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Schwarzenegger's budget cuts were legal

The governor's use of the line-item veto to reduce spending was within his authority.

August 10, 2009|Andrea Lynn Hoch and Jennifer Rockwell | Andrea Lynn Hoch is the legal affairs secretary for Gov. Arnold Schwarzenegger. Jennifer Rockwell is chief counsel, California Department of Finance.

Gov. Arnold Schwarzenegger promised the people of California a balanced budget that closes the deficit and includes a healthy reserve that would allow us to respond to natural disasters and serve as a cushion in case revenues continue to fall. Yet two weeks ago, the Legislature sent the governor a budget that not only lacked a reserve but left our state $157 million in the red.

Therefore, the governor used his customary, constitutional line-item-veto authority to make additional cuts in spending. These cuts close the entire deficit and leave our state with a prudent $500-million reserve.

Over the last week, legislators, the state controller and the Los Angeles Times have questioned whether the governor has the legal power to make additional cuts to this budget. We contend that the state Constitution and court decisions show that there is no doubt: The governor acted within his authority, and his spending cuts are legal.

No one questions the governor's ability to veto and even reduce appropriations. However, the legislative counsel -- the attorneys for the Legislature -- have concluded that the reduction of a previously approved appropriation is not an item of appropriation, and therefore it cannot be further reduced by the line-item veto. Part of the argument against the governor's actions is, put simply, that in the case of an amended budget, cuts are not appropriations.

We argue, however, that characterizing these reductions as something other than appropriations is not supported by law and is simply wrong.

What constitutes an "appropriation" has been long set in California law. All that is required is a fund source, an amount and a purpose.

According to case law going back to 1890, it is the clear intent of the Legislature to provide that a certain sum of money -- and no more than that sum -- may be spent out of a particular fund on a particular activity.

Relying on this more than 100-year-old definition, the amended budget that was sent to the governor in late July contained appropriation items that increased state spending and appropriation items that reduced it. In other words, regardless of whether spending was increased or decreased, each item is an appropriation.

Indeed, as the legislative counsel states on the front of the printed budget bill, the bill is "an act ... relating to the state budget, making an appropriation therefore." Additionally, the state Constitution has been interpreted as saying that a budget bill can only contain appropriations.

The Constitution also clearly provides that "the governor may reduce or eliminate one or more items of appropriation while approving other portions of a bill." Any time the Legislature presents an appropriation to the governor, he can reduce it or eliminate it. We believe this authority extends to any bill containing any appropriation passed by a majority or a supermajority vote, regardless of when it was enacted.

Had the Legislature not presented these new, smaller appropriations to the governor, he would have had no power to reduce them. Indeed, there were items that the Legislature chose not to re-appropriate and place before the governor in the amended budget it passed at the end of July. Original budget appropriations not placed in the amended budget could not be and were not blue-penciled.

There is also a state Supreme Court case that bears on these issues. It indicates that the wording of items as reductions does not mean that they are not appropriations. In 1923, when discussing the governor's newly created power to blue-pencil in the case of Wood vs. Riley, the court stated that "whenever the Legislature [says] in any bill appropriating money that a specified sum of money raised by taxation shall be spent for a specified purpose, and that alone ... no matter what language it may be disguised under, it is, nevertheless, within both the spirit and letter of the Constitution, an 'item' within the bill, and may be disapproved by the governor without affecting any other items of appropriation contained therein."

We understand that legislators are upset about the governor's actions, but the argument that he acted illegally because the reductions in the amended budget bill were not appropriations falls flat. His additional cuts to the amended budget are not some power grab or an attempt to circumvent the state Constitution.

He had before him difficult decisions. He promised the people a balanced budget, and he appropriately used his veto pen to deliver on that promise.

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