"The right to criticize government is also an obligation to know what you are talking about."

-Lent Upson, first director of Citizens Research Council

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October 9, 2025

Revisiting the 1998 Seminal Bolt Decision

As the Citizens Research Council has highlighted frequently, Michigan’s local governments face significant challenges in sustaining local revenues to fund the public services they provide. The challenges stem from a fiscal structure that relies primarily on property taxes, subject to growth and rate limitations, and few local revenue-raising options. Local governments face two particularly demanding requirements when considering a new tax.

Michigan law requires an authorizing state law before local governments may levy new taxes (1963 PA 243)
Michigan’s Constitution requires voter approval of new taxes after 1978 (Article IX, Section 31)

As local government leaders look instead to various fees or charges to generate new revenue, such as fees for permits, applications, entrance to public facilities, and charges to businesses for access to city property (franchise fees), it behooves them to consider what revenue-generating efforts are potentially taxes rather than fees and charges. Since the 1995 Michigan Supreme Court decision in Bolt vs. The City of Lansing (587 N.W.2d 264), local government leaders can rely on the test established in the Bolt decision. Should a newly imposed fee function more like a tax, the fee could be legally challenged as a violation of the Headlee Amendment (1978). Litigation will not only burden a local government with the added headaches of managing a legal proceeding but could also involve the loss of future revenues from anticipated fee income.

IN A NUTSHELL

-- Michigan’s local governments face significant challenges in sustaining local revenues to fund the public services they provide because of their overreliance on property taxes and their accompanying revenue and rate limitations.

-- As local governments look to various fees or charges to generate new revenue, it behooves them to keep in mind the seminal Michigan Supreme Court decision in Bolt vs. The City of Lansing that offers a test to determine when an authorizing act and the Headlee Amendment’s requirement for voter approval of a new local tax are necessary.

-- Failure to do so leaves communities vulnerable to legal challenge.

Read the Council Comment

Other Recent Issue Briefs:

Regulation of Large Livestock Farms is Not Working for Farmers or the Environment
Changes to ACA Tax Credits Will Also Disrupt Michigan's Health Care System
Investments in At-Risk Student Funding Slow to Improve Third Grade Reading

All Council Comments

Recent Research Papers:

Evaluating Local-Option Admission Taxes ("Ticket Tax") in Michigan Cities
One Big Beautiful Bill Act and its Impact on Michigan's Budget
Federal Medicaid Cuts Will Have Big Consequences in Michigan

All Research Papers

Making a Difference

The new state budget expands the universal school meals program to include non-public schools. A first.

Craig Thiel, our Research Director and school finance expert, wrote about this in 2023. It took some time, but the House pushed for non-public schools to be included if the program was going to continue in 2026. https://crcmich.org/new-universal-no-cost-school-meals-program-aims-to-address-childhood-hunger-but-excludes-nonpublic-schools

Welcome New Detroit Bureau Director Douglas Ortiz!

The Research Council welcomed Douglas Ortiz to its staff this week as Detroit Bureau Director. Doug has over five years of experience working in public sector finance, research, and data collection. Most recently, Doug managed budget development for the City of Detroit Department of Transportation for over three years, as well as external city agencies, including the Detroit Economic Growth Corporation, the Detroit Employment Solutions Corporation, and the Detroit Public Library. Before that, he was a research associate at Mathematica and worked at Detroit Future City. He is committed to evidence-based research, continuous improvement practices, and community engagement. Welcome, Doug!