Metropolitan News-Enterprise


Monday, February 28, 2011


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C.A. Upholds Schwarzenegger Veto of Mental Health Funding


By a MetNews Staff Writer


Then-Gov. Arnold Schwarzenegger acted within his authority when he vetoed nearly $133 million in funding for local mental health agencies last October, this district’s Court of Appeal ruled Friday.

Div. Three, in an opinion by Justice Walter Croskey, rejected a writ petition by the California School Boards Association and the Los Angeles and Manhattan Beach school districts, which contended that the governor cannot use his line-item veto power to eliminate funding for a state-imposed mandate on local governments, thus forcing suspension of the mandate.

The challenge arose from the governor’s veto of a $132.941 million appropriation in the 2010-2011 State Budget Act to permit community mental health agencies to provide services mandated by AB 3632. AB 3632 shifted responsibility for certain education-related services provided to children with disabilities from state and local educational agencies to the Department of Mental Health and community mental health agencies.

Proposition 4, enacted in 1979, requires the state to reimburse local governments whenever the Legislature mandates that they provide new services or a higher level of service, subject to limited exceptions. If the state does not appropriate the necessary funds, the mandate must be suspended.

With respect to the 2010-2011 budget, the state controller determined that the cost to local governments to comply with their mandated responsibilities under AB 3632 was $132.941 million, and the Legislature included those amounts as part of a $216.336 million appropriation to enable localities to comply with 22 listed mandates.

In vetoing the AB 3632 funding, Schwarzenegger explained:

“My policy is to suspend mandates not related to elections, law enforcement, or property taxes in order to maintain a prudent General Fund reserve.

I am reducing this item by $132,941,000 by deleting [the AB 3632 mandate].   This mandate is suspended.”

As a result of the veto, several local mental health agencies notified local education agencies, including the petitioners, that they would no longer provide AB 3632 services unless the education agencies paid for them.

Multiple Suits

Besides the mandate petition, two lawsuits were filed—one in Sacramento Superior Court and one in the U.S. District Court for the Central District of California—relating to the veto. The plaintiffs in the federal suit argue that failure to appropriate the funds violates the Individuals With Disabilities Education Act and other federal laws; the Sacramento action was brought by county mental health agencies seeking a judicial declaration that the mandate is suspended.

Both of those suits are pending.

Croskey, writing for the Court of Appeal, said the appropriation was subject to the line-item veto.

He rejected the petitioner’s argument that the governor could not eliminate the AB 3632 funds without vetoing the entire $216.336 million granted by the Legislature to comply with state mandates.

Noting that the Legislature was required either to appropriate the funds necessary to comply with AB 3632 or suspend it, Croskey wrote:

“That the Legislature did not use the language of a specific appropriation of $132,941,000 with respect to this mandate does not render the Legislature’s act any less of an appropriation. “

He elaborated:

“The Legislature could not simply make a lump-sum appropriation of $216,336,000 (or any other amount) for ‘mandate reimbursement’ and leave it to the Controller to determine which mandates were to be reimbursed, and in what amounts.  The Legislature was constitutionally required to make a choice, with respect to each mandate, between an appropriation of the full reimbursement payment due or nothing at all.  It did so, choosing to make the appropriation.  The Legislature cannot shield an appropriation from the Governor’s veto simply by not using the language of an appropriation in the Budget Bill.”

Argument Rejected

The justice also rejected the argument that Proposition 1A, a 2004 constitutional amendment requiring “the Legislature” to appropriate any funds needed to comply with a prior mandate, or to suspend that mandate “for the fiscal year for which the annual Budget Act,” precludes a gubernatorial veto of any such appropriation.

Proposition 1A, the jurist explained, was enacted to end a practice by which lawmakers had previously appropriated nominal sums, leaving local governments with mandated obligations well beyond their current appropriations, which the state then reimbursed over periods of up to 15 years.

The language of Proposition 1A, Croskey said, must be interpreted to mean that the choice of whether to provide reimbursement or to suspend the mandate belongs not to the Legislature alone, but “to the Legislature enacting statutes subject to the Governor’s veto, as generally provided in the Constitution.”

Nothing in the ballot pamphlet or the legislative history suggests that Proposition 1A was intended to shield such appropriations from the line-item veto, Croskey said.

The case is California School Boards Association v. Brown, B228680.


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