437 Mass. 172 | Mass. | 2002
The plaintiffs commenced this action in the Supreme Judicial Court for the county of Suffolk pursuant to G. L. c. 214, § 1, challenging actions taken by the defendant State officials and by the Acting Governor
On November 21, 2001, the Legislature enacted its fiscal year 2002 general appropriations act. St. 2001, c. 177. The State subsequently experienced a decline in revenues, well beyond expectations, and, on February 5, 2002, the acting Commissioner of Administration (commissioner) informed the Governor that available revenues for fiscal year 2002 would be insufficient to meet authorized expenditures. The projected shortfall was $289 million. Relying on information and recommendatians of the fiscal affairs division,
General Laws c. 29, § 9C, provides that:
“Whenever, in the opinion of the commissioner of administration, available revenues as determined by him from time to time during any fiscal year under the provisions of (§ 5B8 ] will be insufficient to meet all of the expenditures authorized to be made from any fund, whether by appropriation or distribution, he shall immediately notify the governor and the house and senate committees on ways and means of the amount of such probable deficiency of revenue and the governor, within fifteen days of such notification, shall reduce allotments*175 under [§ 9B9 ] or he shall submit to the general court specific proposals to raise additional revenues by a total amount equal to such deficiency.
“As an alternative to the submission of such proposals to raise additional revenues and to the extent funds are available, the governor may recommend an appropriation equal to such deficiency from the Commonwealth Stabilization Fund in the manner provided in [§ 2H10 ].”
The Governor responded to the projected budget deficit by directing the commissioner to implement the recommended al
1. We consider first the defendants’ claim that the plaintiffs lack standing to bring this action. Eight of the plaintiffs are organizations that sponsor, support, or administer tobacco control programs and other cancer-related health initiatives. Several had extended contracts with the Department of Public Health to receive funding for these programs in fiscal year 2002. The record indicates that, as a direct result of the § 9C allotment reductions, they have not received promised funding and have been forced to scale back, or eliminate, their programs.
Each of the plaintiff organizations has been “directly and specially” affected by the Governor’s action. Brookline v. The Governor, 407 Mass. 377, 384 n.10 (1990). Moreover, because the underlying contracts are (presumably) still in existence, we can infer that, should the monies represented by the § 9C allotment reductions at issue be forthcoming, the promised funding to the plaintiff organizations would be restored.
2. The plaintiffs maintain that the Governor’s allotment reductions were improper uses of her statutory authority under G. L. c. 29, § 9C. Their claim is premised on the language of the statute, which directs the commissioner to notify the Governor when “available revenues . . . will be insufficient to meet all of the expenditures authorized to be made from any fund.” The plaintiffs argue that “any fund” means “any [one] fund,” and the Governor’s authority under § 9C thus extends only to “reducing] allotments” which are derived from that particular fund. Because the challenged allotment reductions were derived from three funds — the Health Protection Fund, see G. L. c. 29, § 2GG, the Tobacco Settlement Fund, see G. L. c. 29, 2XX, and the General Fund, see G. L. c. 29, § 2 — that were neither in deficit at the time of the reductions, nor projected to be in deficit by the end of the fiscal year, the plaintiffs assert that the Governor’s authority under § 9C to reduce those allotments was not triggered. Accordingly, the plaintiffs urge this court to restore funding for the various health-related initiatives and programs represented by the line items in question.
The defendants respond that the Governor’s authority under § 9C is triggered not whenever a deficit is projected for any particular fund, but solely when an over-all budget shortfall is projected for the fiscal year.
Aside from the ambiguous reference to “any fund,” the language of the statute is specific and direct: the commissioner “shall immediately notify the governor and the house and senate committees on ways and means” of a probable deficiency and, within fifteen days of such notification, the Governor must take one of three actions. She may either (1) “reduce allotments under [§ 9B]”; (2) “submit to the general court specific proposals to raise additional revenues”; or (3) “recommend an appropriation . . . from the Commonwealth Stabilization Fund.”
The above mandates are set in motion whenever “available revenues as determined by [the commissioner] . . . under the provisions of [§ 5B]” are projected to be insufficient to meet “all of the expenditures to be made from any fund.” Section 5B, in turn, speaks of “total available revenues.” The statute does not require the commissioner to determine available revenue on a fund-by-fund basis.
Reporting requirements found elsewhere in the statutory scheme also appear to speak unambiguously of a single deficiency to be reported under § 9C. See G. L. c. 29, §§ 9D & 9E. Whén “any officer” anticipates that Federal, or other,
Our conclusion is also supported by general principles under which our State finance system operates. The Commonwealth accounts for its finances through a system of “funds.”
As a matter of cash management and flow, however, the Commonwealth maintains its cash resources in pooled accounts entirely disassociated with any particular fund. See G. L. c. 29, § 23. This system assumes that sufficient funds will exist in the State treasury to cover each allotment made by the Governor pursuant to § 9B. From an accounting standpoint, some funds are routinely in a deficit condition; other funds may vary from having positive to negative balances throughout the year.
If the plaintiffs’ interpretation of § 9C is correct, a projected deficit in any fund, even the most minor, could require the Governor’s immediate response, in the form of acting to reduce allotments under § 9B; submitting to the Legislature proposals to raise taxes; or recommending to the Legislature an appropriation from the Commonwealth Stabilization Fund equal to the deficiency. The Legislature could not have intended the occurrence of what is, apparently, an ordinary event from an account
3. We turn now to the plaintiffs’ claim that the above construc
We have defined the power of appropriation as the authority “to set apart from the public revenue a certain sum of money for a specified object, in such manner that the executive officers of the government are authorized to use that money, and no more, for that object and for no other.” Opinion of the Justices, 323 Mass. 764, 766 (1948), quoting State v. Moore, 50 Neb. 88, 96 (1896). It is beyond question that “[t]he power to appropriate money of the Commonwealth is a legislative power. Under the Constitution it can be exercised only by the General Court and in the particular manner prescribed.” Opinion of the Justices, 302 Mass. 605, 612 (1939). See Opinion of the Justices, 375 Mass, at 832. It is equally clear, however, that “the activity of spending money is essentially an executive task.” Id. at 835. Thus, we speak in abstract terms of separation of powers; in reality, some overlap is inevitable, and may well be desirable. See Chief Admin. Justice of the Trial Court v. Labor Relations Comm’n, 404 Mass. 53, 56 (1989), citing Opinion of the Justices, 365 Mass. 639, 641 (1974); Opinion of the Justices, 375 Mass, at 835; Opinion of the Justices, 302 Mass, at 615. Two key concepts are determinative of our analysis: (1) a statute may not constitutionally allow the Governor to exercise the appropriation power; but (2) a statute may grant the Governor discretion to determine how to spend appropriated funds, or, in
Section 9C confers on the Governor neither the authority to set aside money from the treasury to be spent for a particular purpose, nor the authority to direct that any money so appropriated be spent in a manner different from what the Legislature intended. See id. at 834-835 n.2 (“the Governor . . . cannot use funds appropriated for one purpose to augment funds earmarked for a second purpose”). Instead, § 9C permits the Governor to use her executive judgment to reduce public expenditures in a time of true financial emergency. See Opinion of the Justices, 369 Mass, at 993. This obligation conforms to the constitutional requirement for a balanced budget. See art. 63, § 2, of the Amendments to the Massachusetts Constitution, as amended by art. 107 of the Amendments. It reflects a legislative determination that the Commonwealth’s need to remain solvent overrides particular statements of social policy contained in those appropriation items subject to allotment under § 9B. It is an expression of the Legislature’s recognition that the executive branch has the “detailed and contemporaneous knowledge regarding spending decisions” to enable necessary reductions to be made on an expedited basis, and the Legislature’s confidence
The probability the Governor might abuse her authority under § 9C to reduce, or eliminate altogether, funding for certain programs based on her own ordering of social priorities, is minimal. “To the contrary, the Governor is bound to apply [her] full energy and resources, in the exercise of [her] best judgment and ability, to ensure that the intended goals of legislation are effectuated.” Id. at 834. As has been discussed above, allotment reductions under § 9C are applicable only to appropriations to certain State agencies, as provided in § 9B. In addition, § 9C limits the total amount of allotment reductions to an “amount equal to such [revenue] deficiency.” Finally, the Governor can reduce only the allotment; the underlying appropriation remains fully in force to establish an upper limit on what may be spent for that line item, should sufficient revenue be forthcoming. It should not be overlooked either that § 9C requires that the Legislature be put on notice when a projected budget deficit triggers the statute’s operation. To the extent that the Legislature chooses, it retains full authority to restore funding to programs affected by § 9C allotment reductions, by enacting legislation to transfer funds from the Commonwealth Stabilization Fund or to raise additional revenues to make up for any budget deficiency. Further, the Legislature may pass “conditions” to items in an appropriation bill, exempting the funds in question from allotment reductions under § 9C. See Opinion of the Justices, 375 Mass, at 834 n.2. The over-all plan effects a balance between the authority of the executive, who is in charge of the day-to-day operations of a considerable sector of State government, and the authority of the Legislature, which generally has the final word in matters of the purse, and which receives notice of the Governor’s actions and has the ultimate right to undo anything done by her under the statute.
4. We remand the case to the county court for the entry of a judgment declaring that the Governor’s reduction of allotments pursuant to G. L. c. 29, § 9C, was proper and constitutional.
So ordered.
The plaintiffs properly did not name the Acting Governor as a defendant. See Milton v. Commonwealth, 416 Mass. 471, 475 (1993), and cases cited.
The plaintiffs also seek an injunction requiring the defendants “to take all reasonable and necessary steps to fulfill the obligation to disburse the funds appropriated by” the five line items at issue. In view of our conclusion that the challenged actions were lawful, we need not reach the issue of the propriety of injunctive relief.
Pursuant to his authority under G. L. c. 12, § 3, the Attorney General appointed a special assistant attorney general to represent the defendants on all claims brought by the plaintiffs. The single justice subsequently allowed the Attorney General’s motion to intervene pursuant to G. L. c. 231 A, § 8. The American Heart Association, the Massachusetts Medical Society, the Mas
According to the parties’ statement of agreed facts, the fiscal affairs division based its recommendations, at least in part, on information provided by ' the agencies respecting which accounts might be reduced and by what amounts.
The commissioner also recommended introducing legislation “to reduce the Fiscal Year 2002 contribution to the Commonwealth’s unfunded pension liability by $134 million.”
Section 5B requires the Commissioner of Administration (commissioner), on a triannual basis, to “prepare and submit to the governor, to the house and senate committees on ways and means, and to the joint committee on taxation revised estimates of revenue available to meet appropriations and other needs in the current fiscal year . . . accompanied by] explanations of any changes ... for specific sources of revenue.”
Section 9B requires the Governor to divide annual appropriations made to State agencies into periodic allotments which represent the total amount of money that the agency may spend during that period. “In this way, it is generally expected that an appropriation will be expended proportionately over the course of a fiscal year.” Brookline v. The Governor, 407 Mass. 377, 381 (1990). Section 9B reads, in pertinent part, as follows:
“Any monies made available by appropriation or otherwise, to state agencies under the control of the governor or a secretary, but not including the courts, the office of the governor, or the office of the lieutenant governor, shall be expended only in such amounts as may be allotted as provided in this section. The governor shall from time to time divide each fiscal year into allotment periods of not less than one month nor more than four months. The governor or the commissioner when designated in writing by the governor shall allot to each such state agency the amount which it may expend for such period out of the sums made available to it by appropriation or otherwise. The amount so allotted initially by the governor or the commissioner shall be equal to an amount calculated in accordance with the following formula: the annual sum available for expenditure divided by twelve multiplied by the number of months in the allotment period, unless the full legislative objective of an appropriation would be accomplished, without amendment, by a lesser allocation than that required by the formula.”
Section 2H establishes the Commonwealth Stabilization Fund, as a reserve to be used:
“(1) to make up any difference between actual state revenues and allowable state revenues in any fiscal year in which actual revenues fall below the allowable amount and (2) to replace the state and local loss of federal funds or (3) for any event which threatens the health, safety or welfare of the people or the fiscal stability of the commonwealth or any of its political subdivisions. Such event or events, as determined by the general court, shall include ... a substantial decline in economic indicators which result in severe reductions in state revenues or state financial assistance to local governmental units, or court ordered or
Specifically, the Massachusetts Prevention Center-Metro West/West (which had entered a contract to receive $136,602 in funding for smoking prevention purposes, and $4,820 for education materials on the risks of, and need for periodic screening for, prostate cancer); the Tobacco-Free Greater Franklin County Coalition and the Tobacco Treatment Outreach Program, both within the Franklin Regional Council of Governments (which had entered a contract , to receive $120,000 and $60,000, respectively); the Tobacco Outreach & Referral Program at Athol Memorial Hospital (which had entered a contract to receive $30,000 in funding); and the Tobacco Outreach & Referral Program at
The remaining three plaintiffs are individuals who provided, or received, services under a program within the department of public health providing intensive case management and care coordination services for individuals living with multiple sclerosis (MS Pass program). As a result of the § 9C allotment reductions, the MS Pass program was eliminated. Consequently, one plaintiff lost her job, and two have failed to receive promised reimbursement for expenses relating to their condition. Because we conclude that the organizational plaintiffs have standing in these circumstances, we need not consider whether the same holds true for the individual plaintiffs. See Massachusetts Teachers Ass’n v. Secretary of the Commonwealth, 384 Mass. 209, 214 (1981); Save the Bay, Inc. v. Department of Pub. Utils., 366 Mass. 667, 674-675 (1975).
All State agency contracts of this kind must contain a clause allowing the agency to terminate the contract in the event that funding becomes unavailable. There is nothing in the record, however, to indicate that the contracts in question have been terminated.
We take note of the fact that the Attorney General neither joins, nor opposes, the administration’s position on this issue.
The Commonwealth Stabilization Fund, see note 10, supra, is funded from a portion of the consolidated net surplus in State funds at the close of the fiscal year. See G. L. c. 29, §§ 2H & 5C. The fund’s purpose is “to create and maintain a reserve” available in the event of fiscal emergencies. Opinion of the Justices, 430 Mass. 1201, 1202 (1999).
The record shows, however, that, in his past two § 5B reports, the commissioner has included a breakdown of at least three major funds (the General Fund, the Highway Fund, and the Local Aid Fund).
A “[f]und” is defined as “an accounting entity established by general or special law to record all the financial resources or revenues together with all related expenditures or liabilities that are segregated for a particular purpose.” G.L. c. 29, § 1.
For example, G. L. c. 64C, § 7C, provides that revenues collected on cigarettes are to be credited to the Health Protection Fund, G. L. c. 29, § 2GG, and expended, subject to appropriation, primarily on education, advertising, and various programs devoted to smoking prevention and cessation. In a likewise manner, G. L. c. 29, § 2XX, provides that certain revenues are to be credited to the Tobacco Settlement Fund and expended, subject to appropriation, for the propose of funding health-related services and programs. Although the plaintiffs characterize the challenged reductions as “especially egregious ... in the case of the Health Protection Fund and the Tobacco Settlement Fund,” they state in their brief that “the meaning of [§ ] 9C does not vary by the particular ‘fund’ involved.”
The Legislature does have the option of requiring that certain funds may not run deficits. See, e.g., G. L. c. 29, § 2BBB (Supp. 2001) (providing that the One-Time Capital Projects Improvement Fund “shall at no time during the fiscal year have a negative fund balance”); St. 2001, c. 177, § 2B (providing that “no expenditures shall be made from [the Intragovernmental Service Fund, G. L. c. 29, § 2Q] which would cause said fund to be in deficit at the close of fiscal year 2002”). Or, the Legislature may create trust funds for a dedicated purpose and not subject to appropriation. See G. L. c. 29, § 1.
This is not to say that a deficit in a fund has no legal significance. The comptroller is responsible for ensuring that budgetary control is maintained on an individual appropriation account basis. See G. L. c. 7A, § 12; G. L. c. 29, § 5C. To resolve deficits reported in budgeted funds, he may recommend that the Legislature authorize the transfer of monies from other budgeted funds with surplus balances.
We have searched for legislative history and discovered none that is of any value to this problem of interpretation.
The record indicates that, in 1990, the then Governor authorized § 9C allotment reductions across a wide variety of agencies and programs, in response to a major fiscal crisis. The parties agree that G. L. c. 29, § 9C, has been invoked very sparingly.
In Brookline v. The Governor, 407 Mass. 377 (1990), this court upheld a challenge to the Governor’s authority under G. L. c. 29, § 9C, to withhold funds for local school aid, commonly called Chapter 70 aid, appropriated in the fiscal year 1990 budget. Because we held in that case that the funds at issue were not “made available ... to [Sjtate agencies under the control of the governor or a secretary,” and so were not subject to allotment reductions under §§ 9B and 9C, see id. at 381, we did not reach issues, raised by the plaintiffs and amici, regarding in what circumstances § 9C allotment reductions properly may be made. See id. at 381-382 n.5; id. at 386 (Liacos, C.J., concurring). We note, however, that, in the Brookline opinion, we generally described § 9C as a statute that “allows the Governor to reduce allotments under § 9B, in certain circumstances, when available revenues during a fiscal year will be insufficient to meet authorized expenditures.” Id. at 380. This description fully comports with our interpretation of the statute today.
We reject the plaintiffs’ summary argument that we should limit the Governor’s authority under G. L. c. 29, § 9C, to make only “pro rata reductions across all line Item appropriations to be paid out of a particular fund,” or, alternatively, across all expenditures subject to allotment under § 9B. A requirement that a budget shortfall must be addressed with uniform allotment reductions is noticeably absent from the statute and, in our opinion, could produce arbitrary results. See Opinion of the Justices, 375 Mass. 827, 836 (1978).
No one can disagree with the fact that the plaintiff organizations provide valuable and much needed public health services to communities of the
That portion of the budget subject to allocation under G. L. c. 29, § 9B.
The parties cite to decisions of appellate courts from other States. Some, considering statutory schemes that operate in essentially the same fashion as ours do, have, not surprisingly, reached similar results. See, e.g., University of Conn. Chapter, AAUP v. The Governor, 200 Conn. 386 (1986). There are some, considering other schemes, that have reached different results. See, e.g., Chiles v. Children A, B, C, D, E, & F, 589 So. 2d 260 (Fla. 1991). We do not consider out-of-State authority particularly helpful in construing our statutes or in dealing with the Massachusetts Constitution. See Barnes v. Secretary of Admin., 411 Mass. 822, 829 n.8 (1992), and cases cited.