When the Governor signed ABx4 1-the bill that revised the 2009-10 Budget Act-and accompanying trailer bills this morning, he line-item vetoed about $500 million in General Fund expenditures in order to ensure that the state has a reserve for 2009-10.
Budget staff from both the Senate and Assembly worked closely with Legislative Counsel in construction of ABx4 1 and, based on that work, and follow-up conversations, we think that these vetoes-especially those of health and human services programs-are outside the Governor's Constitutional authority, for a couple of reasons.
First, reductions to amounts in the various budget schedules do not actually constitute appropriations and, thus, are not subject to line item veto. This argument is bolstered by Counsel's long-held view that, unlike new or increased items of appropriation, the Legislature may reduce General Fund items of appropriation with a simple majority vote, and any General Fund action that takes place with a simple majority vote is not, by definition, an appropriation, and therefore not subject to line-item veto.
Second, most of the budget revisions for the health and human services departments were not even included in the scheduled items, but instead were placed in Sections of 568 to 575 of ABx4 1. These sections of the bill added new Control Sections 17.50 to 18.50 to the 2009-10 Budget Act that reduced the various appropriations for HHS departments in a descriptive manner, thus making it even clearer that they do not constitute appropriations. These control sections include departments that were specifically included in the Governor's line-item vetoes-Aging, Health Care Services, Public Health, MRMIB, Mental Health, Developmental Services, and Social Services.
Should the Controller implement these vetoes, we suspect that some party that will be injured by the vetoes will file a lawsuit. Given the sweep of the reductions, this could come from any of a number of potential plaintiffs, such as children who will no longer have health insurance because of the reductions to Healthy Families Programs, battered women's shelters that will be threatened with closure because of elimination of funding for the Domestic Violence Program, AIDS prevention and treatment programs that will no longer receive state support because of the elimination of Office of AIDS funding, or counties that will see cuts to their Child Welfare Services or Medi-Cal administration funding.
