CITY OF SACRAMENTO et al., Plaintiffs and Appellants, v. THE STATE OF CALIFORNIA et al., Defendants and Respondents.
No. S006188
Supreme Court of California
Jan. 29, 1990.
45 Cal. 3d 51
James P. Jackson, City Attorney, and William P. Carnazzo, Deputy City Attorney, for Plaintiffs and Appellants.
John K. Van de Kamp, Attorney General, N. Eugene Hill, Assistant Attorney General, Paul H. Dobson, Richard M. Frank, Floyd D. Shimomura and Carol Hunter, Deputy Attorneys General, for Defendants and Respondents.
De Witt W. Clinton, County Counsel (Los Angeles), Amanda F. Susskind, Deputy County Counsel, Kitt Berman, Ross & Scott and William D. Ross as Amici Curiae on behalf of Defendants and Respondents.
EAGLESON, J.—In response to changes in federal law, chapter 2 of the Statutes of 1978 (hereafter chapter 2/78) extended mandatory coverage under the state‘s unemployment insurance law to include state and local governments and nonprofit corporations. Here we consider whether, in chapter 2/78, the state “mandate[d] a new program or higher level of service” on the local agencies, and must therefore reimburse local compliance costs under article XIII B of the California Constitution and related statutes.
We conclude that the state is not required to reimburse the chapter 2/78 expenses of local governments. The obligations imposed by chapter 2/78 fail to meet the “program” and “service” standards for mandatory subvention we recently set forth in County of Los Angeles v. State of California (1987) 43 Cal.3d 46 [233 Cal.Rptr. 38, 729 P.2d 202] (hereafter County of Los Angeles). Chapter 2/78 imposes no “unique” obligation on local governments, nor does it require them to provide new or increased governmental services to the public. The Court of Appeal decision, finding the expenses reimbursable, must therefore be reversed.
However, our holding does not leave local agencies powerless to counter the fiscal pressures created by chapter 2/78. Though provisions of the
I. FACTS.
In 1972, and again in 1973, the Legislature enacted comprehensive schemes for local property tax relief. Though frequently amended thereafter, these statutes retained three principal features. First, they placed a limit on the local property tax rate. Second, they required the state to reimburse local governments for their costs resulting from state laws “which mandate . . . new program[s] or . . . increased level[s] of service” at the local level. Finally, they allowed local governments to exceed their property taxation limits to fund certain other nondiscretionary expenses, including “costs mandated by the federal government.” (Stats. 1972, ch. 1406, § 14.7, pp.
Since adoption of the Social Security Act in 1935, federal law has provided powerful incentives to enactment of unemployment insurance protection by the individual states. In current form, the Federal Unemployment Tax Act (hereafter FUTA) (
California enacted its unemployment insurance system “on the eve of the adoption of the Social Security Aсt” in 1935 (Steward Machine Co. v. Davis (1937) 301 U.S. 548, 587-588 [81 L.Ed. 1279, 1291-1292, 57 S.Ct. 883, 109 A.L.R. 1293]; see Stats. 1935, ch. 352, § 1 et seq., p. 1226 et seq.) and has sought to maintain federal compliance ever since. Every other state has also adopted an unemployment insurance plan in response to the federal stimulus.
In 1976, Congress enacted Public Law number 94-566 (hereafter Public Law 94-566). Insofar as pertinent here, Public Law 94-566 amended FUTA to require for the first time that a “certified” state plan include coverage of the employees of public agencies. (Pub.L. No. 94-566 (Oct. 20, 1976) § 115(a), 90 Stat. 2670;
The Legislature thereafter adopted chapter 2/78 to conform California‘s system to Public Law 94-566. Among other things, chapter 2/78 effectively requires the state and all local governments, beginning January 1, 1978, to participate in the state unemployment insurance system on behalf of their employees. (Stats. 1978, ch. 2, §§ 12, 24, 31, 36.5, 58-61, pp. 12-14, 16, 18, 24-27;
In November 1979, the voters adopted Proposition 4, adding article XIII B to the state Constitution. Article XIII B—the so-called “Gann limit“—restricts the amounts state and local governments may
The City of Sacramento (City) and the County of Los Angeles (County) filed claims with the State Board of Control (Board) (see
In City of Sacramento v. State of California (1984) 156 Cal.App.3d 182 [203 Cal.Rptr. 258] (hereafter Sacramento I), the Court of Appeal affirmed. Among other things, the court concluded (pp. 194-199) that chapter 2/78
On remand, the Board determined the amounts due on the claims originally submitted by the City and the County. As required by the judgment, the Board also adopted “parameters and guidelines” for reimbursement of chapter 2/78 costs to all affected local agencies. However, during the 1984 session of the Legislature, no bills were introduced for reimbursement of pre-1984 costs, and bills to fund costs in and after 1984 failed passage.
From and after the decision in Sacramento I, the City paid “under protest” its quarterly billings from the Employment Development Department (EDD) for unemployment compensation. Each payment included a claim for refund of unemployment taxes pursuant to
Accordingly, in July 1985, the City began returning its quarterly billings unpaid. It thereupon commenced the instant class action in Sacramento Superior Court on behalf of all local governments in the state. Named as defendants were the State of California, the Governor, EDD, the state Controller and Treasurer, and the Legislature. The complaint sought (1) injunctive and declaratory relief barring enforcement of chapter 2/78 in the absence of state subvention; (2) a writ of mandate directing that past, current, and future subvention funds be appropriated and disbursed, and/or that EDD pay local agencies’ past, current, and future unemployment-insurance contributions from its own budget; and (3) damages for past failures to reimburse.
Shortly after this suit was filed, the Legislature appropriated some chapter 2/78 funds for fiscal year 1984-1985 (Stats. 1985, ch. 1217, §§ 12, 17, subd. (b), pp. 4148, 4150), and it subsequently authorized limited funds in the 1986 Budget Act (Stats. 1986, ch. 186, § 2.00, p. 1006). On defendants’ demurrer, the trial court later dismissed plaintiffs’ claims for reimbursement for these post-1984 periods.3 Thereafter, the trial court certified the suit as a class action and granted plaintiffs’ motion for summary adjudication of issues based on Sacramento I.
Defendants in this case thereupon moved for summary judgment, urging that extension of unemployment insurance coverage to public employees satisfied neither reimbursement standard set forth in County of Los Angeles. The trial court agreed and awarded summary judgment.
The Court of Appeal reversed on two independent grounds. First, the court ruled that defendants were collaterally estopped by Sacramento I to relitigate the reimbursability of chapter 2/78 costs. Second, the court found that chapter 2/78 imposed “unique requirements” on local governments, within the meaning of County of Los Angeles, since the legislation was aimed solely at local agencies and subjected them to obligations from which they were previously exempt.
II. JURISDICTION; PLAINTIFFS’ EXHAUSTION OF REMEDIES.
After we granted review, we asked the parties and amici curiae4 to brief whether the current suit is jurisdictionally barred by any failure of plaintiffs to exhaust their remedies (see Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 291-295 [109 P.2d 942, 132 A.L.R. 715]), or for any other reason. If so, the summary judgment for defendants against all plaintiffs was proper notwithstanding the merits of the subvention claim. In that event, the judgment of the Court of Appeal must be reversed without consideration of the substantive issues raised by the appeal.
However, we find no failure to exhaust which would bar us from reaching the merits. Defendants concede plaintiffs exhausted all administrative remedies provided by the statutes governing subvention of state-mandatеd costs. The concession appears correct, at least as to the City and the County. These two agencies filed timely claims for reimbursement of expenses incurred to comply with chapter 2/78. When the Board initially denied the claims, the City and the County pursued judicial remedies culminating in
These procedures exhausted the City‘s and the County‘s administrative and judicial avenues, short of this suit, to obtain redress on the claims adjudicated in Sacramento I. Insofar as the Legislature thereafter declined to appropriate the necessary funds for disbursement by the Controller, the City and the County were authorized to bring an enforcement action. (
Defendants urge, however, that plaintiffs essentially are seeking resolution of a “tax” question—the validity vel non of their unemployment tax contributions—but have failed to satisfy the special procedures applicable to such cases. Defendants insist that because article XIII, section 32, of the California Constitution broadly precludes any suit to enjoin or impede collection of a tax (e.g., Calfarm Ins. Co. v. Deukmejian (1989) 48 Cal.3d 805, 838-841 [258 Cal.Rptr. 161, 771 P.2d 1247]; Western Oil & Gas Assn. v. State Bd. of Equalization (1987) 44 Cal.3d 208, 213 [242 Cal.Rptr. 334, 745 P.2d 1360]; Pacific Gas & Electric Co. v. State Bd. of Equalization (1980) 27 Cal.3d 277, 279-284 [165 Cal.Rptr. 122, 611 P.2d 463]), plaintiffs’ claims for declaratory and injunctive relief are barred.
The only remedy constitutionally open to plaintiffs, defendants assert, is to pay their unemployment “taxes” and then seek a “refund” under the “exclusive” procedures set forth in the
We question, but do not decide, whether a public entity‘s contributions to the state unemployment insurance system can ever constitute a “tax” sub-
“The policy behind [article XIII,] section 32 is to allow revenue collection to continue during [tax] litigation so that essential public services dependent on the funds are not unnecessarily disrupted. [Citation.] . . . .” (Pacific Gas & Electric Co., supra, 27 Cal.3d at p. 283.) The administrative “refund” procedures established by the unemployment insurance law are designed to ensure initial examination of unemployment tax disputes by the agency with specific expertise in that area.
However, plaintiffs attempt no challenge, direct or indirect, to the validity or application of the unemployment insurance law as such, or to the propriety of any “tax” assessed thereunder. Nor have plaintiffs bypassed the agency or procedures established to decide such disputes.
Rather, plaintiffs claim that all their costs of affording unemployment compensation to their employees are subject to a statutory and constitutional subvention which the state refuses to make. It is incidental that these costs happen to include what might be characterized as a “tax.” As the subvention statutes require, plaintiffs City and County have pursued all available remedies before the agency (formerly the Board, now the Commission) created to decide subvention issues; that agency has upheld their submitted claims in full, but the necessary appropriations have been withheld.
Under these circumstances, the Legislature has concluded that a local entity should be forced to continue incurring the unfunded costs subject to “refund.” Rather, the entity is expressly authorized to bring suit to declare such an unfunded mandate unenforceable. (
The importance of such a remedy stems from the fundamental legislative prerogative to control appropriations. Under the separation of powers doctrine, the Legislature cannot be compelled to appropriate or authorize the disbursement of specific funds. (Mandel v. Myers (1981) 29 Cal.3d 531, 540 [174 Cal.Rptr. 841, 629 P.2d 935].) Since the Legislature will have demonstrated its refusal to fund a particular mandate by the time a mandamus action is filed, the literal “tax refund” process urged by defendants may often be meaningless.
Insofar as plaintiffs also seek reimbursement for past expenses, similar considerations dictate that the governing statutes are those created
III. COLLATERAL ESTOPPEL; RES JUDICATA.
However, plaintiffs claim that because Sacramento I “finally” decided whether chapter 2/78 constitutes a reimbursable state mandate, the state and its agents are collaterally estopped from relitigating the issue here. The Court of Appeal agreed that the doctrine of collateral estoppel applies. Under the circumstances, we are not persuaded.
Generally, collateral estoppel bars the party to a prior action, or one in privity with him, from relitigating issues finally decided against him in the earlier action. (Clemmer v. Hartford Insurance Co. (1978) 22 Cal.3d 865, 874 [151 Cal.Rptr. 285, 587 P.2d 1098].) “. . . But when the issue is a question of law rather than of fact, the prior determination is not conclusive either if injustice would result or if the public interest requires that relitigation not be foreclosed. [Citations.] . . . .” (Consumers Lobby Against Monopolies v. Public Utilities Com. (1979) 25 Cal.3d 891, 902 [160 Cal.Rptr. 124, 603 P.2d 41].)
Even if the formal prerequisites for collateral estoppel are present here, the public-interest exception governs. Whether chapter 2/78 costs are reimbursable under article XIII B and parallel statutes constitutes a pure question of law. The state was the losing party in Sacramento I, and also the only entity legally affected by that decision. Thus, strict application of collateral estoppel would foreclose any reexamination of the holding of that case. The state would remain bound, and no other person would have occasion to challenge the precedent.
Yet the consequences of any error transcend those which would apply to mere private parties. If the result of Sacramento I is wrong but unimpeachable, taxpayers statewide will suffer unjustly the consequences of the state‘s continuing obligation to fund the chapter 2/78 costs of local agencies. On the other hand, if the state fails to appropriate the funds to meet this
As below, plaintiffs also argue that reconsideration of Sacramento I is precluded by res judicata. They suggest that the prior litigation resolved not only the legal issues presented by this appeal, but all claims among the current parties as well.
Of course, res judicata and the rule of final judgments bar us from disturbing individuаl claims or causes of action, on behalf of specific agencies, which have been finally adjudicated and are no longer subject to review. (
As before, defendants urge that by extending unemployment insurance coverage to local government employees, the Legislature did not mandate a “new program” or an “increased” or “higher level of service” on local governments. Thus, they assert, the local costs of providing such coverage are not subject to subvention under article XIII B, section 6, or parallel statutes. (
Our analysis is controlled by our decision in County of Los Angeles. There we determined that a general increase in workers’ compensation benefits did not, when applied to local governments, constitute a reimbursable state mandate under article XIII B.
In so holding, we focused on the particular language of article XIII B, section 6, which requires state subvention of a local government‘s costs of any “new program” or “increased level of service” imposed upon it by the state. We dismissed the notion that, by employing the quoted phrases, the voters intended all local costs resulting from compliance with state law to be subject to mandatory reimbursement. Rather, we explained, “[t]he concern which prompted the inclusion of section 6 in article XIII B was the perceived attempt by the state to enact legislation or adopt administrative orders creating programs to be administered by local agencies, thereby transferring to those agencies the fiscal responsibility for providing services which the state believed should be extended to the public. . . .” (43 Cal.3d at p. 56.)
Under these circumstances, we reasoned, the electorate must have intended the undefined terms “new program” and “increased level of service” to carry their “commonly understood meanings . . .—programs that carry out the governmental function of providing services to the public, or laws which, to implement a state policy, impose unique requirements on local governments and do not apply generally to all residents and entities in the state.” (43 Cal.3d at p. 56, italics added.)
Local governments’ costs of complying with a general statewide increase in the level of workers’ compensation benefits do not qualify under thеse standards, we concluded. As we noted, “. . . [w]orkers’ compensation is not a program administered by local agencies to provide service to the public. . . . Although local agencies must provide benefits to
Similar considerations apply here. By requiring local governments to provide unemployment compensation protection to their own employees, the state has not compelled provision of new or increased “service to the public” at the local level. Nor has it imposed a state policy “unique[ly]” on local governments. Most private employers in the state already were required to provide unemployment protection to their employees. Extension of this requirement to local governments, together with the state government and nonprofit corporations, merely makes the local agencies “indistinguishable in this respect from private employers.”
Plaintiffs nonetheless suggest there are several bases for reaching a different result here than in County of Los Angeles. None of the asserted distinctions has merit.
Plaintiffs first note the proponents’ declaration in the voters’ pamphlet that the purpose of article XIII B, section 6, was to prevent the state from “forcing” unfunded programs on local agencies. Plaintiffs invoke this pamphlet language for the proposition that any new cost “forced” on local governments by state law is subject to subvention.
The claim is directly contrary to our holding in County of Los Angeles. As we explained, “[i]n . . . context, the [pamphlet] phrase ‘to force programs on local governments’ confirms that the intent underlying section 6 [of article XIII B] was to require reimbursement to local agencies for the costs involved in carrying out functions peculiar to government, not for expenses incurred by local agencies as an incidental impact of laws that apply generally to all state residents and entities. . . . [¶] The language of section 6 is far too vague to support an inference that . . . each time the Legislature
Plaintiffs next urge the Court of Appeal‘s premise—that chapter 2/78 did impose a “unique” requirement on local agencies within the meaning of County of Los Angeles, since it applied only to them, and compelled costs to which they were not previously subject. Plaintiffs cite our recent decision in Lucia Mar Unified School Dist. v. Honig (1988) 44 Cal.3d 830 [244 Cal.Rptr. 677, 750 P.2d 318]. There we held, inter alia, that by requiring each local school district to contribute pаrt of the expense of educating its handicapped students in state-run schools—a cost previously absorbed entirely by the state—the Legislature created a “new program” subject to subvention under article XIII B, section 6. As we observed, “although the schools for the handicapped have been operated by the state for many years, the program was new insofar as [the local districts] are concerned. . . .” (P. 835, italics added.)
Lucia Mar is inapposite here. The education of handicapped students was clearly a traditional governmental “service to the public,” and it qualified as a “program” on that basis. This function had long been performed by the state, and the only issue was whether the belated shifting of the program‘s costs to local governments made it “new” for subvention purposes. A negative answer to that question would have undermined a central purpose of article XIII B, section 6—to prevent the state‘s transfer of the cost of government from itself to the local level.
Here, the issue is whether costs unrelated to the provision of public services are nonetheless reimbursable costs of government, because they are imposed on local governments “unique[ly],” and not merely as an incident of compliance with general laws. State and local governments, and nonprofit corporations, had previously enjоyed a special exemption from requirements imposed on most other employers in the state and nation. Chapter 2/78 merely eliminated the exemption and made these previously exempted entities subject to the general rule. By doing so, it may have imposed a requirement “new” to local agencies, but that requirement was not “unique.”
Next, plaintiffs complain that the new costs imposed on local governments by chapter 2/78 are too great to be deemed “incidental” within the meaning of County of Los Angeles. However, our decision did not use the word “incidental” to mean merely “insignificant in amount.” Rather, we declared that the state need not reimburse local governments for expenses incidentally imposed upon them by laws of general application. In County of Los Angeles, we assumed that the expenses imposed in common on the private and public sectors by such a general law—as by the across-the-board increase in workers’ compensation benefits there at issue—might be substantial. Notwithstanding this possibility, wе found the voters did not intend to require a state subsidy of the public sector in such cases. (43 Cal.3d at pp. 56-58.)
Finally, plaintiffs and their amici curiae urge us to overrule County of Los Angeles. They insist that our “program” and “unique requirement” limitations conflict with the language and purpose of article XIII B. First, they note that nonreimbursable state-mandated costs are expressly listed in subdivisions (a) through (c) of article XIII B, section 6.13 Under the maxim inclusio unius est exclusio alterius, they reason, further exceptions may not be implied. Second, they assert, our limiting construction allows the state to “force” many costly but unfunded requirements on local governments, which the latter must absorb without relief from their own article XIII B spending limits. This, they aver, cannot have been the voters’ intent.
These arguments misapprehend both the language of article XIII B, section 6, and our County of Los Angeles holding. Our reasoning in that case is not inconsistent with subdivisions (a) through (c) of section 6. Those paragraphs simply exclude certain state-imposed costs even if they would otherwise be reimbursable under the “new program” or “increased service”
Moreover, the “program” and “service” standards developed in County of Los Angeles create no undue risk that the state will impose expensive unfunded obligations against local agencies’ artiсle XIII B spending limits. On the contrary, our standards require reimbursement whenever the state freely chooses to impose on local agencies any peculiarly “governmental” cost which they were not previously required to absorb.
On the other hand, as we explained in County of Los Angeles, extension of the subvention requirements to costs “incidentally” imposed on local governments would require the Legislature to assess the fiscal effect on local agencies of each law of general application. Moreover, it would subject much general legislation to the supermajority vote required to pass a companion local-government revenue bill. Each such necessary appropriation would, in turn, cut into the state‘s article XIII B spending limit. (§ 8, subd. (a).) We concluded that nothing in the language, history, or apparent purpose of article XIII B suggested such far-reaching limitations on legitimate state power. (43 Cal.3d at pp. 56-58.)
We remain persuaded by this reasoning.14 We decline to overrule County of Los Angeles. Under the teaching of that case, we hold that chapter 2/78 imposes no local costs which must be reimbursed pursuant to article XIII B, section 6, and parallel statutes.
V. “FEDERAL” MANDATE?
This case proceeded through the Court of Appeal solely on the issue whether chapter 2/78 constitutes a reimbursable “state mandate,” as defined in County of Los Angeles. After we granted review, and in the public interest, we also decided to reexamine а related holding contained in Sacramento I—that chapter 2/78 does not qualify as a “federal” mandate.
Proper application of the “federal mandate” concept has important implications beyond subvention. A “cost mandated by the federal government” is exempt from a local government‘s statutory taxation limit. (
After due consideration, we reject Sacramento I‘s premise. We conclude that chapter 2/78 does impose “costs mandated by the federal government,” as described in article XIII B and parallel statutes.16
As in Sacramento I, plaintiffs argue that the words “without discretion” and “unavoidably” require clear legal compulsion not present in Public Law 94-566. Defendants respond, as before, that the consequences of California‘s failure to comply with the federal “carrot and stick” scheme were so substantial that the state had no realistic “discretion” to refuse.17 In Sacramento I, the Court of Appeal adopted plaintiffs’ narrow view. On reflection, we disagree.
Though section 9(b) seems plain on its face, we find a latent ambiguity in context. At the time article XIII B was adopted, United States Supreme Court decisions construing the
Just three years before article XIII B was adopted, the court struck down, on
Usery dealt with federal efforts to regulate sovereign units of government as employers. However, the court‘s rationale obviously applied with equal or greater force to direct federal regulation of state and local governments as governments. Under Usery‘s reasoning, it seems manifest that Congress‘s direct power to require or prohibit substantive governmental policies or programs by state or local agencies was greatly curtailed. Such power would interfere impermissibly with “integral governmental functions” and essential “attributes of [state] sovereignty.20
After article XIII B‘s adoption, both the result and the reasoning of Usery were overruled in Garcia v. San Antonio Metro. Transit Auth. (1985) 469 U.S. 528 [83 L.Ed.2d 1016, 105 S.Ct. 1005]. In Garcia, a five-justice majority concluded that the political structure of the federal system, rather than rigid categories of inviolable state “sovereignty,” constitutes state and local governments’ primary protection against Congress‘s overreaching efforts to regulate them. (Pp. 547-555 [83 L.Ed.2d at pp. 1031-1037].)
However, this later development does not alter two crucial facts extant when article XIII B was enacted. First, the power of the federal government to impose its direct regulatory will on state and local agencies was then sharply in doubt. Second, in conformity with this principle, the vast bulk of cost-producing federal influence on government at the state and local levels was by inducement or incentive rather than direct compulsion.21 That remains so to this day.
Thus, if article XIII B‘s reference to “federal mandates” were limited to strict legal compulsion by the federal government, it would have been largely suрerfluous.22 It is well settled that “constitutional . . . enactments must receive a liberal, practical common-sense construction which will meet changed conditions and the growing needs of the people. [Citations.] . . . .” (Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 245 [149 Cal.Rptr. 239, 583 P.2d 1281].) While “[a] constitutional amendment should be construed in accordance with the natural and ordinary meaning of its words[,] [citation] [, t]he literal language of enactments may be disregarded to avoid absurd results and to fulfill the apparent intent of the framers. [Citations.]” (Ibid.)
As the drafters and adopters of article XIII B must have understood, certain regulatory standards imposed by the federal government
Plaintiffs and their amici curiae suggest California could have chosen to terminate its own unemployment insurance system, thus leaving the state‘s employers faced only with the federal tax. However, we cannot imagine the drafters and adopters of article XIII B intended to force the state to such draconian ends.
Here, the state simply did what was necessary to avoid certain and severe federal penalties upon its resident businesses. The alternatives were so far beyond the realm of practical reality that they left the state “without discretion” to depart from federal standards. We therefore conclude that the state acted in response to a federal “mandate” for purposes of article XIII B.23
Unlike the Sacramento I court, we deem significant the Legislature‘s persistent agreement with our construсtion. In 1980, after the adoption of article XIII B, it amended the statutory definition of “costs mandated by the federal government” to provide that these include “costs resulting from enactment of a state law or regulation where failure to enact such law or regulation to meet specific federal program or service requirements would result in substantial monetary penalties or loss of funds to public or private persons in the state. . . .” (
In Sacramento I, the Court of Appeal declined to apply this statutory amendment “retroactively” to article XIII B. (156 Cal.App.3d at pp. 197-198.) The Legislature immediately responded. In 1984 statutes enacted for the express purpose of “implement[ing]” article XIII B (see
Plaintiffs contend that these statutory pronouncements deserve little interpretive weight since, among other things, they are “internally inconsistent.” Plaintiffs stress the proviso in
We see no fatal inconsistencies. The first clause of the proviso merely confirms, as article XIII B itself specifies, that program funds voluntarily provided by anоther unit of government may not be excluded from the
Given the variety of cooperative federal-state-local programs, we here attempt no final test for “mandatory” versus “optional” compliance with federal law. A determination in each case must depend on such factors as the nature and purpose of the federal program; whether its design suggests an intent to coerce; when state and/or local participation began; the penalties, if any, assessed for withdrawal or refusal to participate or comply; and any other legal and practical consequences of nonparticipation, noncompliance, or withdrawal. Always, the courts and the Commission must respect the governing principle of
For reasons expressed above, we are satisfied under these standards that chapter 2/78 did implement a federal “mandate” within the meaning of article XIII B and prior statutes restricting local taxation. Hence, subject to superseding constitutional ceilings on taxation by state and local governments, an agency governed by chapter 2/78 may tax and spend as necessary to meet the expenses required to comply with that legislation. To the extent Sacramento I is inconsistent with our analysis, that decision is disapproved.
VI. CONCLUSION.
We have concluded that chapter 2/78 is a “federal mandate” which exempts affected state and local agencies from pertinent limits on their power to tax, appropriate, and spend. However, local governments’ ex-
Lucas, C. J., Mosk, J., Broussard, J., Panelli, J., and Kennard, J., concurred.
KAUFMAN, J., Concurring and Dissenting.----I concur in the judgment. Given this court‘s decision in County of Los Angeles v. State of California (1987) 43 Cal.3d 46 [233 Cal.Rptr. 38, 729 P.2d 202], I am compelled to agree that the obligation imposed on local governments by the 1978 state unemployment insurance legislation is not a “new program or higher level of service” within the meaning of
All too frequently in recent years (see, e.g., S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 345, fn. 1 [256 Cal.Rptr. 543, 769 P.2d 399]) this court, in its misguided zeal to provide enlightenment, has reached out to decide an issue not tendered by the parties. The majority‘s failure to exercise proper judicial restraint in the instant case is another example of this trend and one I find particularly disturbing since it violates a fundamental and venerable tenet of judicial practice—i.e., “A court will not decide a constitutional question unless such construction is absolutely necessary.” (Estate of Johnson (1903) 139 Cal. 532, 534 [73 P. 424]; accord, People v. Williams (1976) 16 Cal.3d 663, 667 [128 Cal.Rptr. 888, 547 P.2d 1000]; Palermo v. Stockton Theatres, Inc. (1948) 32 Cal.2d 53, 65 [195 P.2d 1].) The federal mandate issue which the majority here decides, because it turns on the proper construction of
To see just how far the majority has wandered from the issues essential to the proper resolution of this case, one need only point out that this action
The majority‘s federal mandate discussion does not even provide an alternative ground for the holding denying reimbursement of local governments’ unemployment insurance costs, for the majority purports to decide whether unemployment insurance costs are federally mandated without deciding whether resolution of this issue has any bearing on entitlement to reimbursement (see maj. opn., ante, p. 71, fn. 16). The majority‘s only justification for deciding whether unemployment insurance costs are federally mandated is that the issue has “important implications” inasmuch as federally mandated costs are “exempt from a local government‘s statutory taxation limit (
Were the issue properly presented in this case, I would conclude that the unemployment insurance costs are not federally mandated. The text of a constitution “should be construed in accordance with the natural and ordinary meaning of its words.” (Amador Valley Joint Union High Sch. Dist. v.
The meaning of this language is clear; to look beyond the text for some other meaning is both unnecessary and improper under accepted rules of constitutional interpretation. (See State Board of Education v. Levit (1959) 52 Cal.2d 441, 462 [343 P.2d 8]; People v. Knowles (1950) 35 Cal.2d 175, 182-183 [217 P.2d 1].) A “mandate” is “an order, command [or] charge.” (Xth Olympiad Com. v. American Olym. Assn. (1935) 2 Cal.2d 600, 604 [42 P.2d 1023]; see also, Morris v. County of Marin (1977) 18 Cal.3d 901, 908 [136 Cal.Rptr. 251, 559 P.2d 606] [“mandatory duty” is “an obligatory duty which a governmental entity is required to perform“]; Bridgman v. American Book Co. (1958) 12 Misc.2d 63, 66 [173 N.Y.S.2d 502, 506] [“mandate” is “a command, order or direction . . . which a person is bound to obey“].) The mandates to which the constitutional provision at issue refers are those “of the courts or the federal government.” The coercive force of court mandates is, of course, the force of law. That “mandates of . . . the federal government” are similarly limited to those obligations imposed by force of federal law is shown not only by the term “mandate” itself but also by the terms “without discretion” and “unavoidably,” which plainly exclude any form of inducement using political or economic pressure rather than legal compulsion.
Laws limiting governmental appropriations and indebtedness have traditionally exempted two categories of expenditures: those required to meet emergencies and those required to satisfy duties or mandates imposed by law. (See, e.g., County of Los Angeles v. Byram (1951) 36 Cal.2d 694, 698-700 [227 P.2d 4]; County of Los Angeles v. Payne (1937) 8 Cal.2d 563, 569-575 [66 P.2d 658]; State v. City Council of City of Helena (1939) 108 Mont. 347 [90 P.2d 514, 516]; Raynor v. King County (1940) 2 Wn.2d 199 [97 P.2d 696, 707].) The latter category has been interpreted as including only those obligations compelled by force of law, as opposed to economic or political necessity or expedience. (See County of Los Angeles v. Byram, supra, at pp. 698-700; County of Los Angeles v. Payne, supra, at pp. 573-574.) Article XIII B of the California Constitution follows the pattern of other similar laws; it provides exemptions for emergency appropriations in
As stated in Sacramento I, “The сoncept of federal mandates . . . is defined in section 9 of article XIII B. Subdivision (b) of that section excludes from a governmental entity‘s appropriation limit ‘[a]ppropriations required for purposes of complying with mandates of . . . the federal government which, without discretion, require an expenditure’ by the governmental entity. (Italics added.) As contemplated by article XIII B, section 9, a federal mandate is one pursuant to which the federal government imposes a cost upon a governmental entity, and the entity has no discretion to refuse the cost. Chapter 2 [the 1978 unemployment insurance legislation] was not a federal mandate within this constitutional definition, as the State had the discretion to participate or not in the federal unemployment insurance system.” (Sacramento I, supra, 156 Cal.App.3d 182, 197, italics in original.) Giving the constitutional language its usual and ordinary meaning, I agree with the Court of Appeal that federal law “mandates” an expenditure only if the expenditure is legally compelled, and not if the federal law merely provides economic or political inducements, no matter how powerful or coercive. Since it is undisputed that the state was under no legal compulsion to enact the 1978 unemployment insurance legislation, the burdens of that legislation are not “mandates of . . . the federal government.”
In support of its contrаry conclusion, the majority reasons as follows: (1) when article XIII B of the California Constitution was drafted and enacted, the
First, the
The test proposed by the majority for identifying those incentive programs which qualify as “mandates of . . . the federal government” will require an extensive factual inquiry into the practical consequences of noncompliance with the federal law. It will be burdensome to apply and its outcome will be difficult to predict. Besides being wholly unnecessary to resolution of this case, and violating the probable intent of the voters who enacted article XIII B of the California Constitution,1 the majority‘s discussion of the federal mandate issue is certain to generate more difficulties than it resolves.