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St. John's Well Child and Family Center v. Schwarzenegger

March 2, 2010

ST. JOHN'S WELL CHILD AND FAMILY CENTER ET AL. PETITIONERS,
v.
ARNOLD SCHWARZENEGGER AS GOVERNOR, ETC., ET AL., RESPONDENTS;
DARRELL STEINBERG, INDIVIDUALLY AND AS PRESIDENT PRO TEMPORE, ETC., ET AL., INTERVENERS.



The opinion of the court was delivered by: Kline, P.J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

The current economic downturn affects all Californians, but those suffer most who receive essential health and welfare assistance from agencies dependent upon state tax revenues. The needs of such vulnerable citizens so exceed the state's diminished ability to pay for them that "Sophie's choices" are presented. Government must choose between and among equally needy groups, knowing those not favored will be devastated. The responsible decision makers are the Legislature and the Governor. In the context of the constitutionally prescribed budget process, the power of the purse-i.e., the power to appropriate public funds-belongs only to the Legislature. With respect to a bill containing appropriations, the Governor can only sign or veto the measure in its entirety or "reduce or eliminate one or more items of appropriation." (Cal. Const., art IV, § 10, subd. (e).) The question in this case is whether the Governor exceeded these limited powers.

In this original writ proceeding, we consider constitutional challenges to the Governor's use of the line-item veto authority provided in article IV, section 10, subdivision (e) of the California Constitution to increase the amount of midyear reductions (further reducing the reductions) made by the Legislature to the Budget Act of 2009. (Stats. 2009, 3d Ex. Sess., ch. 1, approved by Governor Feb. 20, 2009 (hereafter "2009 Budget Act").) We shall conclude the Governor's exercise of the challenged veto power does not exceed his constitutional authority.

Petitioners include St. John's Well Child and Family Center, a nonprofit network of five community health centers and six school-based clinics in medically underserved areas of Los Angeles County, and other entities and individuals throughout the state whose programs and lives will be drastically affected by the further reductions at issue here.*fn1

Respondents are Arnold Schwarzenegger, the Governor of the State of California, and John Chiang, who, as the Controller of the State of California, is responsible for administration of the state's finances, including disbursement of funds appropriated by law.*fn2 The Controller does not take a position on the merits of this litigation.

Interveners are Darrell Steinberg, in his official capacity as President pro Tempore of the California State Senate, and in his personal capacity as a resident and taxpayer of Sacramento County, and Karen Bass, in her official capacity as Speaker of the California Assembly, and in her personal capacity as a resident and taxpayer of Los Angeles County.

Several amici curiae have filed briefs supporting the various parties.*fn3

Petitioners and interveners contend that the Governor's action exceeded constitutional limits because the individual budget cuts he further reduced were not "items of appropriation" (Cal. Const., art. IV, § 10, subd. (e)) that could be individually vetoed or reduced. They further contend that the Governor attempted to exercise authority belonging solely to the Legislature in violation of article III, section 3 of the California Constitution.

Petitioners and interveners seek original relief in this court pursuant to article VI, section 10 of the California Constitution, Code of Civil Procedure sections 387 and 1085, and California Rules of Court, rule 8.485 et seq. They seek to enjoin the Controller from enforcing or taking any steps to enforce the Governor's vetoes of certain provisions of Assembly Bill No. 1 (hereafter "Assembly Bill 4X 1"), as embodied in the Budget Act of 2009-Revisions (Stats. 2009, 4th Ex. Sess. 2009-2010, ch. 1, hereafter "Revised 2009 Budget Act"). (See Assem. Bill 4X 1, as amended by Sen., July 23, 2009 and approved by Governor July 28, 2009 [with certain deletions, revisions and reductions (hereafter "Governor's Veto Message")].) Although we customarily decline to exercise such jurisdiction, preferring initial disposition by the superior court, this case involves issues of sufficient public importance and urgency to justify departing from the usual course. The significance of the issues and need for prompt resolution warrant exercise of our original jurisdiction. (Legislature v. Eu (1991) 54 Cal.3d 492, 500; Raven v. Deukmejian (1990) 52 Cal.3d 336, 340; see also Planned Parenthood Affiliates v. Van de Kamp (1986) 181 Cal.App.3d 245, 262-265.) Therefore, on September 21, 2009, we issued an order to show cause why the relief sought should not be granted and thereafter held oral argument.*fn4

BACKGROUND

On February 20, 2009, the Governor signed into law the 2009 Budget Act, which set forth various appropriations of state funds for the 2009- 2010 fiscal year. California's economy worsened, the revenue assumptions on which the 2009 Budget Act was based proved to be far too optimistic, and the state's overall cash flow positions continued to worsen. The Governor proclaimed a fiscal crisis pursuant to the California Constitution, article IV, section 10, subdivision (f),*fn5 and the Legislature assembled in a special session to address the fiscal emergency. After months of negotiations, the Legislature passed Assembly Bill 4X 1 on July 23, 2009. The final budget package enacted as Assembly Bill 4X 1 contained $24.2 billion in budget solutions, including $15.6 billion in cuts, $3.9 billion in additional revenues, $2.1 billion in borrowing, $1.5 billion in fund shifts, and $1.2 billion in deferrals and other adjustments.

On July 28, 2009, the Governor exercised his line-item veto to reduce or eliminate several items contained in Assembly Bill 4X 1, and then signed the measure into law. (Rev. 2009 Budget Act.) The Governor vetoed 27 different line items of sections of Assembly Bill 4X 1. The effect of these vetoes was to further reduce the total amount appropriated in the 2009 Budget Act by more than $488 million. Many of the items reduced by the Governor had already been reduced by the Legislature from the amounts appropriated in the 2009 Budget Act. The Governor's signing message explained that his cuts and eliminations to the spending bill were for the most part designed "to increase the reserve and to reduce the state's structural deficit." (Rev. 2009 Budget Act, Governor's Veto Message for §§ 18.00, 18.10, 18.20, 18.40; see also id., §§ 17.50, 18.50.)

This original mandamus action by petitioners and interveners followed,*fn6 in which they challenge the Governor's use of the line- item veto on seven sections of Assembly Bill 4X 1, specifically, sections 568 and 570 through 575.*fn7 These vetoes impact the seven sections of Assembly Bill 4X 1 as follows:

* Section 17.50, further reducing the general fund reduction for the Department of Aging by $6,160,000;

* Section 18.00, subdivision (a), further reducing general fund funding for local assistance of the Medi-Cal program by $60,569,000; and section 18.00, subdivision (e), eliminating funding for Community Clinic Programs;

* Section 18.10, further reducing the funding for various programs administered by the Office of AIDS by $52,133,000, further reducing funding for the Domestic Violence Program by $16,337,000,*fn8 further reducing funding for the Adolescent Family Life Program by $9,000,000, and further reducing funding for the Black Infant Health Program by $3,003,000;

* Section 18.20, further reducing the Healthy Families Program by $50,000,000;

* Section 18.30, further reducing Regional Center Purchase of Services for children up to age five by $50,000,000;

* Section 18.40, further reducing funding of the Caregiver Resource Centers by $4,082,000; and

* Section 18.50, further reducing general fund funding to the In-Home Supportive Services Program by $37,555,000.

I. Constitutional Framework of the Veto Power

The question presented as a matter of first impression is whether the Governor's line-item veto power encompasses the ability to further reduce mid-year reductions made by the Legislature to appropriations originally made in the 2009 Budget Act. Although the particular issue may be novel, we are not without guidance, as the California Supreme Court, in Harbor v. Deukmejian (1987) 43 Cal.3d 1078 (Harbor), extensively described the constitutional framework within which the Governor exercises the line-item veto.

"The California Constitution declares that the legislative power of the state is vested in the Legislature (art. IV, § 1) and the executive power in the Governor (art. [V], § 1). Unless permitted by the Constitution, the Governor may not exercise legislative powers. (Art. III, § 3.) He may veto a bill `by returning it with any objections to the house of origin,' and it will become law only if `each house then passes the bill by rollcall vote . . . two thirds of the membership concurring. . . .' [(Art. IV, § 10, subd. (a).)] If the Governor fails to act within a certain period of time, the measure becomes law without his signature. (Art. IV, § 10, subd. [(b)].) The Governor's veto power is more extensive with regard to appropriations. He may `reduce or eliminate one or more items of appropriation while approving other portions of a bill.' Such items may be passed over his veto in the same manner as vetoed bills. (Art. IV, § 10, subd. [(e)].)" (Harbor, supra, 43 Cal.3d at p. 1084, italics added.)*fn9

The Harbor court agreed with the petitioners there that "in vetoing legislation, the Governor acts in a legislative capacity, and that in order to preserve the system of checks and balances upon which our government is founded, he may exercise legislative power only in the manner expressly authorized by the Constitution. Since that document only authorizes the Governor to veto a `bill' or to reduce or eliminate `items of appropriation' the Governor may not veto part of a bill which is not an `item of appropriation.' " (Harbor, supra, 43 Cal.3d. at p. 1084.)

Tracking the historical development of the veto power from its origins in Rome, where the tribune of plebeians had the power to disapprove measures recommended by the senate, Harbor explained that "[t]he word, `veto' means `I forbid' in Latin. Then, as now, the effect of the veto was negative, frustrating an act without substituting anything in its place." (Harbor, supra, 43 Cal.3d at p. 1085, citing Zinn, The Veto Power of the President (1951) 12 F.R.D. 209.) Evolving in the United States as "an integral part of the system of checks and balances" (Harbor, at p. 1085), the veto power at the federal level is circumscribed by the limitation that the President may approve or reject a bill in its entirety, but may not select portions of a bill for disapproval. "As a much-quoted early case commented, `the executive, in every republican form of government, has only a qualified and destructive legislative function, and never creative legislative power.' (State v. Holder (1898) 76 Miss. 158 [23 So. 643, 645].) [¶] While the rule prohibiting selective exercise of the veto is unyielding in the federal system, most states have provided an exception for items of appropriation." (Harbor, at p. 1086; see Thirteenth Guam Legislature v. Bordallo (D. Guam 1977) 430 F.Supp. 405, 410.)

"In California, the constitution of 1849 included a gubernatorial veto provision similar to that contained in the United States Constitution. (Cal. Const. of 1849, art. IV, § 17 . . . .) The Constitution of 1879 added the item veto power, allowing the Governor to `object to one or more items' of appropriation in a bill which contained several `items of appropriation.' (Cal. Const. of 1879, art IV, § 16.) By constitutional initiative in 1922, the Governor was empowered not only to eliminate `items of appropriation' but to reduce them, while approving other portions of a bill. (Art. IV, § 10, subd. ([e]).) The 1922 amendment also directed the Governor to submit a budget to the Legislature containing his recommendation for state expenditures. (Art. IV, § 12, subd. (a).)" (Harbor, supra, 43 Cal.3d at p. 1086, italics added.)*fn10

The item veto and the line-item veto allowing the Governor to eliminate or reduce items of appropriation do not confer the power to selectively veto general legislation. (Harbor, supra, 43 Cal.3d at p. 1087; Lukens v. Nye (1909) 156 Cal. 498, 501-503.) The Governor may not veto part of a bill that is not an "item of appropriation." (Harbor, at pp. 1084-1085, 1088-1089.)

"[A]rticle III, section 3 provides that one branch of government may not exercise the powers granted to another `except as permitted by this Constitution.' Case law, commentators, and historians have long recognized that in exercising the veto the Governor acts in a legislative capacity. [Citations.] . . . [¶] It follows that in exercising the power of the veto the Governor may act only as permitted by the Constitution. That authority is to veto a `bill' (art. IV, § 10, subd. (a)) or to ...


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