576 P.2d 1204 (1978) 281 Or. 137

CITY OF LA GRANDE, a Municipal Corporation, Respondent,
v.
PUBLIC EMPLOYES RETIREMENT BOARD OF THE STATE OF OREGON, Clay Myers, As Secretary of State of the State of Oregon, La Grande Police Association, and La Grande Firefighters' Union, Local No. 924, International Association of Firefighters, American Federation of Labor, Congress of Industrial Organization, Canadian Labour Congress, Petitioners. City of Astoria, a Municipal Corporation, Respondent,
v.
Public Employes Retirement Board of the State of Oregon, Lester L. Rawls, As Insurance Commissioner of the State of Oregon, Leander Quiring, As Director of the Department of General Services of the State of Oregon, Clay Myers, As Secretary of State of the State of Oregon, Policemen and Firemen of the City of Astoria, As a Class, Petitioners.

Supreme Court of Oregon, In Banc.

Argued and Submitted July 12, 1977. Decided January 31, 1978.

*1205 Gary K. Jensen, Eugene, argued the cause and filed a brief for petitioners Policemen and Firemen of the City of Astoria, as a class.

Al J. Laue, Sol. Gen., Salem, argued the cause for petitioner Public Employes' Retirement Board of the State of Oregon. With him on the brief were Lee Johnson, *1206 Atty. Gen., and W. Michael Gillette, Sol. Gen.

Ross E. Hearing, La Grande, argued the cause and filed a brief for respondent City of La Grande.

D. Richard Fischer, Astoria, argued the cause for respondent City of Astoria. With him on the brief was Robert C. Anderson of Anderson, Fulton, Lavis & Van Thiel, Astoria.

James M. Mattis, Eugene, Sp. Counsel for amici curiae, Edward C. Harms, Jr., City Atty., Springfield, J.B. Bedingfield, Jr., City Atty., Coos Bay, Charles A. Phipps, City Atty., The Dalles, John H. Hammond, Jr., Oregon City, City Atty., Gladstone, J.D. Bailey, Hillsboro, City Atty., Tigard, L. Charles Purvis, St. Helens, City Atty., Rainier, and Earl McFarlan, City Atty., Sweet Home, filed a brief for seven Oregon cities as amici curiae.

LINDE, Justice.

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.^[1] Astoria also challenged the statutory requirement of insurance coverage. The cities claim that by requiring them to provide police officers and firemen with retirement and insurance benefits the legislature has invaded a domain reserved to local discretion by the Oregon Constitution. The respective trial courts agreed with this claim. The Court of Appeals affirmed in a consolidated appeal, 28 Or. App. 9, 558 P.2d 1236 (1977). In granting review, we specifically asked the parties to discuss these questions:

1. In State ex rel. Heinig v. Milwaukie et al, 231 Or. 473, 373 P.2d 680 (1962), this court announced a test to be used in determining when the state can legislate on a matter of local concern. Should the Heinig test be refined or reconsidered and, if so, in what way?

2. If the Heinig test is refined or reconsidered, what criteria might apply to define areas of state or local concern in the context of employe relations and employe benefits?

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.

*1207 I

The issues in these cases arise from two provisions of the Oregon Constitution that together provide "home rule" for cities and towns.^[2] Enacted together by initiative amendment in 1906, they appear in two places in the constitution. The pertinent part of article XI, section 2, provides:

The Legislative Assembly shall not enact, amend or repeal any charter or act of incorporation for any municipality, city or town. 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,

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."^[3]

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;^[4] (2) the validity of a state law in the absence of a contrary local act;^[5] (3) the validity of a local act said to conflict with a state law;^[6] or (4) the validity of a state law said to conflict with a local act.^[7] To reduce the effect of the amendments on local authority and their effect on the state's authority to a single formula would only obscure the fact that these are two different questions.

It is useful to recall the role of the amendments in the state's constitutional arrangements. With respect to local authority, *1208 their central object is 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. Thus the validity of local action depends, first, on whether it is authorized by the local charter or by a statute, or if taken by initiative, whether it qualifies as "local, special [or] municipal legislation" under article IV, section 1(5); second, on whether it contravenes state or federal law. With respect to a state law, or action taken under it, on the other hand, it is elementary that the legislature has plenary authority except for such limits as may be found in the constitution or in federal law. Thus the validity of a state law vis-a-vis local entities does not depend upon a source of authority for the law, nor on whether a locality may have authority to act on the same subject; it depends on the limitations imposed by article XI, section 2, supra.^[8]

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,^[9] the qualification and selection of local government personnel,^[10] taxation and finance^[11] or judicial procedures.^[12]

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,^[13] with Chief Justice McBride, who had been a main sponsor of the 1906 amendments, in dissent. This led the court soon after to undertake a thorough review of the text and history of these still recent amendments, in a unanimous opinion by Justice Harris. Rose v. Port of Portland, 82 Or. 541, 162 P. 498 (1917). The origin of the amendments, the court found, had been the desire of local communities to enact their own charters and ordinances without having to secure action from the state legislature. The proposal, circulated by a committee that included W.S. U'Ren and Chief Justice McBride and that later organized *1209 itself as the People's Power League of Oregon, was accompanied by a statement describing the existing situation to be remedied:

"The usual method of making city charters in the past has been, in this state, for a few men to agree on the charter they wanted for the city. Then it was introduced in the legislative assembly by one of their county members. It was referred to a committee consisting of the members from his county, reported favorably, of course, and enacted by unanimous consent of the legislature. No other member ever sees or cares anything about it...." 82 Or. at 560-561, 162 P. at 504.^[14]

The court's opinion continued:

An examination of the public prints issued at that time discloses that the idea which was uppermost in the minds of all was to take from the legislature the power to make a charter for a city or town by a special law. The evil sought to be removed was the making of a single charter for a single city by a few men who agreed "on the charter they wanted for the city." The suggestion was nowhere made that evils were necessarily involved in the enactment of general laws which affected all the cities and towns alike. Indeed, comparatively few general municipal laws had been passed; and it is a noteworthy fact that most of the general municipal legislation was admittedly meritorious, for example, the Bancroft bonding act. While the farmers of Klamath County might not be interested in a law which applied only to Portland and the Columbia River fishermen might not be concerned in the charter or ordinances of Lakeview, yet, both the Klamath County farmers and the Columbia River fishermen might be vitally interested in a general law which expressed a state-wide policy concerning municipalities, and that interest might be just as vital as their interest in a law affecting all road districts, or all school districts or all counties. Id. at 561-562, 162 p. at 504.

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 *1210 that this fact of itself took the law outside article XI, section 2. Instead, Justice O'Connell wrote,

we now expressly hold that the legislative assembly does not have the authority to enact a law relating to city government even though it is of general applicability to all cities in the state unless the subject matter of the enactment is of general concern to the state as a whole, that is to say that it is a matter of more than local concern to each of the municipalities purported to be regulated by the enactment. Borrowing the language from Branch v. Albee, 71 Or. 188, 193, 142 P. 598, 599 (1914), we hold that the people of a city are not "subject to the will of the legislature in the management of purely local municipal business in which the state at large is not interested, and which is not of any interest to any outside the local municipality." 231 Or. at 479, 373 P.2d at 683.

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.^[15]

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.^[16] They were the historical reason for *1211 the adoption of the constitutional amendments, as reviewed above. When a comparison of competing policies is pressed beyond this to all conflicts between state and local acts, however, it must often involve a choice among values that have no common denominator either in or outside the constitution. There is no agreed common measure to "weigh" or "balance," for instance, an esthetic environment against commercial profit, see Oregon City v. Hartke, 240 Or. 35, 400 P.2d 255 (1965), or the prevention of caries against strongly felt objections to fluoridation of the water supply, see Baer v. City of Bend, 206 Or. 221, 292 P.2d 134 (1956), if state and local policy should differ on such matters.^[17] Such choices are the essence of political, not judicial, decision.

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^[18] of local conditions by a statewide law unless that intention is apparent. See, e.g., Terry v. City of Portland, 204 Or. 478, 269 P.2d 544 (1954); City of Portland v. Duntley, 185 Or. 365, 203 P.2d 640 (1949); City of Coos Bay v. Aerie No. 538, 179 Or. 83, 170 P.2d 389 (1946); Lyons v. City of Portland, 115 Or. 533, 235 P. 691 (1925). However, when a local enactment is found incompatible with a state law in an area of substantive policy, the state law will displace the local rule. See, e.g., Winters v. Bisaillon, 152 Or. 578, 54 P.2d 1169 (1936), holding that the State Motor Vehicle Act displaced local speed limits and overruling a prior holding that city authority is paramount;^[19]Southern Pac. Co. v. Consolidated Freightways, Inc., 203 Or. 657, 281 P.2d 693 (1955) (same as to trains); Lovejoy v. City of Portland, 95 Or. 459, 188 P. 207 (1920) (licensing insurance agents); City of Woodburn v. Public Service Comm'n, 82 Or. 114, 161 P. 391 (1916) (utility rates); City of Klamath Falls v. Oregon Liquor Control Comm'n, 146 Or. 83, 29 P.2d 564 (1934) (liquor regulation); Fischer v. Miller, 228 Or. 54, 363 P.2d 1109 (1961) (hunting regulations). No state law in an area of substantive policy has ever been held subordinate to a contrary local rule since Kalich v. Knapp, note 19, was overruled.

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.

*1212 II

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.^[20] In the present cases, the City of La Grande had undertaken a pension and retirement program for its employees through a private contractor, and Astoria had provided retirement benefits for its employees through collective bargaining. Since it is not claimed that either scheme was unauthorized by the respective charters, they will be treated the same as their underlying charters for the purpose of examining whether an inconsistent state law unconstitutionally alters the cities' mode of government.^[21]

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.^[22] Not surprisingly *1213 the court, noting that Portland was the only city with more than 50,000 inhabitants, found this to be "an attempt to amend, by indirection the charter of the City of Portland" in the manner customary before the 1906 amendments. 71 Or. at 201, 142 P. at 602.^[23] Similarly, while the statute involved in Heinig did not single out one city, it also undertook by the act itself to create municipal civil service commissions, to be composed of three members selected in the manner prescribed by the act, which would be charged with supervising civil service systems, for firemen. Even apart from this direct prescription of an element in the city's administrative structure, the civil service law would have displaced the authority of the politically accountable local officials over the selection, assignment, discipline, and replacement of the employees for whose performance they were responsible, and done so not as a matter of the community's policy or negotiated agreement but by direction from the state. This is a substantially different interference with local self-government from an obligation to provide a measure of economic security to public employees. Thus the act was held to be an intervention into the powers of appointment, transfer, and discharge of personnel specified in the Milwaukie city charter, unjustified by any independent statewide concern, and therefore in violation of article XI, section 2.

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.

III

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.^[24] But if these doubts can be made to disappear by defining the "subject" of the same laws to be safety, or nondiscrimination, or job security, the definition merely marks the desired conclusion of an argument rather than its premise.^[25] A search *1214 for a predominant state or local interest in the "subject matter" of legislation can only substitute for the political process to which we have referred the court's own political judgment whether the state or the local policy should prevail.^[26] Moreover, as the foregoing examples show, it 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. The "state" as such has no interest apart from that of its inhabitants, present and future; and the legislature may, if it so chooses, consider the interests of those who perform the job as well as the interests of those dependent on that performance.^[27]

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.^[28]See South of Sunnyside Neighborhood League v. Board of Comm'rs, 280 Or. 3, 569 P.2d 1063 (1977). The modern addition of home rule for counties would create additional complexities in employing a geographic criterion for allocating mutually exclusive constitutional authority.

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.^[29]

*1215 Thus neither the form in which the local policy is cast, nor the "subject" of the state law, nor the existence of local boundaries can by itself determine the validity of a statewide law. Instead, we conclude that the following principles for resolving a conflict between such a law and an inconsistent local provision for the conduct of city government are consistent with our past interpretations of the "home rule" amendments:^[30]

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.^[31] In that case, such a state law must yield in those particulars necessary to preserve that freedom of local organization.

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.

Reversed.

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" *1216 amendments to the Oregon Constitution granted to Oregon cities exclusive power to legislate as to all matters of "local interest," i.e., a grant of "local autonomy," free from intervention by the state legislature, and with the courts as the arbiters of disputes between cities and the state as to what are matters of "local interest." (See 1218 to 1220, 1220 to 1221.)

(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"^[1] and to "carve out an area in which the municipality enjoys a measure of local autonomy free from legislative interference or control * * *."^[2]*1217 It has also been recognized, however, that "[h]ome rule does not mean, and has never been intended to mean, complete local autonomy within the states, because home rule cities must always remain integral parts of state government and must assume, like non-home rule cities, responsibility for enforcement of state law," but that, "[o]rdinarily, a home rule grant transfers authority from the state legislature to the municipalities to enact measures of purely municipal concern."^[3] Thus, it has been more accurately stated that "home rule" is a method for "distribution of power by the people between two levels of government — state and local."^[4]

According to a recognized authority on this subject:

"Almost without exception, modern students of municipal affairs have urged the desirability of a broad grant of municipal initiative through the mechanism of home rule. * * *"^[5]

The problem, as recognized by another writer, is

"* * * to devise a home rule scheme whereby the city and state have a maximum degree of freedom to act on community problems, separately or together, while at the same time providing for the resolution of jurisdictional conflicts."^[5a]

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.^[6]

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.^[7]

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.^[8]

*1218 In view of the problems arising under the "home rule" amendments to the Missouri, California and Washington constitutions (which granted to cities the power to adopt charters "consistent with and subject to the constitution and laws of this State"), and also in view of the subsequent amendment to the California Constitution with a specific grant relating t