FORT HOOD, J.
Defendants, the entities and individuals charged with the administration, collection, and distribution of the state employees' retirement system, appeal as of right the Court of Claims' decision holding that MCL 38.35, the statute requiring a three percent employee compensation contribution to finance the Public Employee Retirement Health Care Funding Act, 2010 PA 77, MCL 38.2731 to 38.2747, is unconstitutional. We affirm.
Plaintiffs
An attempt to reject the three percent wage increase included in the 2010-2011 budget failed in the Legislature. On February 23, 2010, House Concurrent Resolution (HCR) 42 was introduced that proposed rejection of an increase in rates of compensation as recommended by the CSC. There is no indication that the resolution was voted on by house members of the Legislature. On March 3, 2010, an attempt to reject the three percent wage increase was made in the Senate when Senate Concurrent Resolution (SCR) 35 was introduced. This SCR contained an acknowledgment of the constitutional authority of the CSC and the requirement that a vote of two-thirds of the members serving in each house was required to reject the commission's approval of the wage increase. Despite the introduction of SCR 35 and numerous attempts to pass the resolution throughout March 2010, it did not garner a sufficient number of votes for passage. On March 24, 2010, HCR 48 was introduced. This HCR also contained an acknowledgment of the constitutional authority of the CSC and the requirement that a two-thirds vote of the members serving in each house was required to reject the increase. There is no indication that action was taken on this resolution.
Unable to obtain the two-thirds vote in each house to override the three percent compensation increase negotiated in the CBA and approved by the CSC, the Legislature enacted 2010 PA 185, MCL 38.35, and 2010 PA 77, MCL 38.2731 et seq. MCL 38.35 required a mandatory three percent contribution from the compensation of active employee members from November 1, 2010, through September 30, 2013, into the Public Employee Retirement Health Care Funding Act, MCL 38.2731 et seq. Plaintiffs filed suit in the Court of Claims to challenge the reduction from compensation by the enactment of MCL 38.35.
A challenge to the jurisdiction of the Court of Claims presents a statutory question that is reviewed de novo as a question of law. Parkwood Ltd. Dividend Housing Ass'n v. State Housing Dev. Auth., 468 Mich. 763, 767, 664 N.W.2d 185 (2003). The Court of Claims has exclusive jurisdiction to hear and determine "all claims and demands, liquidated and unliquidated, ex contractu and ex delicto, against the state and any of its departments, commissions, boards, institutions, arms, or agencies." MCL 600.6419(1)(a); Parkwood, 468 Mich. at 767, 664 N.W.2d 185. The Court of Claims also has concurrent jurisdiction over "any demand for equitable relief and any demand for a declaratory judgment when ancillary to a claim filed" pursuant to MCL 600.6419. MCL 600.6419a. The determination whether the Court of Claims possesses jurisdiction is governed by the actual nature of the claim, not how the parties phrase the request for relief or the characterization of the nature of the relief. Parkwood, 468 Mich. at 770, 664 N.W.2d 185. "[T]he Court of Claims has exclusive jurisdiction over complaints based on contract or tort that seek solely declaratory relief against the state or any state agency." Parkwood, 468 Mich. at 775, 664 N.W.2d 185.
In the present case, defendants contend that the Court of Claims lacked jurisdiction to issue a declaratory judgment because the issue regarding the availability of benefits for current employees upon their retirement presents a hypothetical injury premised on a future contingent event. The power of state courts to pass upon the constitutionality of state statutes arises only when interested litigants require the use of judicial authority for protection against actual interference, not hypothetical threats. Golden v. Zwickler, 394 U.S. 103, 110, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969). Here, although defendants' statement of the issue alleges a jurisdictional challenge, in fact, defendants effectively assert that there is no justiciable controversy because the availability of health benefits upon retirement for current employees is contingent on a future event. We disagree.
A condition precedent to invoke declaratory relief is the requirement that an actual controversy exist. Detroit v. Michigan, 262 Mich.App. 542, 550, 686 N.W.2d 514 (2004). An actual controversy is present when a declaratory judgment is necessary to direct a plaintiff's future conduct in order to preserve his or her legal rights. Shavers v. Attorney General, 402 Mich. 554, 588, 267 N.W.2d 72 (1978). Although the actual-controversy requirement prevents a court from ruling on hypothetical questions, a court is not precluded from addressing issues before actual injuries or losses have developed. Id. at 589, 267 N.W.2d 72. Furthermore, "declaratory relief is designed to resolve questions ... before the parties change their positions or expend money futilely." Detroit, 262 Mich.App. at 551, 686 N.W.2d 514.
Although defendants characterize plaintiffs' claims as seeking relief from a hypothetical event, plaintiffs allege a current confiscation of their compensation without adherence to the provisions of Const. 1963, art. 11, § 5 and in violation of their CBA and contractual rights. Specifically, irrespective
The trial court's decision regarding a motion for summary disposition is reviewed de novo with the evidence examined in the light most favorable to the nonmoving party. In re Egbert R. Smith Trust, 480 Mich. 19, 23-24, 745 N.W.2d 754 (2008). Issues involving statutory interpretation present questions of law that are reviewed de novo. Klooster v. Charlevoix, 488 Mich. 289, 295-296, 795 N.W.2d 578 (2011). "The primary goal of statutory interpretation is to give effect to the intent of the Legislature." Briggs Tax Serv., LLC v. Detroit Pub. Sch., 485 Mich. 69, 76, 780 N.W.2d 753 (2010). To determine the legislative intent, the court must first examine the statute's plain language. Klooster, 488 Mich. at 296, 795 N.W.2d 578. If the language of the statute is clear and unambiguous, it is presumed that the Legislature intended the meaning plainly expressed in the statute. Briggs, 485 Mich. at 76, 780 N.W.2d 753.
Cases involving questions of constitutional interpretation are reviewed de novo. Midland Cogeneration Venture Ltd. Partnership v. Naftaly, 489 Mich. 83, 89, 803 N.W.2d 674 (2011). When interpreting a constitutional provision, the primary goal is to determine the initial meaning of the provision to the ratifiers, the people, at the time of ratification. Nat'l Pride At Work, Inc. v. Governor, 481 Mich. 56, 67, 748 N.W.2d 524 (2008). "[T]he primary objective of constitutional interpretation, not dissimilar to any other exercise in judicial interpretation, is to faithfully give meaning to the intent of those who enacted the law." Id. To effectuate this intent, the appellate courts apply the plain meaning of the terms used in the constitution. Toll Northville Ltd. v. Northville Twp., 480 Mich. 6, 11, 743 N.W.2d 902 (2008). When technical terms are employed, the meaning understood by those sophisticated in the law at the time of enactment will be given unless it is clear that some other meaning was intended. Id. To clarify the meaning of the constitutional provision, the court may examine the circumstances surrounding the adoption of the provision and the purpose sought to be achieved. Traverse City Sch. Dist. v. Attorney General, 384 Mich. 390, 405, 185 N.W.2d 9 (1971). An interpretation resulting in a holding that the provision is constitutionally valid is preferred to one that finds the provision constitutionally invalid, and a construction that renders a clause inoperative should be rejected. Id. at 406, 185 N.W.2d 9. Constitutional convention debates are relevant, albeit not controlling. Lapeer Co. Clerk v. Lapeer Circuit Court, 469 Mich. 146, 156, 665 N.W.2d 452 (2003). Every provision in our constitution must be interpreted in light of the document as a whole, and "no provision should be construed to nullify or impair another." Id. "Statutes are presumed constitutional unless the unconstitutionality is clearly apparent." Toll Northville Ltd., 480 Mich. at 11, 743 N.W.2d 902. The court's power to declare a law unconstitutional is exercised with extreme caution and is not exercised where serious doubt exists regarding the conflict. Dep't of Transp. v. Tomkins, 481 Mich. 184, 191, 749 N.W.2d 716 (2008).
In October 1935, the Civil Service Study Commission, appointed by Governor Frank
In response to the commission's findings and recommendations and heightened public interest, the Legislature created 1937 PA 346, which was designed to eliminate the spoils system and prohibit participation in political activities during the hours of employment. Council No. 11, 408 Mich. at 398, 292 N.W.2d 442. In its next regular session, the Legislature adopted a group of bills designed to destroy the recently established Civil Service Commission. It created legislation that sharply curtailed the state classified civil service, diminished the authority of the director of the commission by repealing a provision vesting executive and administrative functions in the director, made the director an appointee of the commission to serve at its pleasure, reduced the CSC's appropriation to require serious staff reductions and limited services, and provided increased employment preferences for veterans and former state employees. Id. at 399, 292 N.W.2d 442. The Legislature succeeded in "badly crippling" the newly created Civil Service Commission. Id. Specifically, in a two-year period, the number of "exempt" civil service positions climbed. The percentage of state employees serving in classified positions fell from 90.7 percent in January 1939 to 51.1 percent in March 1940. Id. at 400, 292 N.W.2d 442. Additionally, only the lowest-paying jobs were retained as classified positions. Id. In 1940, apparently unsatisfied with the political maneuvering and the dismantling of the Civil Service Commission, the people of Michigan "adopted a constitutional amendment establishing a constitutional state civil service system, superseding the 1939 legislation." Id. at 401, 292 N.W.2d 442.
Before changes to the 1963 Constitution, the Civil Service Commission had "absolute authority to set compensation at any time during the course of a fiscal year without legislative oversight." Mich. Ass'n of Governmental Employees v. Civil Serv. Comm., 125 Mich.App. 180, 187, 336 N.W.2d 463 (1983). However, at the 1961 Constitutional Convention, delegates proposed a change to allow legislative oversight, commenting as follows:
Consequently, although the prior version of the constitutional article creating the Civil Service Commission contained no provision regarding legislative oversight, Const. 1908, art. 6, § 22 (adopted in 1940), the amendment expressly allowed legislative action over CSC determinations by a two-thirds vote of the members serving in each house. Const. 1963, art. 11, § 5.
Currently, the Civil Service Commission is authorized by Const. 1963, art. 11, § 5, which provides, in relevant part:
The extent of the Civil Service Commission's authority has been addressed by the courts of this state. In Council No. 11, 408 Mich. at 392, 292 N.W.2d 442, one of the individual plaintiffs, an employee in the state classified civil service, filed nominating petitions to become a candidate for political office. As a result of the filing, he was discharged for violating the commission rule ordering a flat ban on off-duty as well as on-duty political activity by all state classified civil service employees. Id. at 392-393, 292 N.W.2d 442. However, the Legislature "is empowered to enact laws to promote and regulate political campaigns and candidacies." Id. at 395, 292 N.W.2d 442. Consequently, the Legislature took the unusual step of enacting 1976 PA 169, which gave employees in the state's classified civil service the "right to engage in partisan political activity, serve as convention delegates and run for elective office while on mandatory leave of absence." Id. at 395, 292 N.W.2d 442. The Civil Service Commission asserted that the statute permitting certain types of political activity was unconstitutional because it conflicted with the commission's rulemaking authority and the commission's exclusive jurisdiction over civil service employees as derived from Const. 1963, art. 11, § 5. Id. at 395-396, 292 N.W.2d 442.
The Supreme Court rejected the commission's challenge to the constitutionality of 1976 PA 169, and allowed off-duty political activity by civil service employees. The Court held that the plain language of the provision creating the Civil Service Commission contained no such language forbidding off-duty political activity that did not interfere with job performance. Id. at 405-407, 292 N.W.2d 442. The Court held that the Civil Service Commission's sphere of authority did not extend to off-duty behavior unrelated to job performance. Id. at 408-409, 292 N.W.2d 442. Therefore, a valid exercise of legislative authority applicable to state classified civil service employees was permissible provided that it did not interfere with the constitutional authority of the Civil Service Commission. Id. at 409, 292 N.W.2d 442. Consequently, legislation must be examined within the context of the authority delegated to the CSC in the Michigan Constitution.
Additionally, in Mich. Ass'n of Governmental Employees, 125 Mich.App. at 183-185, 336 N.W.2d 463, the commission ratified two collective-bargaining agreements that included a five-percent wage increase and vision-care benefits for certain employees. The agreements for the wage increase and the vision-care benefits were transmitted to the Legislature. The Legislature passed a resolution rejecting the wage increase, but the resolution was contingent on the employees' unions' agreeing to modify the collective-bargaining agreements to eliminate the provisions for the wage increase. When the Office of the State Employer was unable to negotiate the concessions with the unions, the resolution became null and void. Consequently, the State Employer, at the behest of the Governor, asked the CSC to rescind the five-percent wage increase. The commission acted to rescind the wage increase and vision benefits applicable to two-thirds of the state classified civil service employees. Id. at 185, 336 N.W.2d 463.
The plaintiffs challenged the CSC's authority to rescind the authorized wage increase after it had been considered by the Legislature. Id. at 186, 336 N.W.2d 463. On appeal, the commission's rejection of the wage increase and vision benefits was upheld. "It is this Court's opinion that the commission had the authority to rescind and defer the proposed increase even after it was considered by the Legislature." Id. at 187, 336 N.W.2d 463. Const. 1963, art. 11, § 5, ¶ 7 allows the Legislature to have narrowly drawn veto power over increases in state wages. Mich. Ass'n of Governmental Employees, 125 Mich.App. at 189, 336 N.W.2d 463. This provision of the Michigan Constitution does not foreclose "later action by the commission to rescind an authorized increase which has not been vetoed by the Legislature." Id. The Legislature's inability to veto an increase by a two-thirds vote of the members serving in each house does not mandate that salaries be maintained at that level in light of the authority over compensation that is granted to the Commission. Id. Consequently, the CSC exercised its sphere of authority to reduce compensation to classified civil service employees when the Legislature failed to act or was unable to garner sufficient support of its members to act within the parameters for adjustments to compensation in accordance with the Michigan Constitution.
In 1943, the Legislature established a savings fund for employees that required deductions for contribution to the fund. The statute, MCL 38.35, provided, in relevant part:
The statutory provision following MCL 38.35 in 1943 PA 240, MCL 38.36, expressly stated that the deduction was agreed to between the Legislature and the members. MCL 38.36 provided:
MCL 38.35 was amended in 1955 (1955 PA 237) to require, in relevant part, as follows:
MCL 38.36 was modified by 1955 PA 237 to provide that the payroll deduction to the employees' savings fund was presumably consented to by the members:
MCL 38.35 and MCL 38.36 were repealed by 1974 PA 216. However, effective September 30, 2010, the Legislature enacted 2010 PA 185, which added a new MCL 38.35, the statute at issue in this case, to implement member and participant contribution to health-care-financing accounts, stating in subsection (1) of § 35:
Notably absent from this legislation is MCL 38.36, now repealed, the companion provision to prior versions of MCL 38.35 that expressly stated that the deduction was the subject of an agreement among members to consent to the deduction and to preclude litigation premised on the deduction.
With regard to the present version of MCL 38.35, plaintiffs contend that the enactment
A review of the record reveals that plaintiffs, unions and their members, negotiated a CBA wage provision that culminated in a three percent wage increase for fiscal year 2010-2011. The commission's sphere of authority, Plec, 322 Mich. at 694, 34 N.W.2d 524, includes determinations of rates of compensation for all positions in the classified service:
Although the commission has plenary authority over the rates of compensation, a system of checks and balances was established with the Legislature in the Michigan Constitution of 1963. Mich. Ass'n of Governmental Employees, 125 Mich.App. at 187-189, 336 N.W.2d 463. Specifically, an increase in the rate of compensation authorized by the commission may be rejected or reduced by the Legislature "by a two-thirds vote of the members elected to and serving in each house" provided the vote occurs within 60 calendar days of the transmitted increase. Const. 1963, art. 11, § 5, ¶ 7; Mich. Ass'n of Governmental Employees, 125 Mich.App. at 187, 336 N.W.2d 463. "The [L]egislature may not reduce rates of compensation below those in effect at the time of the transmission of increases authorized by the commission." Const. 1963, art. 11, § 5, ¶ 7. The Civil Service Commission has the sole authority to fix rates of compensation. Const. 1963, art. 11, § 5, ¶ 4. The term "compensation" is defined as "something given or received for services, debt, loss, injury, etc." Random House Webster's College Dictionary (2001), p. 271. By enacting 2010 PA 185 and adding the current version of MCL 38.35, the Legislature acted to reduce the compensation of classified civil servants by three percent without an accompanying agreement with the unions or the CSC. The sole authority to fix rates of compensation of classified civil servants is vested with the CSC. Womack-Scott, 246 Mich. App. at 79, 630 N.W.2d 650.
When interpreting a constitutional provision, the primary objective is to determine the initial meaning of the provision to the ratifiers, or the people, at the time of ratification. Nat'l Pride, 481 Mich. at 67, 748 N.W.2d 524. To effectuate this intent, the plain meaning of the terms used in the constitution are examined and applied. Toll Northville Ltd., 480 Mich. at 11, 743 N.W.2d 902. To clarify the meaning of this provision, we may examine the circumstances surrounding its adoption and its purpose. Traverse City Sch. Dist, 384 Mich. at 405, 185 N.W.2d 9. Every provision of the constitution must be interpreted in light of the document as a whole, and no provision should be construed to nullify or impair another. Lapeer Co. Clerk, 469 Mich. at 156, 665 N.W.2d 452.
The Separation of Powers Clause of the Michigan Constitution states:
"The Constitution of the State of Michigan is not a grant of power to the [L]egislature, but is a limitation upon its powers." In re Brewster Street Housing Site, 291 Mich. 313, 333, 289 N.W. 493 (1939). The plain language of Const. 1963, art. 11, § 5, ¶ 7 shows the intent that the rate of compensation is established by the CSC. Although the Legislature may exercise oversight over the CSC, it must act within 60 days of the commission's action and must do so by a two-thirds vote of the members serving in each house. Const. 1963, art. 11, § 5, ¶ 7.
In the present case, the Legislature attempted to eliminate the three percent wage increase for the fiscal year 2010-2011 but did not succeed. However, the Legislature faced a budget deficit and determined that it would balance the budget by reducing the "compensation" of state employees, as defendants readily admitted in their brief on appeal:
Pursuant to Const. 1963, art. 3, § 2 and Const. 1963, art. 11, § 5 the Legislature did not have the authority to act to eliminate the three percent wage rate increase by enacting MCL 38.35 to remedy a budget deficit. The process for overriding the commission is expressly set forth in the Michigan Constitution, and when the Legislature failed to successfully invoke that process, it enacted MCL 38.35 to exercise authority over compensation, which is within the sphere of authority of the commission. Plec, 322 Mich. at 694, 34 N.W.2d 524.
Moreover, caselaw reflects a record of cooperation between the branches of government to abide by the separation of powers as set forth in the Michigan Constitution. Specifically, when a voluntary layoff program failed to achieve the costs savings necessary to correct an increasing budget deficit, the commission, at the request of another branch of government, temporarily suspended its rules to allow for a program of six one-day layoffs. Crider, 110 Mich.App. at 723-725, 313 N.W.2d 367. This Court upheld the commission's actions, determining that the commission had the exclusive authority to establish the conditions of employment for public employees. Id. at 725, 313 N.W.2d 367. Additionally, in Mich. Ass'n of Governmental Employees, 125 Mich.App. at 183-185, 336 N.W.2d 463, the commission, at the behest of the State Employer, rescinded a five-percent wage increase and the addition of vision benefits for some state classified employees. This Court ruled that the commission had the authority to rescind and defer the proposed increase even after it was considered by the Legislature. Id. at 187, 336 N.W.2d 463. In the present case, there is no evidence that a process of negotiation was even attempted between the commission and the Legislature to achieve cost savings.
Defendants also submit that the prior versions of the retirement act, repealed in 1974, existed without constitutional challenge. However, the fact that a constitutional challenge did not occur is not dispositive. As noted in the context of taxation issues, "[i]t is obviously correct that no one acquires a vested or protected right in violation of the Constitution by long use, even when that span of time covers our entire national existence and indeed predates it." Walz v. Tax Comm. of the City of New York, 397 U.S. 664, 678, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970). The fact that the prior versions of MCL 38.35 were not the subject of a constitutional challenge does not render them constitutional. Walz, 397 U.S. at 678, 90 S.Ct. 1409. Furthermore, the prior versions of the savings fund retirement deduction contained an express provision holding that employees had agreed to the reduction in wages, see MCL 38.36 repealed in 1974. The current version of the retirement act, MCL 38.35, contains no similar provision, and there was no negotiated agreement with classified civil service employees.
Defendants also contend that the will of the people must be examined with regard to the passage of MCL 38.35 and that the people would approve of state workers' being responsible for retirement costs. The people did not vote on and ratify the terms and conditions of MCL 38.35. Rather,
Const. 1963, art. 11, § 5 provides that the rates of compensation for all employees in the classified service are fixed by the commission. It further sets forth the process for a legislative override of any wage increase submitted to the Governor by legislative vote of two-thirds of the members serving in each house. In the present case, the Legislature did not achieve its goal of preventing the wage increase in accordance with the constitutional provisions. Therefore, it enacted MCL 38.35 to fill a budget deficit. When a statute contravenes the provisions of the Michigan Constitution, it is unconstitutional and void. Pillon, 345 Mich. at 547, 77 N.W.2d 257. Accordingly, the trial court did not err by granting plaintiffs' motion for summary disposition and denying defendants' motion for summary disposition.
Affirmed.
BECKERING, P.J., and STEPHENS, J., concurred with FORT HOOD, J.