St. John's Well Child & Family Center v. Schwarzenegger
239 P.3d 651, 50 Cal. 4th 960, 116 Cal. Rptr. 3d 195 (2010)
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Rule of Law:
A legislative bill that amends a budget act by reducing previously enacted appropriations contains "items of appropriation" under the California Constitution. Therefore, such a bill is subject to the Governor's line-item veto power, which allows the Governor to further reduce or eliminate those items.
Facts:
- On February 20, 2009, Governor Arnold Schwarzenegger signed the 2009 Budget Act into law, which established appropriations for the fiscal year.
- Following the enactment of the budget, California's economy worsened, and state revenues fell significantly below the projections upon which the budget was based.
- In response, Governor Schwarzenegger declared a fiscal emergency and convened a special legislative session to address the budget shortfall.
- The Legislature passed Assembly Bill 4X 1, which amended the 2009 Budget Act by making substantial spending reductions across various state programs to address a deficit exceeding $24 billion.
- Upon receiving Assembly Bill 4X 1, Governor Schwarzenegger used his constitutional line-item veto authority to impose further reductions on several of the spending items that the Legislature had already cut.
- The Governor's additional reductions, totaling over $488 million, affected numerous health and welfare programs, including those serving clients of St. John's Well Child and Family Center and other petitioners.
Procedural Posture:
- St. John’s Well Child and Family Center and other entities (petitioners) initiated an original writ proceeding in the California Court of Appeal, First Appellate District.
- The petitioners sought a writ of mandate to enjoin the State Controller from enforcing Governor Schwarzenegger's line-item reductions in Assembly Bill 4X 1.
- The President pro Tempore of the California Senate and the Speaker of the Assembly intervened in the case to support the petitioners.
- The Court of Appeal exercised its original jurisdiction and issued a decision denying the petition, thereby upholding the Governor's actions.
- The California Supreme Court granted review of the Court of Appeal's decision.
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Issue:
Does the Governor's use of the line-item veto to further reduce appropriation amounts that the Legislature had already reduced in a mid-year budget adjustment bill violate Article IV, section 10(e) of the California Constitution?
Opinions:
Majority - George, C. J.
No. The Governor's use of the line-item veto on a bill containing legislative reductions to prior appropriations does not violate the California Constitution because such reductions are themselves "items of appropriation." The court reasoned that spending authority, whether it is being increased or decreased, fundamentally remains spending authority. A legislative act that sets aside a definite sum of money for a designated public purpose constitutes an "item of appropriation," even if that sum is less than what was previously authorized. To hold otherwise would allow the Legislature to shield mid-year budget changes from the Governor's constitutional check by framing them as "reductions" rather than new appropriations, defeating the purpose of the line-item veto, which was created to empower the Governor to reduce spending to meet the state's financial condition. The court found no substantive difference between the Governor's power to reduce an item in an original budget act and the power to reduce the same item in a subsequent amending act.
Analysis:
This decision significantly clarifies and strengthens the California Governor's executive power during fiscal crises. It establishes that the Governor's line-item veto is not a one-time power limited to the initial annual budget, but a continuing authority that applies to any subsequent legislation that modifies appropriations, including mid-year cuts. This precedent prevents the Legislature from using procedural framing—characterizing spending changes as mere "reductions"—to insulate budget adjustments from the Governor's veto. The ruling solidifies the Governor's role as a powerful check on legislative spending decisions, ensuring executive oversight throughout the fiscal year, particularly when the state's financial condition deteriorates.
