
By Matthew Jane, Pear Sperling Eggan & Daniels, PC
In Bolt v City of Lansing, 450 Mich 152 (1998), the Michigan Supreme Court invalidated the imposition of user fees to fund the City of Lansing’s stormwater collection system. The court held the fees were not valid user charges but instead were unlawful taxes imposed by the city in violation of Section 31 of the Headlee Amendment to the Michigan Constitution. Section 31 prohibits units of local government from levying any new tax or increasing any existing tax above authorized rates without the approval of the unit’s electorate. However, a local unit of government can institute a user fee without voter approval. In general, a “fee” is exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service and benefit. In contrast, a “tax” is designed to raise revenue.
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