Lawsuit Is One of Two Cases Filed In State Court That Claims Governor’s Line Item Vetoes of Revised State Budget In July Was Illegal – Line Item Vetoes Impact Additional Cuts That Were Made To Regional Centers, Children’s Healthcare, Medi-Cal, IHSS, Senior Programs

SACRAMENTO - A lawsuit seeking to reverse additional spending cuts to a wide range of programs impacting people with disabilities, mental health needs, the blind, seniors and low income families made by Governor Arnold Schwarzenegger in late July using his “line-item veto” power was heard in the State Court of Appeals in San Francisco Tuesday (Dec. 15) morning.

The state Court of Appeals heard oral arguments (hearing where attorneys from each side present their side of the lawsuit) at the court hearing that was scheduled for 09:30 AM Tuesday morning and took the case under submission (meaning the State Court of Appeals will consider what they heard and read and decide what to do next on the lawsuit). It is not certain when the court will act next on this case.

Case Is One of Two State Lawsuits On the Governor’s Line Item Vetoes

The case, St. John’s Well Child and Family Center et al v. Schwarzenegger et al, is one of two separate state lawsuits filed in two different state courts dealing with the Governor’s line item vetoes made in late July.

Both lawsuits claim that the State Constitution only allows a governor to veto "items of appropriation” and that the line item veto power does not apply to a revised budget where funding was previously approved and enacted – in this case in February when the 2009-2010 State Budget was passed by the Legislature and approved by the Governor four months early (before July 1 – the start of the state budget year).

Governor Made $489 Million In Additional Cuts In July Using Line Item Veto

The Governor in late July made additional reductions of over $489 million using his line item veto power (which allows a governor to reduce the amount of money appropriated by the Legislature for a specific line item in the state budget).

About $394 million of that amount were reductions made in health and human service related programs, including over $37 million in funding to In-Home Supportive Services Public Authorities, an additional $50 million for services and supports for children up to age 5 funded through the 21 non-profit regional centers and an additional $50 million reduction in funding to Healthy Families.

Court Hearing Comes Just Weeks Before New Budget Will Be Proposed

The court hearing comes just weeks away when the Governor is expected to submit the Legislature (likely on January 8th, Friday) his proposed 2010-2011 State Budget that will likely contain new proposed major spending cuts in order to close what budget analysts now predict will be a over $20 billion shortfall. That figure includes a nearly $7 billion deficit for the current state budget year that will likely mean mid-year spending cuts that the Governor will make in the next few weeks when he releases his proposed 2010-2011 State Budget.

Lawsuit Filed By Several Public Interest Law Groups

The state lawsuit, “St. John’s Well Child and Family Center, et al v. Arnold Schwarzenegger, et al.” (case number A125750) was filed August 12, 2009 by 4 public interest law groups: Disability Rights Advocates (DRA), Western Center on Law and Poverty, Neighborhood Legal Services and Kirkland & Ellis LLP. [see CDCAN website for copy of the original lawsuit at www.cdcan.us ]

The public interest law groups are representing 8 advocacy organizations and individuals (listed in the order in the lawsuit): St. John’s Well Child and Family Center (a community health center); Rosa Navarro; Lionso Guzman; California Foundation for Independent Living Centers; Nevada-Sierra Regional In-Home Supportive Services Public Authority; Californians for Disability Rights; Liane Yasumoto; and Judith Smith).

The lawsuit was filed against Governor Schwarzenegger, as the chief executive officer of the State and State Controller John Chiang, in his capacity as the independently state elected official responsible for paying the state’s bills.

Several other groups not actually part of the lawsuit filed legal documents (“amicus curiae” or “friend of the court” briefs ) in support of the case including Children Now, Valley Community Clinic, Eisner Pediatric and Family Medical Center, the Saban Free Clinic, YWCA Monterey County, Westside Family Health Center, Community Clinic Association of Los Angeles County, the Legal Aid Association of California, SEIU California State Council, United Domestic Workers, the California United Homecare Workers, the Los Angeles County Democratic Central Committee, the County of Santa Clara.

Normally State Lawsuits Filed First In State Superior Court

Normally the State Court of Appeals would not hear a lawsuit until a lower court – in this instance, the State Superior Courts – heard the case.

Attorneys filing the lawsuit said in the lawsuit that the case was submitted to the Court of Appeals – bypassing the Superior Courts – because of the “great public importance” that requires a “prompt” resolution of the “separation of powers” issue by the higher court.

Steinberg Filed Similar Legal Action – But Also Supports St. John’s Lawsuit

Both Senate President Pro Tem Darrell Steinberg (Democrat – Los Angeles), who has filed a separate but similar lawsuit, and Assembly Speaker Karen Bass (Democrat – Los Angeles) in August filed court documents in support of the St. John’s Well Child and Family Center v. Schwarzenegger et al lawsuit.

The State Court of Appeals in September granted both legislative leaders their request to be a part of the lawsuit as “intervenors” – meaning that they are now parties to the lawsuit with a strong or compelling interest in the case.

The Darrell Steinberg v. Arnold Schwarzenegger, et al lawsuit (case number CPF-09-509721) was filed in San Francisco Superior Court by Sen. Steinberg, but covers an additional 14 line item vetoes that the St. John’s Well Child & Family Center v. Schwarzenegger lawsuit does not address. (The other respondent in the case besides the Governor is State Controller John Chiang)

The Steinberg lawsuit is currently pending in Superior Court. No trial court date has been set yet.

What St. John’s Well Child & Family Center Lawsuit Seeks To Do

The lawsuit filed by advocacy organizations asks the State Court of Appeals to overturn the Governor’s line item vetoes made to Sections 568 and 570-575 of ABx4 1 [the revised 2009-2010 State Budget bill - the “x4” stands for the 4th special or extraordinary session of the Legislature] as follows:

· Additional reduction for the California Department of Aging from $9,483,000 to $15,643,000

· Additional reduction to Medi-Cal local assistance by $60,569,000

· Elimination of funding for the Community Clinic Programs

· Additional reduction of state general funding for Office of AIDS by $52,133,000

· Additional reduction in funding for the Domestic Violence Program by $16,337,000

· Additional reduction in funding for the Adolescent Family Life Program by $9,000,000

· Additional reduction in funding for the Black Infant Health Program by $3,003,000

· Additional reduction in funding for the Healthy Families program by $50,000,000

· Additional reduction in funding for the Regional Center’s budget that purchases community-based services (purchase of services) for children up to age 5, by $50,000,000

· Additional reduction in funding for the Caregiver Resource Centers by $4,082,000

· Reduction in funding for In-Home Supportive Services (IHSS) public authorities by $37,555,000

Note: the separate state lawsuit filed by Sen. Steinberg covers these line item vetoes plus an additional 14 other line item vetoes not covered in this lawsuit.

Governor’s Legal Team Say Courts Will Reject Lawsuit

The Governor’s legal team previously stated that the courts would reject any challenge to the governor's vetoes because the revised state budget contained appropriations.

That claim was supported by court documents (“amicus curiae” or “friend of the court” briefs) submitted by 3 former governors supporting Schwarzenegger’s position (Republicans George Deukmejian and Pete Wilson and Democrat Gray Davis).

The California Chamber of Commerce, the California Taxpayer’s Association and the California Business Roundtable also filed court documents in support of the Governor’s position.

Governor’s Line Item Veto Power Not Normally Questioned

Normally a governor’s line item veto power would not be questioned, but this year the state budget for 2009-2010 was passed four months early – in mid February - by the Legislature (the state budget year begins July 1 and ends June 30).

Despite the massive spending cuts and temporary tax increases made in February, another budget gap opened up by May 2009, and by June grew to over $23 billion. The Legislature, after a month long impasse in both houses – finally passed a revised 2009-2010 State Budget in late July, which the Governor signed – along with making additional reductions using his line item vetoes.

Those filing the lawsuits say the Governor had a right to use his line item veto power in February when the original budget for 2009-2010 was passed – which he did do – but that he had no authority to use that same power in late July because the budget bill submitted to him (ABx4 1), were simply revisions to funding already approved and appropriated by the Legislature in February

Governor Said In Late July He Was Forced To Make Additional Cuts

The Governor said in late July that he was forced to make additional cuts to programs using his line item veto power because the Assembly did not follow through in approving the budget deal in late July agreed to by the “Big Five” (the Governor, the Democratic and Republican Senate legislative leaders and the Democratic and Republican Assembly leaders).

The Assembly in late July ended up approving the over all revised budget bill, but rejected two key budget related measures that included $1.1 billion in proposals included transfer of local gas tax funds and authorizing offshore oil drilling that was approved by the State Senate.

Line Item Veto Lawsuit Has No Impact On Other Cuts

No matter what the courts decide, the two lawsuits seeking to overturn the additional reductions caused by the Governor’s line item vetoes made to the revised 2009-2010 State Budget bill passed and enacted in late July, would have no impact on the massive spending reductions that were actually approved by the Legislature and Governor and included that revised state budget (or the earlier 2009-2010 State Budget passed in February).

The two nearly identical lawsuits (St. John’s Well Child and Family Center v. Schwarzenegger et al and Darrell Steinberg v. Schwarzenegger et al) only deal with the Governor’s reductions made in late July using his line item veto.

Other Reductions Stopped By Other Federal and State Lawsuits

Some of the other reductions actually included in the 2009-2010 State Budget passed in February by the Legislature and approved by the Governor – and the revised 2009-2010 State Budget passed in late July by the Legislature and approved by the Governor have been blocked – at least for now – by other different lawsuits.

Most of the reductions however – especially those impacting regional center funded community-based services and supports for children and adults with developmental disabilities, Early Start (California’s early intervention program), SSI/SSP (Supplemental Security Income/State Supplemental Payment program grants), 9 Medi-Cal optional benefits, several mental health programs and senior programs – have not been stopped by lawsuits and have been going forward.

Some of those reductions blocked – at least for now - by other lawsuits, include (CDCAN will issue later this week a full report on all the lawsuits and current status):

· IHSS Worker Wages (State Participation) – a federal lawsuit (Martinez et al v. Schwarzenegger et al) filed in federal district court in Oakland in June blocked a reduction in state funding for In-Home Supportive Services (IHSS) worker wages. The state is appealing the ruling and the case continues.

· IHSS Eligibility for services under using functional index scores and rankings - a separate federal lawsuit (V.L. et al v. Wagner et al), also filed in Oakland, successfully blocked in October, implementation of a budget reduction that would have reduced or eliminated eligibility for services under IHSS by using little known assessment tools (functional index scores and also the functional index rankings). Federal district court judge issued a preliminary injunction that stopped those cuts from being implemented at least until the case goes to trial. The state is appealing the ruling and the case continues.

· Adult Day Health Care Centers - a separate federal lawsuit filed in Oakland, stopped on September 10th - a budget reduction to adult day health care centers on September 10th, which would have reduced adult day health care center services from a maximum of 5 to no more than 3 days per week for most seniors and other adults with disabilities. The state is appealing the ruling – and the case continues.

· IHSS Worker Requirements – Felony Convictions: a State Superior Court Judge in the lawsuit Ellis et al v. Wagner et al, on November 24, 2009, stopped – at least for now – a budget related IHSS worker requirement that could have prevented persons with felony convictions from working as an IHSS provider. That restraining order remains in effect until at least a January 26, 2010 state court hearing.

· Elimination of the IHSS Share of Cost Buy-Out Program and Elimination of 9 Medi-Cal Optional Benefits - A state lawsuit (ADAPT et al v. Wagner et al) that tried to stop the State from eliminating the IHSS “Share of Cost” Buy-Out program, and a federal lawsuit (Gray Panthers of San Francisco, et al. v. Arnold Schwarzenegger, et al) that tried to stop the elimination of 9 Medi-Cal “optional benefits for adults (including adult dental) were not successful, with both cases essentially dismissed by the courts.

*Article posted on CALegalAdvocates.org with author's permission.