By a 1971 enactment, the legislative assembly required all police officers and firemen employed by any city, county, or district to be brought within the state's Public Employes Retirement System by July 1, 1973, unless the particular public employer provides them with equal or better retirement benefits. Or. Laws 1971, ch. 692, codified at ORS 237.610-237.640. The same statute also required these public employers to pay the premiums on an insurance policy purchased by the state's Department of General Services, providing $10,000 to an officer's or fireman's beneficiaries in case of his or her job-related death, again unless the employer provides equal or better benefits. ORS 243.005-243.055.
The validity of the retirement provisions of the statute was attacked in separate declaratory judgment proceedings brought by the Cities of La Grande and Astoria against various state officials and against their respective police and firefighters as a class or as represented by their collective bargaining agents.
The cases have been extensively briefed by the parties and numerous amici curiae. For the reasons that follow, we conclude that in enacting these retirement and insurance requirements the legislature did not exceed constitutional bounds and accordingly reverse the decisions below.
The issues in these cases arise from two provisions of the Oregon Constitution that together provide "home rule" for cities and towns.
In article IV, section 1a (now 1(5)), the statewide initiative and referendum powers "reserved" to the people by amendment of article IV, section 1, in 1902 were "further reserved to the qualified voters of each municipality and district as to all local, special and municipal legislation of every character in or for their municipality or district."
The relationship between the authority of the legislature and that of local governments under these provisions during the past 70 years has occupied this court in more than 75 cases. As might be expected, the court has employed a variety of formulations in explaining these decisions. This is only proper, since that relationship presents a number of distinct issues rather than a single issue. In any given case, it is necessary to distinguish whether it involves (1) the validity of a local act in the absence of a contrary state law;
It is useful to recall the role of the amendments in the state's constitutional arrangements. With respect to local authority,
Moreover, these constitutional provisions are concerned with the structural and organizational arrangements for the exercise of local self-government, with the power of local voters to enact and amend their own municipal charters and to employ the initiative and referendum for "local, special [or] municipal legislation." They address the manner in which governmental power is granted and exercised, not the concrete uses to which it is put. Except for the limits on the initiative and referendum implied in the quoted phrase of article IV, section 1(5), the amendments do not purport to divide areas of substantive policy between the levels of government. Accordingly, the accommodation of state and local authority most directly involves the amendments when a party invokes a state law as governing some process of local government, such as elections,
The important issue in the early disputes over the effects of the amendments was whether the prohibition of article XI, section 2, extended beyond laws changing a single municipal charter to laws amending such charters generally. The court had been sharply divided in two cases decided in 1914,
The court's opinion continued:
And Judge Harris ended by expressing satisfaction that his conclusions were fully supported by Chief Justice McBride, "who says that the sponsors for the amendments neither intended nor thought nor even dreamed that the amendments would prohibit the legislature from enacting general laws relating to municipalities, cities and towns." Id. at 572, 162 P. at 508.
Thus the court in 1917, on review of the text and the contemporaneous history, reached the conclusion that the legislature retained the power to enact general laws even if they affected the charters of all or many municipalities. Id. at 573, 162 P. 498. Our purpose in quoting this background at length is not to revive that conclusion of Rose v. Port of Portland. We do not. Our purpose is only to show that this question whether article XI, section 2, prevented general as well as special laws for municipalities was the issue around which the competing views of that section were stated.
It was also in the context of this argument about the validity of general laws prescribing municipal modes of government that the same issue was reexamined most recently in State ex rel. Heinig v. City of Milwaukie, 231 Or. 473, 479, 373 P.2d 680 (1962). There a state law requiring a city to establish a civil service system, administered by a prescribed city commission, was defended on the ground that it applied to all cities. The court rejected the argument
But even with respect to a law prescribing municipal modes of government, the court concluded, a general law might be valid if it served a predominant social interest extending beyond the local municipality. This conclusion is consistent with many of the court's decisions in which state standards designed to safeguard the interest of private persons in the procedures of local government have generally been sustained.
The quoted holding of Heinig states the rule for testing general laws for the processes of city government. The opinion in Heinig went further, explaining this holding by a view of the state and its cities as competing sovereignties that seemed to extend to all conflicts of state and local policy. But we do not think that article XI, section 2, extends that far, nor that the Heinig formula should be extended beyond the context of laws for city government in which it was formulated. This is so for two reasons. First, constitutional provisions like those for home rule in the first instance are designed to formulate how government is to govern, not how judges are to exercise judicial review. Article XI, section 2, for instance, is addressed to the legislative assembly and to the cities, telling the legislature what it may not do and the voters of the several cities what they may do. Judicial interpretations of such a provision must strive to articulate these directives and avoid formulations that give no guidance to government and leave every policy dispute to judicial decision. Of course this does not mean that challenges to a state or local act under the home rule provisions are beyond judicial review. We are reviewing such a challenge in this very case. Rather, it bears on the proper interpretation of the provisions.
Secondly, however, when such a challenge does reach a court, the court's decision must be derived from a constitutional standard, not from the court's own view of competing public policies. The accommodation of state and local authority over the processes of city government at least involves comparable interests — the citizens' interests in responsible government, in elections, in official accountability, in the procedures of policy planning and decision, taxing and borrowing, and the like. See, for instance, City of Woodburn v. State Tax Comm'n, supra, which compared the state and the city's provisions for informing voters of the impact of a tax. These processes of government are the chief object of the municipal charters mentioned in article XI, section 2, as has been set forth more expressly in the more recently formulated constitutional provisions for county charters.
Outside the context of laws prescribing the modes of local government, both municipalities and the state legislature in many cases have enacted laws in pursuit of substantive objectives, each well within its respective authority, that were arguably inconsistent with one another. In such cases, the first inquiry must be whether the local rule in truth is incompatible with the legislative policy, either because both cannot operate concurrently or because the legislature meant its law to be exclusive. It is reasonable to interpret local enactments, if possible, to be intended to function consistently with state laws, and equally reasonable to assume that the legislature does not mean to displace local civil or administrative regulation
It is therefore pertinent to the prohibition expressed in article XI, section 2, to determine whether the challenged law is addressed primarily to a concern of the state with the modes of local government or to substantive social, economic, or other regulatory objectives.
Petitioners contend, in advance of reaching this question, that there is no issue of conflicting state and local laws in these cases because the pertinent policies of the Cities of La Grande and Astoria are not found in the charter or the ordinances of either city. It is true that article XI, section 2, literally only forbids the legislative assembly to "enact, amend or repeal" such charters, granting that power to the local voters. But cities sometimes place into charters specific actions on substantive matters that are unrelated to the city's governmental processes and, on the other hand, place rules for the conduct of government into ordinances, or perhaps resolutions, by-laws, or other forms of enactment allowed by the city's charter. It is not the label that matters but the role of the provision in local self-government.
The 1906 amendments were not designed to exalt form over substance, on the one hand leaving all local modes of government at the mercy of the legislature unless written into the local charter and on the other hand immunizing from state law any local policy on any subject if only it is placed in the charter. They were designed, as we have said, to secure local control over the structure and organization of local government, and the capacity to act on a community's own initiative in any form, so long as the action is authorized by the voters either in a charter or in "local, special [or] municipal legislation" adopted under article IV, section 1(5), and is not otherwise contrary to law.
The provisions of ORS chapters 237 and 243 requiring retirement and insurance benefits for police officers and firemen do not fail the test stated above. The statutes plainly embody a legislative concern with securing the postemployment living standards of persons in these occupations and their families, not with the cities' governmental organization. It is not essential to the legitimacy of this goal whether the legislature singled out police officers and firemen because it deemed these occupations particularly hazardous or the desired benefits difficult and costly to obtain piecemeal, nor whether its assumptions were well founded. In any event, the statutes are addressed to a statewide substantive, social objective rather than any asserted concern with the modes of local government.
The present legislation avoids the prescription of precise municipal organization involved in the two adverse decisions most nearly in point, Branch v. Albee, 71 Or. 188, 142 P. 598 (1914), and State ex rel. Heinig v. City of Milwaukie, supra. In Branch the challenged statute undertook to establish a police disability and pension fund "in cities of the state, having more than 50,000 inhabitants," to create in the act itself a city "board of police pension and relief," and to designate the precise license fees and fines to be used for the fund.
In contrast, the present statutes do not create any agencies of local government, nor do they direct local communities to do so. They oblige local governments to bring their police officers and firemen under the benefits provided respectively by the state's retirement system and a statewide insurance policy, but even that obligation is made contingent upon an option to provide equal or better benefits by other means of the local government's choice. ORS 237.620, ORS 243.055. The administrative machinery of these statutes is state administration, not compelled local administration.
Though the legislature in these laws has not mandated city administration in the manner that proved fatal in Branch and Heinig, its pursuit of its statewide social objective undeniably displaces the arrangements (or absence of arrangements) preferred by the local government. This is not uncommon, as many of our cited decisions show. Nor is it generally useful to define a "subject" of legislation and assign it to one or the other level of government. To treat "local personnel" as such a subject, for instance, would appear to sweep beyond the civil service law invalidated in Heinig and to raise doubt whether local employees also must be excluded from all state occupational qualifications or state protective laws, e.g., workers' compensation, wage and hour standards, safety standards, nondiscrimination, or child labor laws. Cf. Pederson v. City of Portland, 144 Or. 437, 24 P.2d 1031 (1938), sustaining the application of a state law requiring overtime pay to city employees.
The geographic boundaries of local entities are not much more determinative in excluding state concerns. Arguments presented in these cases, as in Heinig, point out that city police officers and firemen are sometimes assigned duties beyond their cities, but this is hardly needed to demonstrate a state concern. Large complexes of state buildings and state personnel such as college campuses, and indeed the state Capitol, executive offices, and this court, depend on the quality of police and fire protection within city limits, and thousands of persons who frequent city streets and business districts every day are not city residents. The state relies on local governments for many functions deemed important to the state within local boundaries, most recently land use controls.
Finally, as individuals we may differ with legislative policies that mandate substantive standards for programs and activities for which local taxpayers and local officials rather than state legislators will bear the fiscal responsibility. But if there are other constitutional limitations than the "home rule" amendments that preclude the particular financial effect of the statutes involved in these cases, the parties have not brought them to the court's attention. The simple provision of article XI, section 2, that "[t]he Legislative Assembly shall not enact, amend or repeal any charter or act of incorporation for any municipality, city or town" does not purport to sweep that broadly.
When a statute is addressed to a concern of the state with the structure and procedures of local agencies, the statute impinges on the powers reserved by the amendments to the citizens of local communities. Such a state concern must be justified by a need to safeguard the interests of persons or entities affected by the procedures of local government.
Conversely, a general law addressed primarily to substantive social, economic, or other regulatory objectives of the state prevails over contrary policies preferred by some local governments if it is clearly intended to do so, unless the law is shown to be irreconcilable with the local community's freedom to choose its own political form.
As we have said, the statutes challenged by the cities in these cases are of the second, substantive kind. The provisions for financial security for police officers and firemen and their dependents in the event of retirement, disability, or death address a social concern with the living standards of these classes of workers, not with local governments as such. Various categories of employees are not placed beyond the reach of the state's social legislation merely because their occupational functions — here police and fire protection, elsewhere perhaps municipal transit or utility or library services — happen to be found in the public sector of local government. While the statewide retirement and insurance plans do displace other plans that local agencies have made, or might make, for these objectives, they are not irreconcilable with the freedom to charter their own governmental structures that are reserved to the citizens of Astoria and La Grande by article XI, section 2. Accordingly, the statutes are constitutional.
TONGUE, HOWELL and BRYSON, JJ., separate dissenting opinions.
TONGUE, Justice, dissenting.
I agree that, as a general rule, dissenting opinions should be restrained and respectful. It is difficult to do so, however, when, because of a purely fortuitous change in the membership of this court, there is now a majority which, by a margin of one vote, has prevailed by an opinion which:
(1) Drastically upsets the long-existing balance of power between Oregon cities and the state legislature in the critical area of "home rule" by abandonment of the long-established concept that the "home rule"
(2) Substitutes for that long-established concept of "local autonomy" a new rule of "legislative supremacy," to the effect that the state legislature may legislate as to all matters which it deems to involve some state-wide interest, with the single exception of some matters involving the "structure and procedures of local agencies." (See 1221 to 1223, 1226 to 1229.) Despite the fact that the Oregon courts have long served as a protective "fence" between "the fox and the chickens," the majority has now removed most of the "fence," leaving the "chickens" at the mercy of the "fox."
(3) Overrules a line of unanimous decisions extending for a period of more than 40 years in which this court has carefully considered this entire matter. Also ignored by the majority are the views expressed by many writers in accord with those decisions by this court. As a substitute, the majority has adopted a new and novel rule for which it cites no direct authority and which is a "hybrid of uncertain ancestry." (See 1218 to 1221, 1222, 1229.)
(4) Permits the legislature to transfer to the cities the cost of expensive social programs of predominately local interest, without the state assuming financial responsibility for such programs, thus compelling Oregon cities to make expenditures, incur debts, or levy taxes to raise funds for such programs. (See 1232 to 1234.)
(5) Uses this case as a vehicle for a "judicial tour de force" by the adoption of that new and unprecedented rule despite the fact that the majority could have sustained the validity of state laws requiring cities to provide pensions for police officers and firemen by application of the rule previously recognized by this court for application in such cases. (See 1232 and 1232, 1233.)
(6) Decides this case upon the basis of a new and drastic rule not urged by any of the parties or amicus curiae in this case, upon which these cities have had no fair opportunity to be heard and which, as a practical matter, is imposed upon them "without due process." (See 1223, 1224, 1226, 1228, 1229, 1230, 1233, 1234.)
In order to evaluate the validity of these contentions it becomes necessary, after reviewing some of the background of "home rule" in Oregon, to discuss the differences between the rule as adopted by the majority and the previous decisions of this court on the following subjects: (1) the purpose of the Oregon "home rule" amendments; (2) the proper test to be applied in determining what matters are reserved to the cities for "home rule"; (3) the role of the courts in the application of that test; (4) the role of the legislature in the application of that test; (5) the proper application of that test in this case, and (6) the financial impact upon Oregon cities of the rule of "legislative supremacy" as adopted by the majority.
I. The previously established law of "home rule" in Oregon.
A. General authorities — the Oregon "home rule" amendments.
It has been recognized by authorities on this important subject that one of the basic purposes of "home rule" is to "stake out a limited area where local government could legislate for itself"
According to a recognized authority on this subject:
The problem, as recognized by another writer, is
Generally speaking, there are two types of state constitutional provisions for home rule: (1) those which grant to the cities "local autonomy" within a limited area, the boundaries of which are left to judicial determination, and (2) those which recognize "legislative supremacy" as to all areas, but permit municipal legislation in areas not pre-empted by state legislation.
It has been said that the "local autonomy" approach offers a more substantial guarantee of meaningful home rule power, although creating a difficult task for the courts in determining what areas are subject to "local autonomy"; whereas the "legislative supremacy" approach, while obviating much of that difficulty, makes most substantial home rule powers depend upon "legislative grace" and encourages state legislatures to impose financial burdens on cities.
As of 1906, when the "home rule" amendments to the Oregon Constitution were adopted, five other states had previously adopted "home rule" amendments, including Missouri, California, Washington, Minnesota and Colorado, with varying results.
B. The previous interpretation of the Oregon "home rule" amendments by this court.
1. The purpose of such amendments.
As noted by the majority, these amendments to the Oregon Constitution have been variously interpreted by the court. Indeed, during the first 30 years there were two distinct lines of cases. One, including Branch v. Albee, 71 Or. 188, 142 P. 598 (1914) (involving the validity of a state law requiring the City of Portland to adopt a pension system for policemen — almost the exact question presented in this case), held that these provisions were intended to grant to cities "full power to legislate for themselves as to all local, municipal matters."
During the past 40 years, however, there has been no such division. In 1936, in City of Portland v. Welch, 154 Or. 286, 59 P.2d 228, much of the previous conflict in the decisions of this court on this question was resolved. In Welch this court, in a unanimous opinion, quoted with approval from 1 McQuillin, Municipal Corporations § 93 (2d ed. 1928), a leading authority on municipal law, as follows:
This court in Welch (at 296, 59 P.2d at 232) also quoted with approval from an opinion in Pearce v. Roseburg, 77 Or. 195, 208, 150 P. 855, 859 (1915), by Chief Justice McBride, one of the "framers" of the "home rule" amendments, in which he stated that he considered it to be
This is of particular significance in view of the fact that in Rose v. Port of Portland, 82 Or. 541, 162 P. 498 (1917), Justice Harris stated (at 572, 162 P. 498) that Justice McBride was then of a contrary view — a statement deemed by the majority opinion in this case (at 1209) to be of some significance.
Since the decision in Welch in 1936 the law on the subject of the purpose of the "home rule" amendments has been unchanged and has again been "settled" to the effect that the purpose of the Oregon "home rule" amendments was to make a grant to cities of "full power in matters of local concern," free from "legislative interference." Since then this court has not again held, as in Rose, that such was not the purpose of the Oregon "home rule" amendments.
In 1962 this court reaffirmed the position taken in 1936 in Welch in a unanimous opinion by Chief Justice O'Connell, State ex rel. Heinig v. Milwaukie et al., 231 Or. 473, 373 P.2d 680, which reviewed not only the previous decisions by this court on this subject, but also the writings by various authorities on municipal law. After carefully reviewing, considering and citing many of these authorities, this court expressly and unanimously held as follows:
That purpose of the Oregon "home rule" amendments, as held in both Welch in 1936 and in Heinig in 1962, was again reaffirmed in a unanimous opinion by Justice Holman in City of Woodburn v. Tax Com., 243 Or. 633, 637, 413 P.2d 606 (1966), quoting with approval from both Heinig and Welch.
Most recently, in another unanimous opinion by Chief Justice Denecke, in Olsen v. State of Oregon, 276 Or. 9, 554 P.2d 139 (1976), although not directly involving the Oregon "home rule" amendments, this court said (at 25, 554 P.2d at 147) that:
2. Test to be applied.
In Heinig this court held that "the real test" to be applied in determining whether a particular matter is one of "local" or "state" concern is "not whether the state or the city has an interest in the matter, for usually they both have, but whether the state's interest or that of the city is paramount." 231 Or. at 481, 373 P.2d at 685. In other words:
Again, that "test," as stated in Heinig, was later expressly approved by this court in a unanimous opinion by Justice Holman in City of Woodburn v. Tax Com., supra, 243 Or. at 636, 413 P.2d 606, following a previous decision in Boyle v. City of Bend, 234 Or. 91, 99, 380 P.2d 625 (1963), which also cites Heinig with approval.
This court also held in Heinig (231 Or. at 488, 373 P.2d at 688) that:
3. Jurisdiction of the courts.
In Heinig it was also held unanimously that it is for the courts of Oregon to determine what matters are of predominately state-wide interest, so as to be subject to the exclusive power of the legislature, and what matters are of predominately local interest, so as to be subject to the exclusive power of Oregon cities in holding (at 483-84, 373 P.2d at 686) that:
There was nothing "new" in this assertion of jurisdiction in Heinig. Indeed, this court had exercised such jurisdiction in many previous cases. In previous cases, however, this court had not stated the "test" to be applied in the exercise of such jurisdiction, as subsequently stated in Heinig.
4. Power of the legislature.
This court expressly held in Heinig (at 488, 373 P.2d at 688) that:
and (at 479, 373 P.2d at 683) that:
As of the date of the filing of the complaint in these two cases in 1976, it would appear to be a fair statement that the law of Oregon on the subject of "home rule" appeared to be settled, at least to the extent of a recognition that (1) one of the basic purposes for Oregon's "home rule" amendments was to "carve out" an area of "local autonomy" for the cities of Oregon by a grant to the cities of full and exclusive power over matters of "local concern," free from interference by the state legislature, although reserving to the legislature full power to legislate by general laws on "matters affecting the people generally"; (2) that the test to be applied in determining whether a particular matter is subject to the exclusive "home rule" power of cities over matters of "local concern" was to determine whether the city has an interest which "predominates" over that of the state; (3) that the application of this test and the resolution of such "jurisdictional disputes" between cities and the state was a matter to be decided by the Oregon courts; and (4) that the legislature had no power to "intermeddle" by general laws in matters of "local concern."
This meant, of course, that the courts must determine in each case the question of whether the interest of the city was so great as to "predominate" over that of the state, so as to be within the exclusive "home rule" powers of the city involved, or whether the interest of the state was so great as to "predominate" over that of the city, so as to be a proper subject of a general statute.
It is most significant to note that none of the parties by their briefs in these two cases denies that the law relating to the Oregon "home rule" amendments with reference to (1) purpose; (2) test to be applied; (3) role of courts; and (4) role of legislature at the time of the filing of these cases was as stated in Heinig. Instead, the sole dispute as presented by such briefs is over the question whether, under the rule as stated in Heinig, the pension program and life insurance policies required by ORS 237.610 to 237.640 and ORS 243.005 to 243.055 are matters of "local concern," so as to be subject to the exclusive "home rule" power of the cities.
II. The majority opinion.
A. Purpose of the Oregon "home rule" amendments.
The basic premise and foundation upon which most of the reasoning of the opinion by Justice Linde rests is revealed by his statement (at 1207, 1208) that the "central object" of the Oregon "home rule" amendments was to "allow the people of the locality to decide upon the organization of their government and the scope of its powers under its charter without having to obtain statutory authorization from the legislature, as was the case before the amendments," and his statement (at 1209) that, according to Rose v. Port of Portland, supra, "the sponsors for the amendments neither intended nor thought nor even dreamed that the amendments would prohibit the legislature from enacting general laws relating to municipalities, cities and towns."
Based upon this reasoning the majority then announces a completely new concept — namely, that the intended purpose of the Oregon "home rule" amendments was only to grant to the cities the limited power to legislate upon matters involving what the majority refers to variously as "processes" or "mode" of local government, or as "structure and organization" or "structure and procedures" of local government, as distinguished from "substantive social, economic, or other regulatory objectives."
It is obvious, of course, that this new concept by the majority that the intended purpose of the Oregon "home rule" amendments is limited to matters involving "organization," "structure" or "procedure" of local government imposes a drastic limitation upon the area in which cities have exclusive power to legislate, as compared with the view as previously accepted for the past 40 years, as stated in Welch, Heinig and Woodburn, to the effect that the intended purpose of these constitutional amendments was to make a grant to cities of "full power" in all matters of "local concern," free from "intermeddling" by the state legislature. It is equally obvious that this new concept compels a dramatic shift in the balance of power between the state legislature and Oregon cities in the important area of home rule.
But aside from the drastic nature of this change, it is submitted, with all due respect, that this new concept, which is the foundation upon which the majority rests its opinion, is not only a curious hybrid of uncertain ancestry, but is unsound and should have been rejected by this court for the following reasons:
(1) Matters of "substance," as well as matters of "procedure," can be matters of "predominantly local interest." For example: the style of uniforms worn by firemen (an example referred to by this court in Heinig (231 Or. at 485, 373 P.2d 680) or the number and location of benches or swings in a city park. On the other hand, matters of "procedure" of city government may be of "predominantly state-wide interest," such as the manner in which a ballot measure for a municipal tax measure is stated, for information of the voters. City of Woodburn v. Tax Com., supra.
(2) The fact that most previous cases presented to this court, including Heinig, may have involved "some process of local government" is, of itself, wholly insufficient to support the conclusion that the Oregon "home rule" amendments were intended to make a grant of home rule power to cities which was limited to matters of "organization," "structure" or "procedure," in the absence of a proper basis for such a conclusion in the terms of the Oregon "home rule" amendments.
(3) There is nothing in the terms of the Oregon "home rule" amendments which supports, or is claimed by the majority to support, its conclusion that the intended purpose of these constitutional amendments was to limit the grant of home rule powers to cities to matters of "organization," "structure" or "procedure" and to reserve to the state the exclusive power to legislate as to all other matters by general "civil" laws. On the contrary, Art. IV, § 1(a) (now § 1(5)), expressly reserves power to the voters of cities over "all local, special and municipal legislation of every character" and Art. XI, § 2, provided that the home rule process granted to cities was subject only to "the Constitution and criminal laws of the State of Oregon."
(5) While there may be some virtue in a more specific definition of the nature and scope of the matters subject to a constitutional grant of "home rule" to cities, in the absence of specific definitions or other terms as set forth in a constitutional home rule amendment,
(6) None of the parties or amicus curiae in these cases contended by their briefs in these cases that this court should overrule Welch, Heinig and Woodburn, on this important matter, but all proceeded upon the implicit assumption that the purpose of the Oregon "home rule" amendments is to grant to cities exclusive power to legislate on all matters of "local concern, as held in Welch, Heinig and Woodburn, and that the issue to be decided in these cases is whether these statutes involve matters of state or local concern.
Prior to oral argument in these cases this court, by letter, requested that the parties be prepared on oral argument to respond to the following questions:
At oral argument counsel for the defendant unions suggested, and for the first time, that the Heinig test be "refined" by substitution of a "substantial or significant state interest" analysis for the Heinig "predominant state interest" analysis. None of the parties, however, either in their briefs or at oral argument, suggested that Heinig be either "refined" or "reconsidered" by substituting for it the theory now adopted by the majority as the basis for its decision.
This court has held many times that a party cannot raise issues or concepts that he did not present and rely upon in the trial court and that this court will not consider a new theory as the basis for the decision of a case raised for the first time on appeal, even when such a new theory, having been raised on appeal by the brief of one party, afforded to the other party a full opportunity to be heard in opposition to it.
It is unthinkable to me that because a case comes to us on petition for review from the Court of Appeals (as will soon be true of all cases) this court, by simply writing a letter to counsel asking for their views as to whether a rule as stated in some previous case should be "refined" or "reconsidered," should now feel free to decide any such case on any theory or ground, including one not suggested by any party in response to such a letter, and even though the losing party has had no opportunity to be heard before doing so. To me, such a practice strikes at the very roots of the adversary system, as well as the basic concept of "due process." Appellate judges should also not forget the justifiable frustration of a lawyer or litigant who loses a case by a decision based upon a theory or ground which had not been urged by his opponent and on which he had no opportunity to be heard.
As pointed out later (at 1232) the new theory adopted by the majority as the basis for its decision in this case was not necessary to support the result reached by the majority because the same result could properly have been reached by the majority under the rule established in Welch, Heinig and Woodburn. That theory could have provided a proper basis for discussion in a concurring opinion as a proposed alternative basis for the decision of these cases, for possible consideration in a future "home rule" case, such as in the companion case of City of Hermiston v. Employers Relations Board, 27 Or.App. 755, 557 P.2d 681 rev. on other grounds, 280 Or. 291, 270 P.2d 663 (1977), when that case is again before this court on its merits. This court could then have had the benefit of briefs and arguments of counsel upon that proposal. Indeed, if it has the merit claimed for it by the majority, there is no good reason why it should not have been thus submitted to the scrutiny of the adversary process, as in the usual case. In my view, however, it is improper to adopt this new, untried and untested rule as the basis for an opinion by a bare majority of this court which so drastically changes the previously existing balance of power between the legislature and the cities in the important area of "home rule" when these cities have had no fair opportunity to be heard.
B. The test to be applied.
The majority has overruled its previous unanimous holdings both in Heinig and in Woodburn that the "real test" to be applied in deciding whether a given matter is subject to exclusive power of the state or of the cities is to determine which has an interest which "predominates" over the interest of the other after a "weighing" of the interest of each. As a substitute for that simple test, the majority, based upon its holding that the purpose of the Oregon "home rule" amendments is limited to a grant of "home rule" power to cities to legislate on matters of "procedure," but not as to matters of "substance," has adopted a much more complicated formula, involving the application of wholly different concepts, which may be summarized as follows:
This second rule, however, is subject to two exceptions which permit the state to still legislate as to matters of city "procedures."
No direct authority is cited by the majority in support of the foregoing formula or of the various propositions and distinctions which make up that formula, other than those relied upon by the majority as the basis for its holding that the purpose of the Oregon "home rule" amendments is limited to a grant to cities of "home rule" processes on matters involving the "structure" or "procedure" of city government.
The mere statement of such a complex formula as a test for determining whether any given matter is subject to the "home rule" power of cities, free from "interference" by the state legislature, reveals again how drastically the majority has shifted the "balance of power" by a limitation of such "home rule" power to a much smaller area than that existing for the past 40 years under the unanimous decisions by this court in Welch, Heinig and Woodburn. Under those decisions the cities had exclusive "home rule" power as to all matters of "local interest," the test of which was a determination whether the interest of the cities "predominates" over the interest of the state. Under the decision by the majority, however, the cities not only have no such "home rule" power as to any "substantive" matters, but even as to matters of city "procedure," the state can still legislate not only when there is a legitimate "state concern" over the protection of persons affected by such procedures, but also whenever the state legislature may, in its discretion, decide to enact a statute out of "concern with the living standards" of persons engaged by cities to operate or carry out city "procedure."
In addition, the mere statement of such a complex formula reveals that the majority, in abandoning the "balance of interest" test, has embarked upon "unchartered seas" and will now require the application of not only a more complicated formula, but the interpretation and application by the Oregon courts of at least equally general, but different, words and phrases, such as the following:
(1) Whether a state law is "addressed primarily to substantive social, economic, or other objectives of the state," as distinct from matters of "structure" and "procedure";
(2) Whether such a law was "clearly intended" by the legislature to prevail over city charters or ordinances;
(3) Whether such a law is "irreconcilable" with the freedom of a city to "choose its own political form";
(4) Whether, even if a state law is one which is found to be "addressed to a concern of the state with the structure and procedures of local government," it will
(5) Whether, in cases involving employees of cities, including those engaged to make operative their "procedures," the state has a legitimate "concern with the living standards" of such persons.
By way of contrast, the rule as established and recognized by this court for the past 40 years that the purpose of the Oregon "home rule" amendments was to make a grant to cities of exclusive power to legislate in local matters, without legislative interference, as held in Welch, and that the "test" to be applied in deciding whether any given matter is subject to that exclusive power is to determine whether the interest of the city "predominates" over that of the state, or vice versa, as held in Heinig and Woodburn, is in accord with and supported by many authorities.
Again, on this state of the record, it is unfair, in my opinion, for a bare majority of this court to abandon the test as long established and recognized by this court and to completely change the "rules of the game" in such a drastic manner, and by the adoption of a complex new formula of rules, without affording to the cities of Oregon a fair opportunity to be heard before doing so. (See 1223 above)
C. The jurisdiction of the courts.
As previously noted, since the unanimous holding by this court in Welch in 1936, all conflicts between the state legislature and the cities of Oregon over whether particular matters are subject to the exclusive "home rule" powers of cities as matters of "local concern" have been decided by the Oregon courts.
The majority opinion recognizes (at 1210) that the rule as later stated in Heinig "seemed to extend to all conflicts of state and local policy," but goes on to hold that "we do not think that article XI, section 2, extends that far." The majority then holds (at 1210) that the jurisdiction of the courts in "home rule" cases extends only to cases involving disputes between the state legislature
Although these statements may represent the political philosophy of the writer of the majority opinion, to me they are little more than rhetoric. The courts frequently apply a "balancing test" of weighing competing social interests under constitutional provisions which provide no more of a "standard." Examples, among others, are to be found in cases in which the courts must balance the interests of individuals as against the interest of the state in cases involving claims by individuals to freedom of speech,
Although the majority professes to find in "the citizens' interests in responsible government, * * *" a more definite standard of "comparable interests" for application in cases involving processes of local government, I fail to understand how that purported standard is more definite than a consideration of "local interest" and "state-wide" interest in cases involving substantive matters. In any event, "citizens' interest in responsible government, * *" does not provide a "constitutional standard," as stated by the majority to be required, much less a standard based upon any language in the Oregon "home rule" amendments. (See 7, above.)
By its unanimous decision in Heinig this court recognized that:
but went on to hold that:
This is in complete accord with the thinking and writing of many authorities.
Indeed, the view previously held by this court that it is for the courts to decide whether any particular matter is a matter of "local concern," so as to be subject to the exclusive "home rule" power of a city, is the generally accepted rule, as recognized by most authorities.
It may be admitted that this may not be a perfect test and that its application in some places may not be easy. But, as stated by Chief Justice Marshall, because cases may present difficulties is not a good reason for the courts to decline the exercise of jurisdiction. Indeed, to do so as the majority has done in this case, is not only to abdicate the jurisdiction of all Oregon courts over all "home rule" cases involving matters of substance, but is to "throw out the baby with the bath water" because the "bath water" is too "hot."
Again, the majority of this court has taken this drastic step despite the fact that no such contention is made by any party to these cases — all of which recognize the jurisdiction of this court to decide this case and that the basic issue to be decided is whether these two statutes involve matters of predominantly "local interest." It is not only unfair, but irresponsible, in my opinion, for a majority of this court to abdicate its jurisdiction to decide disputes between cities and the state legislature in all "home rule" cases involving "substantive matters," at least without first affording to the cities
D. The power of the state legislature.
As previously noted, since the unanimous holdings by this court in Welch in 1936 and in Heinig in 1962, it has been established that because the grant to cities of "home rule" powers emanates from the Oregon Constitution, the state legislature has no power to interfere with the exercise of such powers by either general or special laws and that, as a corollary, all disputes over claims of exclusive power by the state legislature over matters claimed by cities to be within these exclusive "home rule" powers are to be resolved by the courts.
The majority has held, however (at 1210, 1211), that the Oregon courts have no jurisdiction except in cases involving "processes" of local government, and that, as a corollary, in all cases involving matters of "substance," the "pursuit" by the state legislature of "its statewide social objective undeniably displaces the arrangements (or absence of arrangements) preferred by the local government." In other words, the state legislature now may enact whatever general laws it may please to enact in all matters of "substance," despite appeals by cities to the Oregon courts that such laws invade their exclusive "home rule" powers.
Thus, in effect, the majority has adopted a rule of "legislative supremacy" in all cases involving matters of "substance." This also includes cases such as this, in which city employees engaged to make operative the "processes of local government" are held by the majority (at 1213, 1214 and 1215) to be a proper subject of a state "concern" as a "social objective" and as a matter of "substantive policy."
As previously noted, state home rule constitutional provisions are of two general types: (1) those granting to cities "local autonomy," with exclusive power to legislate as to "local matters" and (2) those under which the "home rule" power of cities to legislate is subject to "legislative supremacy" by the enactment of general state laws. In effect, the holding by the majority that cities have exclusive "home rule" powers in the limited area of "procedure," while the state legislature still has "supremacy" in the broader area of "substance" is a "hybrid" based solely upon the holding by the majority that such was the intended purpose of the Oregon "home rule" amendments — a holding without basis either in precedent or in the terms of such amendments.
Again, as previously noted, this court held unanimously in Welch that under the terms of the Oregon "home rule" amendments the legislature has no power to "intermeddle" by general law in matters of "local concern." In so holding, this court adopted a view in accord with the views of many authorities to the effect that to adopt a rule of "legislative supremacy" is to make home rule powers depend solely upon "legislative grace" and that if the purpose of home rule is to grant cities freedom from interference by the state legislature it is hardly advisable to make the state legislature the "arbiter" of the state's disputes with the cities in such matters.
E. Application of the test in this case.
Instead of applying the test established in Heinig and Woodburn of seeking to identify and to "weigh in the balance" the interest of the city and that of the state in subject matter of ORS 237.610-237.640 and ORS 243.005-243.055, the analysis used by the majority in applying its new test (at 1212-1214) is to consider whether these statutes are "addressed primarily to a concern of the state with the modes [procedures] of local government or to substantive social, economic, or other regulatory objectives."
The conclusion reached by the majority (at 1215), after the application of this test is that these statutes are "of the second, substantive kind." The basis upon which that conclusion appears to rest is the holding by the majority (at 1212) that the statutes "embody a legislative concern with securing the postemployment living standards of persons in these occupations" (policemen and firemen), but that "[i]t is not essential to the legitimacy of this goal whether the legislature singled out police officers and firemen"; and that (as held at 1215) these statutes "address a social concern with the living standards of these classes of workers" and that "[v]arious categories of employees are not placed beyond the reach of the state's social legislation merely because their occupational functions * * * happen to be found in the public sector of local government."
In reaching this result the majority (at 1212) would also distinguish the previous decisions of this court in Branch v. Albee, 71 Or. 188, 142 P. 598 (1914), and in State ex rel. Heinig v. City of Milwaukie et al., 231 Or. 473, 373 P.2d 680 (1962). In Branch this court held invalid a state law requiring all cities with a population over 50,000 to establish a board of pensions and a pension fund for police officers and to pay them retirement benefits equal to one-half of their salaries upon retirement at age 60 after serving for 20 years, upon the ground that under the Oregon "home rule" amendments to Art. XI, § 2, and Art. IV, § 1a, the matter of pensions for policemen employed by a city was a "municipal" matter and that Art. IV, § 1a, conferred upon the voters of cities "full power to legislate for themselves as to all local, municipal matters." (See 71 Or. at 198 and 205, 142 P. at 601) In Heinig (at 481, 373 P.2d at 684) this court expressly reaffirmed Branch and held invalid a state statute which undertook to create municipal civil service commissions to supervise civil service systems for firemen and noted that there was "no substantial difference between the establishment of a pension system for city police [as in Branch v. Albee, 71 Or. 188, 142 P. 598 (1914)] and the establishment of a civil service system for city firemen."
The principal ground upon which the majority would distinguish Branch and Heinig (at 1212) is that the statutes involved in those cases undertook to create "agencies of local government" and that a law which "would have displaced the authority of the politically accountable local officials over the selection, assignment, discipline, and replacement" of city employees "by direction from the state" is "a substantially different interference with local self-government from an obligation to provide a measure of economic security to public employees."
It follows from the rationale of the majority opinion that the state legislature has the power to enact similar statutes under which cities would be required to provide pension benefits, including a $10,000 life insurance policy, to all of its "citizens" employed by all cities and counties, including
It may be true that the statutes involved in these cases do not require cities to establish new or different "agencies of local government." However, the effect upon the operation of city government of the rationale adopted by the majority as the basis for its opinion is equally drastic. Instead, the cities are required by ORS 237.620(1) to "become participants" in the state Public Employes' Retirement System with respect to "police officers and firemen employed by them." The fact that cities are thus required to "participate" in an existing state "agency," rather than to "establish" a new "agency of local government" can hardly provide a proper basis to support the conclusion by the majority that these statutes do not involve matters of "procedure" or "structure" of government, but instead involve matters of "substance." Also, a pension plan is as much a "process" and "procedure" of city government as is a civil service system.
Moreover, even as to the "processes" and "procedures" of city government, a city can perform and make operative such "processes" and "procedures" only through employees employed by them for that purpose. If a city is to have "home rule" even in this limited area it must have full control over such employees, including the right to hire and fire and to fix the consideration to be paid them. When the state undertakes to fix the compensation, including both wages and "fringe benefits," such as pensions and life insurance, which must be paid by cities to employees, its interference with the "processes" and "procedures" of city government is fully as serious as under state laws which would interfere with the "selection, assignment, discipline and replacement" of such employees — an interference which, according to the majority opinion (at 1213) would be improper. On the contrary, the state would appear to have a greater interest in the "selection" and "discipline" of city police officers engaged in the enforcement of state laws than in the particular amount of compensation to be paid to such officers, much less in a requirement that cities purchase $10,000 life insurance policies for the beneficiaries of all police officers.
As previously stated by a unanimous court in Heinig, with reference to state laws interfering with employment and discharge of city employees:
The state's interest in the amount of wages paid by a city to its employees is different than the interest of the state under statutes requiring that employees be covered by workers compensation, wage and hour standards, safety standards, nondiscrimination, or child labor laws, which are contended by the majority (at 1213) to involve "statewide social objective[s]" comparable to those contended by the majority to support the validity of these statutes. All of those statutes involve "statewide social objective[s]" in establishing minimum standards for all employees, whether public or private. These statutes, by contrast, do not require cities to provide pension benefits and a $10,000 insurance policy for all employees, whether public or private, but only for city employees and, indeed, only for city police officers and firemen. Moreover, the required pension benefits and $10,000 insurance policy can hardly be properly characterized as a "minimum" standard, at least in the same sense as provided under statutes requiring payment of minimum wages.
On the other hand, even under the test as previously adopted by this court in Heinig (and now repudiated by the majority) it is arguable that state laws requiring the payment of pensions to police officers and firemen may be held valid upon the ground that the interest of the state in the protection of its citizens by proper police and fire protection requires the payment of wages, and including such "fringe benefits" sufficient to attract and retain qualified policemen and firemen. In Heinig it was stated (231 Or. at 488, 373 P.2d at 688):
Indeed, although the cases are not without conflict, there are decisions by courts of other states holding that state laws requiring pension benefits for policemen and firemen involve such an interest of the state so as to prevail over that of the cities which employ them.
The majority is also critical of the Heinig test in stating (at 1213) that it is not "generally useful to define a `subject' of legislation and assign it to one or the other level of government," because to do so "misconceives the nature of a `state interest' to focus narrowly on the functions performed by particular groups of employees to the exclusion of a concern with the employees as citizens." Thus, according to the majority (at 1214), "the legislature may, if it so chooses, consider the interest of those who perform the job as well as the interests of those dependent on that performance."
This rhetoric is unclear, at least to me. While the majority may not consider it "useful" to consider problems of "home rule" in terms of the "subject," "subject matter" or "matter" of the legislation involved, such an approach to these problems is not only implicit in Heinig, but is the approach taken by many other courts and by other recognized authorities. See, e.g., 2 McQuillin, Municipal Corporations §§ 4.89 to 4.113 (3d rev. ed. 1966), and 1 Antieau, Municipal Corporation Law §§ 3.22 to 3.34 (1975), and the numerous cases cited therein.
Also, according to the majority (at 1213), "[a] search for a predominant state or local
Indeed, the majority itself engages (at 1210) in much the same analysis when it undertakes to list as "processes of city government" still subject to city home rule powers the following: "elections," "official accountability," "procedures of policy, planning and decision," "taxing and borrowing," "and the like."
Thus, because (as demonstrated above at 1232), the same result could be reached upon application of the test previously established by this court in Heinig and Woodburn, it becomes obvious that what the majority has done has been to use these cases as a vehicle for the adoption of new concepts and new tests which have drastic consequences in limiting the area of home rule left to the cities, despite the fact that they have not had a fair opportunity to be heard on these most important matters.
Indeed, the majority opinion may properly be characterized, in my view, as a "judicial tour de force."
III. The financial impact upon cities of the rule of "legislative supremacy."
Wholly aside from its finespun legal theory, and wholly as a practical matter, the majority opinion is simply "bad law," in my opinion. What the majority has done in adopting a rule of "legislative supremacy" as to all substantive matters, i.e., all matters which the legislature may deem to involve "societal policy," is to enable the legislature to require the cities of Oregon to adopt expensive social programs without being responsible for any part of the costs of such programs and without recourse to the courts in the event of "jurisdictional disputes." This would also appear to be true as to the counties of Oregon, according to the reasoning of the majority and the reference in its opinion (at 1210) to counties.
Indeed, it is a matter of common knowledge that the "lion's share" of the cost of the operation of a city government consists of wages, salaries and other compensation paid to its employees. It is also a matter of common knowledge that overextended pension benefits for the employees of a city may seriously endanger the financial solvency of a city, with its more limited sources of income, thereby putting in jeopardy its ability to perform any of the functions necessary for the protection and welfare of its inhabitants — witness the recent experience in New York City.
As stated by one writer:
The impact upon the cities is compounded because the legislature also in 1973, enacted
As previously noted, this court held in Heinig that in determining whether a given matter is one of "local concern," so as to be within the exclusive "home rule" powers of a city, the test is to determine whether the interest of the city or the interest of the state "predominates." Under that test, whether the city or the state is to pay the cost of a program, and its financial impact upon the city or state, would be at least one important factor to be considered by the court in deciding whether a given statute is valid or invalid as an invasion of the constitutional "home rule" power of a city.
Under the newly adopted rule, however, the legislature is left free, despite the "home rule" amendments to the Oregon Constitution, to adopt any statute involving any matter which it deems to be one of "societal policy," regardless of the cost imposed upon cities, without recourse by them to the courts, and without even a fair opportunity to be heard in these cases before the adoption of that new and drastic rule by a bare majority of this court.
The majority opinion, in my judgment, makes a mockery of the "home rule" amendments to the Oregon Constitution, under which the "home rule" grant to cities is subject only to "the constitution and criminal laws" of the state and initiative powers are reserved to the voters of cities "as to all local, special and municipal legislation of every character." It also leaves Oregon cities and counties with no complete remedy other than a campaign for the adoption of an initiative measure to amend the "home rule" provisions of the Oregon Constitution by provisions which may more clearly grant "home rule" to cities and counties over matters of local concern — an action which might well carry with it some hazard to legitimate and "predominating" interests of the state as a whole.
For all of these reasons, I am compelled to dissent from the opinion by the majority. Rather than attempt to summarize a dissenting opinion that is already too long, reference is made to the summary set forth at the beginning of this dissent.
HOWELL, Justice, dissenting.
I join in the dissent of my colleague, Justice Tongue, except that I do not subscribe to parts of the rhetoric used in the dissenting opinion.
BRYSON, Justice, dissenting.
I concur in the dissenting opinion of Justice Tongue wherein it would adhere to the policy and rule of law enunciated in State ex rel. Heinig v. Milwaukie et al., 231 Or. 473, 373 P.2d 680 (1962). In Heinig the state legislature enacted law requiring the home rule city to provide a civil service system for firemen. This court held it could not do so. We further held:
I also dissent from the majority opinion because it allows and encourages a violation of the Oregon constitutional and statutory provisions relating to real property taxes.
In this case the legislature enacted laws requiring that city police officers and firemen be brought under the state Public Employes Retirement System law or that the municipality provide an equal or better system. ORS 237.610-237.640. It also enacted statutes to provide life insurance for police officers and firemen. ORS 243.015 provides:
ORS 243.035 provides:
In other words, the state legislature is directing the city employer to include in its budget, and subsequently on the tax roll, an item to pay annual premiums.
ORS 291.342 and 291.344 together with ORS 311.657 and 311.658 provide for a state property tax to be collected through the counties and to be paid to the state treasury to insure payment of bonded indebtedness, interest and deficit. However, ORS 311.660(1) specifically provides:
Under ORS 311.660 the state clearly could not enact a pension and insurance program for local employees of the city of LaGrande and the city of Astoria by ordering the local cities to place the cost of these items in their budget. When the item is placed in the local cities' budgets, it becomes a tax levy on real property. By ordering the local governments to fund such a program in the above manner, the state has indirectly levied property taxes for that purpose since the property tax is the chief source of revenue for local governments, and in many instances of small cities it is the sole source of revenue. The state is thus doing indirectly what the statute specifically forbids it to do directly. Such legislation here involved also violates Article XI of the Oregon constitution:
Pursuant to the above, if the state desired to mandate certain items of payment, such as premiums for police and firemen insurance policies, it must provide the funds to do so. This could be done out of the general fund or it could provide a state "tax base" and levy a state general tax, but if it was outside of the six percent limitation it would have to obtain the voters' approval. The state, in enacting the legislation objected to in this case, has not followed this statutory and constitutional procedure. Instead, it has taken advantage of the local governments' tax bases and other property tax machinery to fund state mandated programs. In other words, the state is doing indirectly what the constitution says it cannot do directly without following specified procedures.
The "home rule" Oregon constitutional provisions
The rule of "legislative supremacy," with its financial impact on cities, as adopted by the majority, is also contrary to the law generally in "home rule" states. As stated in 2 McQuillin, Municipal Corporations 248-50, § 4.159 (3d ed. 1966):
In "home rule" states, however, the rule is otherwise, as stated by McQuillin in § 4.160 at 251.
Alternatively, as stated by another writer:
In City of Portland v. Welch, 154 Or. 286, 296, 59 P.2d 228, 292 (1936), the court stated:
More recently, in Olsen v. State of Oregon, 276 Or. 9, 554 P.2d 139 (1976), involving the validity of the Oregon system of school financing, this court discussed and approved the concept of "local control" as follows:
The rule laid down by the majority opinion adopts the theory of "legislative supremacy." This was the state of the constitutional law prior to adopting the "home rule" provisions in the constitution. Therefore, it is difficult to conceive what the voters accomplished in adopting the home rule provisions if interpreted in accordance with the majority opinion.
It is common knowledge that local governments are now near the end of their financial resources. Budgets outside the six percent limitation are submitted to the voters two and three times before some are passed — some are never approved. As a result, local governments must stay within strict budgetary limits. The problems presented in this case would not arise if the state would provide financing to fund its mandated programs, but as long as the state, under the majority opinion, has the power to require the local governments to fund state mandated programs, this inequity will probably continue. The state gets the credit for the programs — sometimes enacted by heavy lobbying — and the local government and property owners or renters pay the bill.
Woe will be the day when the citizens who pay real property taxes realize why their local taxes keep rising — as a result of state mandated legislation. Their indignation will be vented against such legislative action requiring further taxation and higher taxes on local real property. If the legislature desires to enact legislation to provide benefits for one group of citizens it must pay for the same from the general fund.
For all of the above reasons, I dissent from the majority opinion and would affirm the circuit court judges and the Court of Appeals, which held the aforementioned legislation unconstitutional.
In these cases, we conclude that a sufficiently adverse interest exists between the plaintiff cities and the defendant employee groups and state agencies.
Another amendment in 1958 extended to counties the authority to form their own charters and the voters' powers of initiative and referendum. Or.Const. art. VI, § 10.
For an example of the opposite issue, a challenge to local procedure on the ground that the subject was one of statewide concern, see Allison v. Washington County, 24 Or.App. 571, 548 P.2d 188 (1976).
In one recent fiscal year, for instance, Oregon cities received a total of $223 million from their own taxes, fees, utility revenues, and other sources but also $91 million in revenues from various federal, state, county, and district sources. Bureau of Governmental Research and Service, School of Community Service and Public Affairs, University of Oregon, Revenue Sources of Oregon Cities, Fiscal Year 1973-74, at 6-7 (Apr. 1975); see, e.g., Or. Laws 1977, ch. 831, which transferred an additional 14 percent of state liquor revenues to the cities for general purposes, beyond a prior 20 percent share. ORS 471.810. From the other perspective, a conservative listing of transfer payments from the state to cities and counties in the 1977-79 biennium would total at least $245 million. This includes sharing of revenue from gasoline taxes, highway use taxes, cigarette taxes, the Oregon Liquor Control Commission, the Oregon Racing Commission, and other specified sources and, in addition, general fund expenditures for programs such as community corrections, mental health, land use planning, public safety, and public transit. It does not include many other state payments to local agencies for local purposes, such as payments to school, port, transit, and other special districts and local councils of government. See Budget and Management Division, Oregon Executive Dep't, Adopted Budget, Fifty-Ninth Legislative Assembly, 1977-79 at 67-76 (Dec. 1, 1977).
See also Vanlandingham, Municipal Home Rule in the United States, 10 Wm. and Mary L.Rev. 269 (1968).
"* * * The virtual unanimity with which they have arrived at this conclusion reflects, in part, rejection of the distrust of municipal government which has traditionally marked American politics * * * in part, it also reflects a consensus that alternative methods of providing municipal powers are unsatisfactory.
"Ultimately, the argument for a broad grant of municipal initiative rests upon the desirability of permitting municipalities to govern generally, rather than limiting them to the exercise of particular functions. * * *."
In California an almost identical constitutional amendment was adopted in 1879. Constitution of California, Art. XI, § 6 (1879), but the words "subject to and controlled by general laws" were literally construed by the California courts, with the result that in 1896 that provision was amended to add the express qualification "except in municipal affairs." Constitution of California, Art. XI, § 6 (1896).
In Washington a constitutional provision similar to that of the original California provision was adopted in 1889 and was also construed literally, so as to provoke the comment that home rule in Washington was "largely a matter of legislative grace." Constitution of Washington, Art. XI, § 10 (1889); McBain, The Law and Practice of Municipal Home Rule 455-56 (1916).
In Minnesota the constitutional provision adopted in 1896 was more specific in providing that "[t]he legislature may provide by general laws relating to affairs of cities * * *." Constitution of Minnesota, Art. IV, § 36 (1898). In Colorado a constitutional amendment was adopted in 1902 conferring upon the people of the City and County of Denver "the exclusive power in the making, altering, revising or amending their charter * * *." Constitution of Colorado, Art. XX, § 4 (1902), but was not construed in any definitive opinions by the Colorado courts prior to 1906, when "home rule" was adopted in Oregon. McBain, The Law and Practice of Municipal Home Rule 505-26 (1916). But see People ex rel. Attorney General v. Johnson, 34 Colo. 143, 86 P. 233 (1905).
The application of the test, as stated in Heinig (State ex rel. Heinig v. Milwaukie et al., 231 Or. 473, 373 P.2d 680 (1962)), was well described by Chief Judge Schwab in City of Hermiston v. ERB, 27 Or.App. 755, 761, 557 P.2d 681, rev. on other grounds, 280 Or. 291, 570 P.2d 663 (1977), as one which requires the Oregon courts to
"* * * (1) identify the city's interest; (2) identify the state's interests; and (3) balance them to determine which predominates."
"* * * [W]e conclude that the authority of the city to legislate relative to matters germane to purely municipal affairs has been derived not from the legislature but from the constitution itself. If that is a sound conclusion, can it be true that the legislature, under the guise of a general law, can interfere with the exercise of such right? We take it to be fundamental that the legislature could not do so through the enactment of a special law. Hence, what the legislature can not do directly it can not do through indirection." and (at 296, 59 P.2d at 232) that:
"* * * A law general in form can not, under the constitution, deprive cities of the right to legislate on purely local affairs germane to the purposes for which the city was incorporated," going on to cite previous decisions of this court to the same effect.
"* * * What is called for is an open discussion of whether the concern of the people of the entire state is greater, in a particular instance, than the concern of the local residents. This will certainly mean that even though certain large areas are ordinarily labelled one or the other, subareas therein may call for a different decision. This has been captured very well by the Oregon Court which first acknowledged that fire protection is traditionally said to be a `state' concern, but then went on to hold that the determination of the kinds of uniforms to be worn by city firemen was a matter for the people of the municipality to decide, since they were concerned and the people of the entire state had no discernible interest in the matter."
Also of interest is the following statement from 2 McQuillin, Municipal Corporations 161-62, § 4.85 (3d rev. ed. 1966):
"General definitions of `municipal affairs' and `state affairs,' within the meaning of the rules governing legislative control of municipal corporations above outlined, have occasionally been announced in judicial decisions, although frequently courts deliberately refuse to define these terms, in order that each case as it arises may be considered upon its own facts and circumstances, without the complication of prior pronouncements upon the attributes of the one or the other category of `affairs.' This unwillingness or inability to designate with certainty a line dividing the two classes of matters, and, indeed, the futility of attempts to do so, are clearly demonstrated by the conflicting and inharmonious decisions upon particular matters as belonging in the `municipal' or in the `state' class of affairs."
Decisions by other courts are of limited assistance because of differing constitutional provisions for "home rule." It appears, however, that the "predominate interest" test, as adopted by this court in Heinig, is consistent with the test adopted in other states with similar constitutional provisions for "home rule." See, e.g., Apodaca v. Wilson, 86 N.M. 516, 525 P.2d 876, 881-82 (1974); City of Tucson v. Tucson Sunshine Climate Club, 64 Ariz. 1, 164 P.2d 598, 602 (1945); Michelson v. City of Grand Island, 154 Neb. 654, 48 N.W.2d 769, 775 (1951); Moore Funeral Homes, Inc. v. City of Tulsa, 552 P.2d 702, 704 (Okl. 1976); State ex rel. Brelsford v. Retirement Board, 41 Wis.2d 77, 163 N.W.2d 153, 157 (1968); City of Joplin v. Industrial Commission of Missouri, 329 S.W.2d 687 (Mo. 1959).
See also Sharp, Home Rule in Alaska: A Clash Between the Constitution and the Court, 3 UCLA-Alaska L.Rev. 1, 51 (1973).
"* * * Characterization of the issues as political, upon which all can agree, does not establish the wisdom or necessity of denying the judiciary a role. The question to be answered is not whether an issue is political, for courts are regularly charged with the responsibility of deciding political issues, but whether it is the type of political issue toward the resolution of which the courts can make a contribution." (Emphasis added) and (at 721):
"Inevitably, the role suggested for the courts requires the exercise of judgment — and self-restraint — on their part. The argument that judges ought not to be entrusted with the responsibility of identifying basic values, however, is not lacking in irony in view of their generally accepted power to invalidate legislation on constitutional grounds. A community which trusts its judges to review all legislation for consistency with the constitution confers no greater power on them by authorizing the invalidation of novel municipal powers inconsistent with basic values, whatever the ambiguity of that phrase. * * *"
To the same effect see Vanlandingham, Constitutional Home Rule Since the AMA (NLC) Model, 17 Wm. and Mary L.Rev. 1, 27, 31 (1975).
See also Vanlandingham, supra n. 6, at 1; Bromage, Home Rule — NML Model, 44 Nat'l Mun. Rev. 132, 136 (1955).
As stated by another writer, in criticizing the rule of "legislative supremacy" under some state home rule constitutions,
"* * * If the states had deliberately set out to destroy the grass roots of democracy, they could hardly have invented a more effective device for doing so than the system of legislative tutelage which many of them employ." Mott, Strengthening Home Rule, 39 Nat'l Mun.Rev. 172 (1950).
To the same effect, as stated by still another writer:
"Historically, the state legislature, jealous of its legislative prerogatives, seldom has been an ardent advocate of home rule. * * *" Vanlandingham, supra n. 6, at 22.
Again, to the same effect:
"One of the major objectives of home rule is to prevent legislative interference with local government. * * *
"* * * Government by remote control is seldom satisfactory government. And when the government agency is a legislature in which the cities have but minority representation, its evils grow like the green bay tree. * * *" Mott, Home Rule for American Cities, American Municipal Association 11 (1949).
"* * * Generally, except where otherwise provided by the constitution, matters of purely local concern are exempt from conflicting state legislation, but state laws control as to matters not purely of local concern, generally referred to as state affairs."
and, at § 4.78:
"So far as legislative control is concerned, state constitutions, state statutes, municipal charters, and decisions of the courts often employ, without definition, various terms to distinguish between (1) matters principally pertaining to the state at large, and (2) matters of purely local concern. * * *"
To the same effect, see 1 Antieau, supra n. 23, §§ 3.21 to 3.40.
As also stated by the same writer:
"* * * If a legislature were to levy a tax directly on the cities the public objection would be tremendous. But when a police pension bill is before the legislature the opposition may not be able to make itself heard. The policemen's organization maintains a powerful lobby and the public usually fails to see the effect of the law on the local budget. Furthermore, the legislature by passing this bill can please a special group of voters without being required to levy the taxes necessary to pay the costs. Sound public finance requires that the same agency which orders the expenditure be responsible for raising the money.
"It is time to recognize that our cities have come of age, that they are equal partners in the gigantic business of government in America, and that our democratic institutions can be strong only if our local communities are given full responsibility for managing their own affairs. * * *" Mott, Strengthening Home Rule, 39 Nat'l Mun.Rev. 172, 177 (1950).
See also Vanlandingham, supra n. 6, at 20, and Witt, State Regulation of Local Labor Relations, The Demise of Home Rule in California?, 23 Hastings L.J. 809, 816 (1972).
"(5) The initiative and referendum powers reserved to the people by subsections (2) and (3) of this section are further reserved to the qualified voters of each municipality and district as to all local, special and municipal legislation of every character in or for their municipality or district. The manner of exercising those powers shall be provided by general laws, but cities may provide the manner of exercising those powers as to their municipal legislation. * * *" (Emphasis added.)
"* * * The legal voters of every city and town are hereby granted power to enact and amend their municipal charter, subject to the Constitution and criminal laws of the State of Oregon * * *."