No State Reimbursement for Livingston County Landfill Upgrades

This case left a county stuck with a bill for upgrading its landfill to better protect the environment in compliance with the Solid Waste Management Act. The Court ruled that an amendment in the Michigan Constitution requiring the state to reimburse local government units for the cost of complying with a statute only applied if the government unit was required to take the action, in this case, upgrading its landfill. The Court found that the county did not have to upgrade and operate its own landfill to properly dispose of waste. The policy effect of this ruling discourages counties from upgrading their landfills to better prevent pollution, though it may reduce the quantity of landfills if counties cannot afford to operate their own landfills in compliance with environmental regulations.

Livingston County upgraded its sanitary landfill to comply with the requirements of the Solid Waste Management Act. The county sought reimbursement from the state under the Headlee Amendment to the Michigan Constitution, and the state refused to pay. The Michigan Supreme Court held that because state law did not require the county to operate a sanitary landfill, the state wasn’t required to reimburse the county for the costs associated with upgrading the landfill.

In 1972, Livingston County started operating a landfill. The landfill was originally licensed under the Garbage and Refuse Disposal Act, which was replaced by the Solid Waste Disposal Act in 1979. In 1980, Livingston County upgraded its landfill (including putting in a PVC liner) in order to comply with the Solid Waste Management Act. The county sought reimbursement from the state for these improvements to the landfill, but the state refused to reimburse the county.

The county sued the state in the Court of Claims, which held that the state had to reimburse the county under the Headlee Amendment. The Headlee Amendment was a 1978 voter-approved amendment to the Michigan Constitution that says the state must appropriate funds to cover the increased costs when it passes a law requiring new or additional activities or services. In this case, the Court of Claims found that the state was required to reimburse the county for the costs it had incurred in complying with new state-mandated requirements under the Solid Waste Management Act.

Does the state need to reimburse local governments for increased costs due to new or additional services and activities that are optional or only for those services and activities that are required by state law?

The Court (Justice Brickley joined by Chief Justice Riley and Justices Cavanagh, Griffin, Boyle, and Archer) found that the state was not required to reimburse the county for increased costs attributed to upgrading its landfill. The Court read the Headlee Amendment to only apply to increases in the level of any service or activity that are required by state law. It then determined that upgrading the landfill was not required by state law, because the Solid Waste Management Act only required the county to properly dispose of waste, regardless of whether it operated a landfill or shipped the waste elsewhere. Because the Act did not require the county to operate its landfill, the state did not need to compensate the county for the upgrades.

Justice Levin concurred in part and dissented in part. He agreed with the majority that the Headlee Amendment only applied to activities and services required by state law, but would have sent the case back to the lower courts to determine if the county was in fact required to operate a sanitary landfill to comply with the provisions of the Solid Waste Management Act. For example, if no private company was operating a landfill and would dispose of the county’s garbage for a reasonable price, and if surrounding counties would not take Livingston County’s garbage, then it might be the case that Livingston County had no other choice but to operate the landfill in order to comply with the Solid Waste Management Act.