Wednesday, March 3, 2010
C.A. Upholds Use of Line-Item Veto to Cut Medical Care Funds
By KENNETH OFGANG, Staff Writer
Gov. Arnold Schwarzenegger acted within his constitutional authority when he exercised a line-item veto last year that cut funding for health care programs, the First District Court of Appeal ruled yesterday.
In denying a writ of mandate sought by health care providers and clients of state-provided services, Div. Two ruled that the line-item veto provision of Art. IV, Sec. 10 of the state Constitution allows the governor to further reduce mid-year reductions to appropriations earlier made in the annual budget act.
At issue were some of the $448 million in cuts made by the governor to 27 line items within AB 4X 1. That bill was enacted in July of last year in response to the fiscal emergency declared by the governor based on the worsening economic conditions that were preventing the state from realizing the revenue assumptions on which the 2009 Budget Act were based.
The cuts made by the governor were criticized by legislators, led by Senate President Pro Tem Daryl Steinberg, D-Sacramento, and then-Assembly Speaker Karen Bass, D-Los Angeles. The critics said the governor was invading the Legislature’s authority after a hard-fought compromise that had led to $15.6 billion in cuts and $8.6 billion in taxes, borrowing, deferrals, and other adjustments that lawmakers included in the bill.
Reduction of Appropriation
The petitioners—and the legislators, labor and political groups, and others who intervened or filed amicus briefs supporting them—had argued that a reduction of a previous appropriation is not itself an “item of appropriation” to which the line-item veto applies. But Presiding Justice J. Anthony Kline, writing for the Court of Appeal, said the governor’s action represents the type of budget-cutting that the constitutional provision envisions.
“By increasing the Legislature’s reduction, the Governor decreases the size of the appropriation,” Kline wrote. “What matters is not whether the Governor’s act is seen as affirmative or negative, but its purpose and practical effect.”
Citing the ballot argument in favor of Proposition 12, the November 1922 measure that created the line-item veto, the presiding justice wrote:
“The difference of opinion between the Legislature and the Governor was not whether the amount of particular items of appropriation enacted in the 2009 Budget Act needed to be reduced, but the magnitude of the reductions. What mattered in the end were the amounts set aside for particular purposes; the Legislature wanted higher amounts than did the Governor. While the Governor’s line-item vetoes may be said to have ‘increased’ the reductions made by the Legislature as to the items at issue, the most significant effect of the vetoes, and their purpose, was to further reduce the amounts set aside by the Legislature. The Governor’s wielding of the line-item veto was therefore quintessentially negative, as it lowered the cap on the spending authority for specified purposes, providing precisely the type of check on the Legislature intended by the constitutional initiative that adopted the line-item veto, empowering the Governor ‘to reduce an appropriation to meet the financial condition of the treasury.’”
The showdown over the separation of powers saw three of the state’s four living ex-governors—Republicans George Deukmejian and Pete Wilson and Democrat Gray Davis—join with business groups in an amicus brief supporting Schwarzenegger. The remaining ex-governor, Jerry Brown, defended Schwarzenegger in Brown’s current capacity as attorney general.
Kline, who served six years as legal affairs secretary in Brown’s administration before the then-governor appointed him to the bench, distinguished Harbor v. Deukmejian (1987) 43 Cal.3d 1078, in which the Supreme Court struck down the governor’s purported veto of a section of a “trailer” bill.
The Legislature normally passes such bills in order to conform substantive law to the budget. The Harbor case involved amending the law governing the Aid to Families with Dependent Children program, changing the date on which benefit payments were to begin.
Deukmejian, who used a line-item veto to reduce AFDC funding, attempted to use the same authority to veto that section of the trailer bill, while signing the bill itself into law. But the high court said there was no authority for a line-item veto of a change in substantive law.
Here, Kline contrasted, the line items in question related to spending, not substantive law, and were thus subject to Art. IV, Sec. 10.
“Whether spending authority is increased or decreased, it is still spending authority,” the presiding justice wrote, citing Harbor and other cases. “Although described as reductions in specified items and sections, the amounts set aside in Assembly Bill 4X 1, nevertheless direct the ‘specific setting aside of an amount, not exceeding a definite fixed sum, for the payment of certain particular claims or demands....”
The case is St. John’s Well Child and Family Center v. Schwarzenegger, A125750.
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