Clark v. DegnanClark v. Degnan
Plaintiffs-intervenors and defendants moved for summary judgment on the adjourned return date of the order to show cause. On that date all parties stipulated that there were no disputed facts and requested the court to decide
The central issue is thus whether the Cap statute also necessarily or by implication puts limitations on defendants and certain state mandated expenses imposed on the counties, authority for which preexisted or was enacted prior to the effective date of the Cap statute. Defendants argue that the Cap statute is illusory without concomitant limits on what the State can mandate.
Defendant Degnan is the State Attorney General and responsible for advising the various state departments and most state agencies in the Executive Branch of the State Government. Certain of the defendants are the heads of various Executive Department state agencies. For example, defendant Laezza is the Director of the Division of Local Government in the Department of Community Affairs, and defendant Klein is the Commissioner of the Department of Human Services. Defendant Simpson, the Acting Administrative Director of the Courts, and defendant Carfora, the Court Administrator for the County of Hudson, are employed by the Judicial Branch of the State Government.
I
It may be asked whether this case should properly be cognizable before the Appellate Division because certain challenges arising under the Cap statute relate to so-called formula costs for patient care and to welfare programs administered under direction of the Commissioner of the Department of Human Services and other state officials. Plaintiffs and plaintiffs-intervenors have argued, and in effect asserted, that defendants are required by
This lawsuit actually challenges application of the Cap statute in large part as it relates to various formulas
Hudson County initially alleged that as a result of these increased demands under preexisting statutes, the budget for 1978 for Hudson County would exceed the limitations imposed by
It is stipulated and conceded that on February 23, 1978 Hudson County approved its 1978 budget which provided that $57,292,782 was to be raised by the county-purpose tax in order to meet the total appropriation of $126,866,468. It is also undisputed that after appropriate adjustments provided by the Cap statute the increase in the amount raised by the county-purpose tax for Hudson County was $1,725,769, approximately 3.5% more than the amount raised by the tax in 1977 to which the 5% limitation is applied. This increase
It is further admitted that on April 14, 1978 defendant Director of the Division of Local Government Services, pursuant to
A preliminary question, therefore, is whether the case is now moot. All parties urge the court to enter a declaratory judgment notwithstanding adoption and approval of the 1978 county budgets because of the public importance of the issue and the necessity for a determination prior to preparing subsequent budgets, at least for the 1979 budget year and before this temporary legislation with an initial three-year lifespan, expires by its own terms. See infra at 359. It may well be that this legislation will presently be extended for an additional three-year period in view of current legislative activity.
This court is empowered by
Here there is a sufficient adversary dispute between the parties and the question is of sufficient public importance that the court will undertake to resolve the issues before it, notwithstanding compliance with the Cap statute as to the 1978 county budgets. See Patrolman‘s Benevolent Ass‘n v. Montclair, 70 N.J. 130, 135 (1976); Dunellen Bd. of Ed. v. Dunellen Ed. Ass‘n, 64 N.J. 17, 22 (1973), and Busik v. Levine, 63 N.J. 351, 364 (1973), app. dism. 414 U.S. 1106, 94 S.Ct. 831, 38 L.Ed.2d 733 (1973). Cf. Galloway Tp. Bd. of Ed. v. Galloway Tp. Ed. Ass‘n, 78 N.J. 25, 38-47 (1978); Galloway Tp. Bd. of Ed. v. Galloway Tp. Ass‘n of Educational Secretaries, 78 N.J. 1, 16-23 (1978).
The complaints in this case have been directed to the requirements for the 1978 budget. In view of the clear thrust of the arguments and the stipulations at the argument on the order to show cause and the summary judgment motions and cross-motions, the court considers such requests as motions to amend the pleadings and allows assertion of claims for declaratory relief with respect to the 1979 budget year.
II
The complaining counties seek a judgment declaring that defendants are bound by and must take into account limitations set forth in
Beginning with the tax year 1977 municipalities, other than those having a municipal purposes tax levy of $0.10 or less per $100.00 and counties shall be prohibited from increasing their final appropriations by more than 5% over the previous year except within the provisions set forth hereunder.
Certain exceptions to the limitations contained in the foregoing section are set forth in
In the preparation of its budget, a county may not increase the county tax levy to be apportioned among its constituent municipalities in excess of 5% of the previous year‘s county tax levy, subject to the following exceptions:
a. The amount of revenue generated by the increase in valuations within the county based solely on applying the preceding year‘s county tax rate to the apportionment valuation of new construction or improvements within the county and such increase shall be levied in direct proportion to said valuation;
b. Capital expenditures funded by any source other than the county tax levy;
c. An increase based upon a resolution making an emergency appropriation according to the definition provided in N.J.S. 40A:4-46 approved by at least two-thirds of the board of chosen freeholders of the county and, except as to an emergency appropriation for a purpose referred to in d. or f. below, where pertinent, approved by the county executive;
d. All debt service;
e. Expenditures mandated after the effective date of this act pursuant to State or Federal law;
f. Amounts required to be paid pursuant to any contract with respect to use, services or provision of any project, facility or public improvement for water, sewer, solid waste, parking, senior citizen housing or any similar purpose, or payments on account of debt service therefor, between a county, and any other county, municipality, school or other district, agency, authority, commission, instrumentality, public corporation, body corporate and politic or political subdivision
of this State. With respect to the amounts required to be paid for senior citizen housing in the above cited political subdivisions or bodies, the exceptions shall be subject to the review and approval of the Local Finance Board.
Defendants deny that the statute was or is in any way intended to limit the amount by which the challenged budgetary items mandated by the State in a county budget, and not subject to an exception from the 5% limitation, may be increased.
Essentially, all parties claim that mandatory programs or spending requirements which have their genesis in law prior to the effective date of the act are included under the Cap limitation provisions. The complaining counties then take the position that individual budgetary line items under such programs should not be required by state agencies to be increased by more than 5% in the absence of a subsequent mandatory enactment or amendment to the Cap statute.
Plaintiffs assert they are prevented or at least inhibited from using such funds as they might in their discretion appropriate for such necessary services as road maintenance, improvement of the county jail and penitentiary and other services considered necessary or desirable by the respective boards of chosen freeholders.3 In this respect the complaining counties allege in general terms a deprivation of due process of law under the State and Federal Constitutions.
With the exception of Somerset County, plaintiffs and plaintiffs-intervenors initially maintained that each line item in their respective budgets for items allegedly mandated
The counties’ argument that the mandating of expenses to the counties in excess of 5% as to items subject to the Cap statute significantly undermines the constitutional policy of encouraging the liberal construction of laws relating to local governments in their favor (
In Bonnet v. State, 141 N.J. Super. 177, 272-273 (Law Div. 1976), aff‘d 155 N.J. Super. 520 (App. Div. 1978), it was noted that this issue was confronted at the New Jersey Constitutional Convention. A proposal to limit state power to mandate expenditures was not approved. In Bonnet, however, the Faulkner Act was recognized as a commitment to local government:
So long as the State has decided in the exercise of its constitutional power that there shall be local units of government, then * * * such units of government must have enough taxing power to carry on their essential functions or they cannot operate. The basic thought is that the courts cannot compel local officials * * * to do the impossible. [Id. at 273-274.]
The express legislative policy is in
It is hereby declared to be the policy of the Legislature that the spiraling cost of local government must be controlled to protect
the homeowners of the State and enable them to maintain their homesteads. At the same time the Legislature recognizes that local government cannot be constrained to the point that it is impossible to provide necessary services to its residents.
In recognition that the two concepts may be at cross purposes, the Legislature recommends that the program proposed hereunder be instituted on an experimental basis with a review at the end of the period to adjust the program based upon experience.
The court holds that the Cap statute does not impose a line item by line item limitation but rather one on the overall budget to the extent the budget is subject to the statute.
The Cap program as to counties and municipalities is thus an “experimental” one, scheduled to expire by its own terms on December 31, 1979, at the end of a three-year term. See L. 1976, c. 68, § 7. Bills to extend this statute for an additional three years are presently pending in the Legislature. For example, one of these, S-1245, has presently received legislative approval. However, recognizing that
III
Although the amounts and categories vary somewhat from county to county, Hudson County illustrates the problem confronting the counties, and for simplicity examples referable to it will be used. Nevertheless, the conclusions of law apply to all parties. Hudson County asserts that the cost for the care of the mentally ill, welfare costs and judicial costs reflect increases of more than 5% over 1977. However, its actual judiciary appropriation for 1978 decreased $52,147 from the amount appropriated in 1977. Even so, some of the amount attributable to “judicial costs” does not even appear properly includable because certain judicial salary increases payable by a county were enacted subsequent to the Cap statute. See L. 1977, c. 317 (effective January 1, 1978),
The Administrative Director of the Courts and trial court administrators have no power or authority to mandate expenditures, but only act as advisors and aids to the court. Only the court can enter orders. Administrative personnel only act when and as authorized by the court.
Hudson County alleges in its verified complaint an increase in its state-mandated appropriations from $6,950,600 in 1977 to $8,350,600 (approximately 20%) in 1978 for care of the mentally ill and mentally retarded for Hudson County patients at state institutions allegedly required by “demands” placed upon them by defendant Commissioner. It alleges that this causes the “County to eliminate other state mandated essential services.” Presumably it refers to eliminating only those “essential” services mandated before the effective date of the Cap statute because subsequent enactments are not subject thereto. However, these increases were not “mandated” by the Commissioner, but rather by the State Legislature in increasing the 1978 appropriation for specific counties and by the requirements of statute. The amount appropriated is a function of the number of patients and residents from Hudson County being maintained in the state institutions pursuant to a formula set forth in
The uncontroverted affidavits before the court show that the costs for maintenance of mentally ill patients is allocated between the State and the county (and in some instances the family). Under
From 1977 to 1978 the Legislature increased its appropriation in an amount which required the County of Hudson to pay approximately $1,400,000 more than the 1977 appropriation for maintenance of county patients in state institutions. See
Major expense items, and significant items as to the Hudson County budget, are the welfare costs which consist primarily of assistance to families with dependent children (AFDC) (see
The AFDC program is funded primarily under federal law. The Federal Government pays 50% of the cost of the program, State Government contributes 37 1/2%, and the county contributes 12 1/2%. The county‘s actual dollar share is determined by the number of eligible persons and the state appropriation. Based on this percentage formula, established prior to the effective date of the Cap statute, the 1977 actual contributions with respect to Hudson County, as set forth in an uncontroverted affidavit from the Department of Human Services, were as follows:
Federal $27,248,825 50%
State 20,530,284 37 1/2%
Hudson 6,843,428 12 1/2%
___________
$54,622,538
Program 1977 1978 % Increase AFDC $6,997,000 $7,420,000 6+ SSI 811,000 646,000 (-20)
There are discrepancies in the above figures for the 1977 Hudson County contribution and the recommendations for 1977. (Hudson County contributed $153,572 less than recommended, as compared with the figures shown on the 1978 budget for Hudson County, but such variations have no bearing on this decision). Annual per capita AFDC contributions by Hudson County based on the 1977 actual contribution for a January 1977 caseload of 16,543, rose from $413.68 to $433.49 in 1978, using the 1978 recommendation and the December 1977 caseload of 17,117. The caseload increase in Hudson County of 574 would result in an increase of $237,452.32 to 248,823.26, depending on the per capita contribution used. Using the January 1977 per capita contribution as a constant would be without regard to increased costs or inflation.
The counties must also provide for the administration of various welfare programs. Payment of administration costs for these programs is also mandated by statute (see
All parties assume that the formulas relative to appropriations for patient treatment and welfare are subject to the limitations of the Cap statute and are not within the exception of
Where the parties differ, however, is as to the effect of the application of this premise between the State and the counties. The counties argue that the Cap statute therefore requires the State to be mindful of and observe the 5% limitation on the increase in each county tax levy, and not take any action which would require a county to provide for an increased appropriation for these items in excess of 5%. The Attorney General argues that the counties must first accommodate all state mandated requirements not embraced in the exception “mandated by law” after the effective date of the Cap statute, even if the entire 5% limitation would be used up so that a county could not provide for other county functions, whether mandated or discretionary under enabling legislation enacted prior to the adoption of the Cap statute. The parties appear to assume that the term “law,” as used, makes the exception narrowly confined to subsequent statutory law. This will be discussed in Part IV, infra. Neither the counties nor the Attorney General argues that the state appropriation act,6 together with still effective statutes adopted prior to the Cap statute, create either a continuing mandate or a mandated expenditure subsequent to enactment
The Attorney General argues that the Legislature is presumed cognizant of other legislation and that in enacting the Cap statute it was aware of the existing welfare legislation and statutory scheme relative to maintenance of patients which it had previously enacted and which it has funded since the enactment of the Cap statute. Cf. State v. Federanko, 26 N.J. 119, 129 (1958). He then argues that because the Legislature chose to neither expressly repeal nor amend the AFDC legislation in enacting the Cap statute, it should be concluded that the Legislature intended that the provisions of that legislation continue to be given full effect subsequent to the enactment of the Cap statute. Thus, certain of the defendants conclude that because the program is mandatory in all counties, this requires that all funds appropriated by the State Legislature for the AFDC program be expended in order to obtain the maximum benefit of matching federal participation.
The Executive Branch defendants further assert that any doubt as to legislative intent was resolved when the Legislature amended certain sections of the AFDC legislation by L. 1977, c. 127 (see
In response to an argument of plaintiffs that such a result would be unfair in that the State would be imposing upon the counties the responsibility of meeting state obligations at the expense of cutting back on county services, defendants argue that such a position is based on the invalid assumption that there are two classes of programs carried out by the county, one being those of the State, the other being those of the county. The State correctly argues that as creatures of the State the counties can only act on the basis of authority granted by the State.
A county is a creature and subdivision of the State, constituted to perform certain functions of State Government. State v. Rush, 46 N.J. 399, 414 (1966). And, although counties are entities unto themselves by virtue of statute constituting them as bodies politic and corporate,
This is so notwithstanding the provision of the New Jersey Constitution for liberal construction of the Constitution and laws concerning counties. The due process argument has no merit here when considering budget making and legislative discretion, for several reasons. It is clear that counties, like municipalities, “have no rights in their governmental capacities under the Fourteenth Amendment as against the State which created them.” See Williams v. Mayor and Council of Baltimore, 289 U.S. 36, 53 S.Ct. 431, 77 L.Ed.2d 1015 (1933); Trenton v. New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937 (1923), and Bonnet v. State, supra, 141 N.J. Super. at 203. Even if this were not so and did not apply to the individual plaintiffs in this case, whatever their capacity, the result would not be different in this case because the State has discretion here. The United States Supreme Court stated in Trenton v. New Jersey, supra:
All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protests. In all these respects, the state is supreme; and its legislative body, conforming its action to the state Constitution may do as it will, unrestrained by any provision of the Constitution of the United States. * * * The power is in the state, and those who legislate for the state are alone responsible for any unjust or oppressive exercise of it [262 U.S. at 186-187, 43 S.Ct. at 536, 67 L.Ed. at 941.]
The Cap statute is experimental legislation on a temporary basis, and provides for legislative review of its operation. If any program is “necessary and vital,” there are safety valves provided, including the use of emergency procedures under
In addition, no procedural due process question is projected in this case because (1) all budgets, and particularly Hudson County‘s, were adopted in compliance with the Cap statute; (2) the relief sought is essentially declaratory and an interpretation and application of a statute, and (3) it is not applicable to a legislative function or a quasi-legislative process of budget making. See as to the latter point, Ufheil Constr. Co. v. Oradell, 123 N.J. Super. 268, 273 (App. Div. 1973); Bayonne v. Div. of Tax Appeals, 49 N.J. Super. 230, 240 (App. Div. 1958); Yellow Cab Corp. v. Passaic City Council, 124 N.J. Super. 570, 579 (Law Div. 1973); and cf. Trenton v. New Jersey, supra; Consolidation Coal Co. v. Kandle, 105 N.J. Super. 104, 113 (App. Div.), aff‘d 54 N.J. 11 (1969). Compare Hyman v. Muller, 1 N.J. 124, 129 (1948), and In re Masiello, 25 N.J. 590, 600-601 (1958).
Nor is there a factual issue projected as a matter of law which would warrant a different determination in this case based on a claim of lack of substantive due process. No county has suggested that there should be an inquiry into line item allocations or the amounts thereof in a state budget or in a county budget and a judicial review of the merits or priorities thereof as might well be entailed by questions of inadequacy in specific areas and allocations to other purposes.
Furthermore, all the parties stipulated and agreed that there was no testimony required in this case, that all pertinent factual material was before the court and that the issues involved were solely of law. It was expressly requested that the court decide the summary judgment motions and make a determination on the complaint based solely on the papers submitted. The issue being essentially one of law, with no material facts in dispute, it may, therefore, be resolved without the necessity of a testimonial trial.
Clearly the State can not only mandate that the county appropriate sufficient amounts in the county budget to fully implement the challenged spending requirements in the statutory programs or mandates, at least up to the overall
It is possible, although perhaps remote, that state-mandated expenses based on programs mandated prior to the effective date of the Cap statute could use up substantially all or even more than the 5% (exclusive of exceptions) that a county would otherwise be entitled to increase its final appropriations to provide other programs and services to county residents. Whether this would ultimately result in higher costs in the long run, as claimed by the various counties, because of increased costs arising from neglect of roads and highways and possible increased liability claims, as Hudson County projects, is a policy consideration for the Legislature and not the courts. All expenditures and programs not embraced by
The court concludes that the Cap statute was not intended to and does not affect budgetary requirements for maintenance of county patients in state hospitals or with respect to welfare programs, at least within the overall 5% limitation. A different conclusion would be contrary to the mandate of the statutes related thereto and the intent of the Annual Appropriation Act. An appropriation act, in addition to appropriating monies, also has some mandatory implications and reflects the current policy and enactment of the Legislature with respect to preexisting statutory formulas. The repeal by L. 1977, c. 10, of N.J.S.A. 40A:4-45.6, which by its language would have repealed all acts inconsistent with the Cap statute, fortifies this conclusion.
One point remains that requires some amplification. As observed, the exceptions from the restrictions of the Cap statute exclude from its limitations various categories, such as revenue generated by an increase in valuations within the county, capital expenditures funded by sources other than the county tax levy,8 emergency resolutions “according to the definition provided in
Subparagraph (e) of
The Attorney General urges that the word “law” therein means, and should be construed to mean, subject to “statutory law” enacted subsequent to the effective date of the Cap statute. A formal opinion of the Attorney General, F.O. Atty. Gen., No. 3, 1977, in referring to this subsection, stated in part:
While recognizing “this strict construction may cause local governments serious difficulty in preparing their budgets and may force reductions in existing services to provide for inflationary costs of mandatory programs,” the Attorney General concludes these problems must be resolved by further legislative action. A contrary interpretation, his formal opinion concluded, “would limit only the small proportion of expenditures arising out of local initiatives” and “nullify the significance of the words `after the effective date of this act.‘” However, the conclusion is too broad and does not necessarily square with the language used by the Legislature, including the term “act” in the same exception, or the recognition in the policy statement of the Cap statute of the cross-purposes involved and that local governments “cannot be constrained to the point that it is impossible to provide necessary services to its residents.”
It is an established principle in our law that even if all of the litigants agree on an interpretation of the law, that this is not binding on the courts whose principal responsibility it is to interpret the law. See, e.g., Schere v. Freehold Tp., 150 N.J. Super. 404, 408 (App. Div. 1977); and Fivehouse v. Passaic Valley Water Comm‘n, 127 N.J. Super. 451, 457-458 (App. Div. 1974), certif. den., 65 N.J. 565 (1974). Although a formal statutory interpretation of the Attorney General, who as legal advisor to most state agencies has the duty of interpreting statutes pursuant to
It is commonly stated that the Legislature is presumed to know the common usage of phrases and, in the absence of intent to the contrary, to have employed them in their natural and ordinary meaning. Wager v. Burlington Elevators, Inc., 116 N.J. Super. 390, 396 (Law Div. 1971); La Polla v. Union Cty. Bd. of Chosen Freeholders, 71 N.J. Super. 264, 277 (Law Div. 1961); Lloyd v. Vermeulen, 40 N.J. Super. 151, 165 (Law Div.), aff‘d, 40 N.J. Super. 301 (App. Div.), aff‘d 22 N.J. 200 (1956).
In addition, words which have received judicial construction will generally be deemed to have been used by the Legislature in the sense that has been ascribed to them. Safeway Trails, Inc. v. Furman, 76 N.J. Super. 90, 101 (Law Div. 1962), rev‘d 41 N.J. 467 (1964), app. dism. and cert. den., 379 U.S. 14, 85 S.Ct. 144, 13 L.Ed.2d 84 (1964). Compare that case with Quaremba v. Allan, 67 N.J. 1, 14 (1975); Brewer v. Porch, 53 N.J. 167, 174 (1969), and Petition of Keogh-Dwyer, 45 N.J. 117, 120 (1965).
In considering the use of the term “law” in
Absent a clear indication that the language in the statute is to be interpreted otherwise, it is to be read in accordance with its plain and ordinary meaning. Service Armament Co. v. Hyland, 70 N.J. 550, 556 (1976). There is no such clear indication here.
There can be no doubt that the Legislature is well aware of the distinction between the terms “statute” and “law.” A comparison with other statutes illustrates that the Legislature has used the word “statute” as opposed to the broader term “law” when it specifically intended that limitation. Compare
It should be further noted that, contrary to F.O. Atty. Gen. No. 3, 1977, the exclusion in
The court concludes, therefore, that the Legislature did not intend to restrict the word “law” to statutory law but that the term applies broadly to substantive law which
Although this court concludes that the term “law” in subsection 4(e) of the Cap statute includes final judgments and determinations of substantive law of the court, other considerations involving the inherent powers of the court might also preclude a narrower interpretation. See Winberry v. Salisbury, supra; In re Salaries of Probation Officers, 58 N.J. 422, 427 (1971); In re Matter of Court Reorganization Plan of Hudson Cty., 161 N.J. Super. 483, 490 (App. Div. 1978), certif. granted, 77 N.J. ___ (1978).9
In summary, the Cap statute does not, at least up to the percentage limitation of that statute, preclude state officers acting under law from requiring counties to include in their appropriations amounts for items such as maintenance of county patients in state hospitals, welfare programs or support of the judiciary. This is so even assuming the “state-mandated” expenses fall within the categories not excepted from the statute‘s limitations. There was no showing of irreparable harm and no injunction is warranted. There is no due process violation shown although plaintiffs may apply to the courts to establish a basis for consideration of such allegation. In any event, the exceptions as to items subsequently mandated by law is not restricted to statutes and broadens the statutory safety valves for county budgetary limitations. In the declaratory judgment aspect of this case the court determines the proper interpretation of the law to be as specifically held hereinabove.
Accordingly, the motion for summary judgment by defendants is granted and those of plaintiffs-intervenors are denied. The order to show cause of plaintiff and all complaints are dismissed. No costs.
Notes
The Appellate Division concluded in In re Matter of Reorganization Plan of Hudson County, 161 N.J. Super. 483 (App. Div. 1978):
* * * [A] court, and in this case the assignment judge in his administrative capacity, has the inherent power to provide the facilities, personnel and resources reasonably necessary for the performance of the judicial functions in the county. * * * [H]e must have the power to compel the appropriation and expenditure of funds by the coequal executive and legislative branches of government to accomplish such purpose, subject only to bounds of reasonable discretion.
[at 491]
Although the Appellate Division reasoned that this inherent power should only be invoked where adequate action is not forthcoming through conventional channels, that would not detract from the basic power possessed by the judiciary to require expenditure of county funds without statutory limitation.
Restricting the term “law” in the exclusion to only subsequent statutory mandates would possibly conflict with settled precedents in this State, for example: providing for defense of indigents in criminal cases, see State v. Rush, 46 N.J. 399 (1966), and State v. Williams, 46 N.J. 427 (1966); payment of judgments of the court in various actions (see, generally, N.J.S.A. 59:1-1 et seq. and N.J.S.A. 59:13-1 et seq.), as well as condemnation matters; school funding (cf. Robinson v. Cahill, 62 N.J. 473 (1973) cert. den. 414 U.S. 976, 94 S.Ct. 292, 38 L.Ed.2d 219 (1973); pretrial intervention programs (State v. Leonardis, 71 N.J. 85 (1976), on reh. 73 N.J. 360 (1977)), authority to assure provision of adequate staffing of the county prosecutor‘s office with respect to the criminal business of the courts (cf. In re Application of Bigley, 55 N.J. 53 (1969), and N.J.S.A. 2A:158-7). It seems unlikely that such matters would depend only on formal emergency appropriation procedures and the limitations thereof.