State ex rel. Candelaria v. Grisham
2023-NMSC-031 (2023)
Rule of Law:
When federal funds are provided to a state with broad discretion as to their use, they are subject to legislative appropriation under the state constitution's separation of powers doctrine, rather than executive administration.
Facts:
- The federal government, through the American Rescue Plan Act of 2021 (ARPA), provided approximately $1.75 billion in COVID-19-related financial assistance to New Mexico.
- ARPA established the Coronavirus State Fiscal Recovery Fund, intended to support state, local, and tribal governments in responding to the impact of COVID-19 and its efforts to contain the virus.
- ARPA specified four broad eligible uses for these funds, including responding to the public health emergency, providing premium pay to essential workers, offsetting revenue reductions, or investing in water, sewer, or broadband infrastructure, offering states significant discretion.
- The New Mexico Legislature attempted to appropriate the ARPA funds through the General Appropriation Act of 2021.
- Governor Michelle Lujan Grisham vetoed the portions of the Act that related to ARPA funds, asserting that the Legislature lacked the authority to direct the Executive's administration of federal funds.
- Prior to the commencement of the legal proceeding, Governor Lujan Grisham spent approximately $600 million of the $1.75 billion in ARPA funds received by New Mexico, leaving about $1.08 billion remaining.
Procedural Posture:
- State Senators Jacob R. Candelaria and Gregory Baca, as Petitioners, filed an original proceeding in the Supreme Court of New Mexico against Governor Michelle Lujan Grisham, seeking a writ of mandamus to prohibit her from expending any additional ARPA funds.
- Petitioners also requested a stay prohibiting further expenditure, which the Supreme Court of New Mexico denied.
- The Supreme Court of New Mexico requested responses from Governor Lujan Grisham and from Tim Eichenberg, the New Mexico State Treasurer, who was named as a real party in interest.
- Four additional state senators (K. Joseph Cervantes, Daniel Ivey-Soto, George K. Muñoz, and Gerald Ortiz y Pino) were allowed to intervene as petitioners.
- The Supreme Court of New Mexico heard oral arguments from all parties.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the New Mexico Legislature or the Governor have the constitutional authority to appropriate and control the expenditure of federal funds provided to the state with broad discretion as to their use, such as those from the American Rescue Plan Act (ARPA)?
Opinions:
Majority - Justice Vargas
Yes, the New Mexico Legislature has the constitutional authority to appropriate and control the expenditure of federal funds provided to the state with broad discretion, like the ARPA funds. The Court adopted a "totality of the circumstances" approach to resolve the separation of powers question, emphasizing the amount of discretion the federal government affords to state recipients in spending federal funds. The Court reasoned that when funds come with specific federal conditions, the executive branch merely administers them; however, when a state retains wide discretion, such funds must be appropriated by the Legislature as a constitutionally reserved function. The language of ARPA, reinforced by federal regulations and rules, demonstrates broad flexibility through numerous categories and subcategories of eligible uses, allowing recipients to allocate funds to programs or services not explicitly enumerated, provided they meet statutory objectives. The New Mexico Constitution (Art. IV, Sec. 30) explicitly vests the power to appropriate money exclusively with the Legislature, requiring that appropriations "distinctly specify the sum appropriated and the object to which it is to be applied." Allowing the Governor to unilaterally control these funds would cause her to exceed her power to "execute the laws" (Art. V, Sec. 4) and instead exercise the Legislature’s constitutional prerogative to assess "how, when, and for what purpose" public funds would be used, thereby disrupting the proper balance of power between the executive and legislative branches. The Court rejected the Governor's argument that prior rulings in Sego and Carruthers established a categorical rule precluding legislative appropriation of all federal funds, clarifying that those cases were limited to specific contexts (e.g., higher education institutions, improper legislative conditions). The Court also dismissed the Governor's contention that ARPA funds held in a "suspense account" are exempt from appropriation, stating that NMSA 1978, Sections 6-10-3(C) and 6-10-41 are accounting provisions that do not subvert constitutional authority, and funds become property of the state and must be transferred from suspense accounts before they are spent.
Analysis:
This decision significantly clarifies the allocation of power between the New Mexico executive and legislative branches regarding federal funds. By establishing a 'totality of the circumstances' test focused on the degree of discretion provided by federal grants, the Court provides a crucial framework for evaluating future federal funding. It strongly reinforces the Legislature's constitutional role in appropriating funds and prevents the executive branch from unilaterally controlling substantial, broadly designated federal moneys. This ruling underscores the importance of maintaining the separation of powers and ensuring democratic oversight over public expenditures, which will likely influence how future federal aid packages are managed and debated within the state.
