legislature intended the § 6(2)(c) exception to apply only to those entities that possess the authority to create, establish, administer, or fund separate segregated funds in the first place.
This does not make sense. Even if MCL 169.206(2)(c) were not limited to § 55 entities, this provision does not exclude from the definition of "expenditure" an "expenditure" for the "administration of contributions"; rather it excludes an "expenditure" for the administration of a "separate segregated fund or independent committee," which is inapplicable here for the simple reason that the school district is not making an "expenditure" for the administration of a separate segregated fund or independent committee.
On this note, Justice CAVANAGH asserts that when MCL 408.477(1) and MCL 423.209, which grants authority for public employees to engage in collective bargaining, are "considered in tandem," they "`expressly or impliedly grant' school districts the authority to enter collective-bargaining agreements that require a school district to administer a payroll deduction plan." Post at 63. But this analysis is flawed. We have no doubt that school districts have the authority to engage in collective bargaining, and also the authority to administer certain types of payroll deduction plans. However, that authority is limited to "engag[ing] in lawful concerted activities. . . ." MCL 423.209 (emphasis added). The collective-bargaining agreement in this case required the district to engage in an activity in violation of MCL 169.257 and thus cannot serve as the source of authority to make a "contribution or expenditure." By contrast, we have no doubt that a school district has the authority under the law to administer 401(k) contributions, social security and Medicare deductions, and payroll deductions for the payment of union dues and service fees.
See, also, MCL 423.217(1) (protecting collective-bargaining agreements of public school employees).