State ex rel. Liberty School District, et al., Relators, v. Bob Holden, et al., Respondents.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion

Case Style: State ex rel. Liberty School District, et al., Relators, v. Bob Holden, et al., Respondents. Case Number: SC85684 Handdown Date: 12/09/2003 Appeal From: Original Proceeding in Mandamus Counsel for Appellant: Michael F. Delaney, Michael C. Leitch and Joshua C. Dickinson Counsel for Respondent: Paul C. Wilson Opinion Summary: In June 2003, the governor approved an appropriation for public elementary and secondary education. He subsequently withheld approximately $115 million from that appropriation. Fourteen school districts seek a writ of mandamus from this Court seeking to compel distribution of the full appropriation. PETITION DENIED. Court en banc holds: Article IV, section 27 specifically gives the governor broad authority to control the rate at which appropriations are expended and to balance the state's budget by reducing state expenditures below their appropriations when actual revenues fall below the revenue estimates on which the appropriations were based. Neither article IV, section 26 nor article IX, section 3(a) exempt school funds from the unambiguous provision of power to the governor in times of budget shortfalls. To the extent section 163.081, RSMo, can be read to require expenditure of the full public school appropriation, the constitutional provisions in article IV, section 27 supercede the statutory provision. Citation: Opinion Author: PER CURIAM Opinion Vote: PETITION DENIED. Wolff, Benton, Stith, Price, Teitelman, and Limbaugh, JJ., concur. White, C.J., not participating. Opinion:

On June 30, 2003, the governor approved an appropriation for public elementary and secondary education. He subsequently ordered that part of the appropriation not be distributed. (FN1) Fourteen school districts file a petition for writ of mandamus in this Court seeking to compel the distribution of the appropriated amounts. (FN2) As the governor's action is authorized by the Missouri Constitution, the petition is denied. Article IV, section 27 of the state constitution specifically authorizes the governor to "control the rate at which any appropriation is expended during the period of appropriation by allotment or other means . . . ." (FN3) The governor is also permitted by that section to "reduce the expenditures of the state or any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based." The parties do not dispute that actual revenues are less than the estimates. The school districts, however, contend that article IV, section 26 (FN4) and article IX, section 3(a) (FN5) of the state constitution exempt school funds from the unambiguous provisions of article IV, section 27. Those sections do not. Article IV, section 26 is limited to the governor's power with respect to appropriation -- not expenditures. Article IX, section 3(a) requires the public school fund to be paid annually and distributed according to law. Article IV, section 27 is part of the applicable law. (FN6) Article IV, section 27 broadly authorizes the governor to control the rate at which any appropriation is expended and to balance the state's budget by reducing expenditures in the event that state revenues fall below the revenue expectations. It is clear from its provisions that, beyond the state's narrowly restricted capacity to borrow money, the constitution does not permit the state to spend money it does not have. Missouri Health Care Ass'n v. Holden , 89 S.W.3d 504, 506-07 (Mo. banc 2002). The petition is denied. Footnotes: FN1. The parties agree that the dispute involves approximately $115 million. FN2. A petition was filed and denied in the circuit court. A hearing was held, but no preliminary order was issued. At the parties' request the Court has expedited consideration of this case, including waiving the requirements that an alternative writ be issued and that briefs be filed. FN3. Section 27 reads as follows: The governor may control the rate at which any appropriation is expended during the period of the appropriation by allotment or other means, and may reduce the expenditures of the state or any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based. FN4. Section 26 reads as follows:

The governor may object to one or more items or portions of items of appropriation of money in any bill presented to him, while approving other portions of the bill. On signing it he shall append to the bill a statement of the items or portions of items to which he objects and such items or portions shall not take effect. If the general assembly be in session he shall transmit to the house in which the bill originated a copy of the statement, and the items or portions objected to shall be reconsidered separately. If it be not in session he shall transmit the bill within forty-five days to the office of the secretary of state with his approval or reasons for disapproval. The governor shall not reduce any appropriation for free public schools, or for the payment of principal and interest on the public debt. FN5. Section 3(a) reads as follows: All appropriations by the state for the support of free public schools and the income from the public school fund shall be paid at least annually and distributed according to law. FN6. To the extent the school districts rely on section 163.081, RSMo 2000, the constitutional authority of the governor, under article IV, section 27, to reduce expenditures supercedes any state statute or state regulation that would purport to require the expenditure. Missouri Health Care Ass'n v. Holden , 89 S.W.3d 504, 512 (Mo. banc 2002). Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.