Colorado General Assembly v. Lamm
| Decision Date | 01 June 1987 |
| Docket Number | No. 85SA70,85SA70 |
| Citation | 738 P.2d 1156 |
| Parties | The COLORADO GENERAL ASSEMBLY, Plaintiff-Appellee, v. The Honorable Richard D. LAMM, Governor of the State of Colorado, Defendant- Appellant. |
| Court | Colorado Supreme Court |
Philip G. Dufford, Gregory A. Ruegsegger, Edward D. White, Welborn, Dufford & Brown, and Douglas G. Brown, Rebecca C. Lennahan, William A. Hobbs, Colorado Legislative Drafting Office, Denver, for plaintiff-appellee.
Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Denver, for defendant-appellant.
The Governor of Colorado appeals the Denver district court decision declaring that the Colorado General Assembly has the authority to direct state expenditure of federal block grant monies and that the governor's vetoes of headnotes that included the federal funds in the general appropriations bill (the "long bill") in 1982, 1983, and 1984 violated the doctrine of separation of powers. We determine that the expenditure of the funds is within the governor's executive power to make resource allocation decisions, with the exception of the portions of the block grants subject to state matching appropriations and the portions that may be transferred to other block grants. We affirm the ruling of the district court in part and reverse in part.
In a headnote to the 1982 long bill, the general assembly appropriated eight federal block grants for primary care provided by community health centers, social services under Title XX of the Social Security Act, preventive health care, alcohol and drug abuse and mental health services, community services, maternal and child health services, education consolidation and improvement, and community development in small cities. 1 Governor Richard D Lamm vetoed the headnote because he believed that legislative appropriation of federal block grants interfered with executive expenditure of federal funds and violated Colorado case law restricting appropriation of federal funds by the general assembly. 2 The general assembly failed in an attempt to override the governor's veto of the headnote relating to block grants.
In November 1982 the general assembly brought suit in Denver district court against Governor Lamm, challenging the governor's veto of the block grant headnote and the governor's veto of portions of the 1982 long bill that designated the sources from which executive officials would obtain cash funding for particular programs. On January 17, 1984, the district court granted summary judgment in favor of the general assembly on the sources of cash funding issue and certified its ruling as final action for purposes of appeal. This court affirmed the district court's judgment on the basis that vetoes restricted to the source of funding, while allowing the amount of funding to remain as established by the legislature, did not relate to entire items and thus were not within the governor's constitutional item veto power under art. IV., sec. 12 of the Colorado constitution. Colorado General Assembly v. Lamm, 704 P.2d 1371 (Colo.1985). The district court reserved ruling on the legislative appropriation of federal funds claim until after trial. 3
In August 1984 the court allowed the general assembly to amend its complaint to include the governor's veto of the 1983 and 1984 long bill headnotes that appropriated the federal block grants that were included in the 1982 headnote and two additional federal grants, the low-income energy assistance block grant and portions of the Job Training Partnership Act, 29 U.S.C. § 1501 et seq. (1982). In January 1985 after hearing testimony from national experts on federal block grants and from state administrators regarding the implementation of the grants in Colorado, the district court concluded that the discretion allowed the state under the federal block grant program included the type of policy decisions that are within the general assembly's power of appropriation. The district court identified the determination of the programs the state will operate and the level of funding to be assigned to each program as legislative policy decisions. The court described executive discretion as deciding how to administer the programs chosen by the legislature.
The district court acknowledged that the language in MacManus v. Love, 179 Colo. 218, 499 P.2d 609 (1972), and Anderson v. Lamm, 195 Colo. 437, 579 P.2d 620 (1978), "if literally construed, would inescapably lead to the conclusion that the source of the funds is determinative of whether the Legislature may appropriate the funds," and funds that have "the federal government as their source are custodial funds and not subject to appropriation control by the Legislature." The court stated that "[i]t is clear that the source of the funds is not dispositive in determining whether or not legislative appropriation is proper"; rather, the court concluded that "it is the custodial nature of the funds" that is determinative. (Emphasis in original.) The court based its reading of MacManus and Anderson on the legislative role in appropriating federal revenue-sharing funds, a type of federal funding developed after this court's decision in MacManus.
The district court entered judgment in favor of the general assembly, declaring that the block grants were subject to the plenary power of legislative appropriation and that the governor's annual vetoes of the block grant headnote were void. The governor appealed to this court. 4 He argues that under MacManus and federal law federal funds are custodial funds not subject to the appropriative power of the legislature and that the discretion state officials may exercise in spending federal block grants is not significantly different than the discretion exercised in spending federal categorical grants.
During the 1960s, federal grants to the states rose from approximately $7 billion provided through 160 categorical grant programs, to approximately $85 billion provided through at least 500 categorical programs. In the late 1960s, the Advisory Commission on Intergovernmental Relations (ACIR), a group of local, state and federal officials created by Congress in 1959 to monitor intergovernmental relations, suggested that federal assistance to the states be restructured to allow revenue sharing and block grants in addition to categorical grants.
Revenue sharing was a per capita, general support payment program designed to provide financial resources to state and local governments to spend for local priorities. The federal revenue sharing statute, 31 U.S.C. § 1243(a)(4) (1976), provided that revenue sharing funds were to be expended in the same manner as a state's own revenue. Federal revenue sharing was in effect between 1972 and 1980, and all state legislatures appropriated federal revenue sharing funds.
The categorical grant was described as a means for furthering national priorities by authorizing grants for programs that met carefully defined federal standards. Categorical grants involve a high degree of federal regulation and often have gone to local governments or independent single-purpose agencies such as urban renewal authorities or housing authorities. At the time this court decided MacManus v. Love, 179 Colo. 218, 499 P.2d 609 (1972), most federal funds allocated to Colorado were in the form of categorical grants.
Federal block grants were conceived as falling between the extensive federal control represented by categorical grants and the absence of federal control represented by revenue sharing. 5 ACIR viewed block grants as a means of ensuring that federal funds would be awarded in national priority areas such as health or education, but with a minimum of federal control and with the discretion given to states and local governments to select priorities and projects within the functional areas. ACIR foresaw block grants as: (1) authorizing federal aid for a wide range of activities within a broad functional area; (2) allowing recipients substantial discretion in identifying problems and designing programs to meet those problems; (3) reducing administrative requirements consistent with ensuring the accomplishment of national goals; (4) distributing funds on the basis of a statutory formula that narrowed federal discretion and maintained fiscal certainty for grantees; and (5) providing specific eligibility provisions that tended to favor general purpose governmental units. Advisory Commission on Intergovernmental Relations, Safe Streets Reconsidered: The Block Grant Experience 1968-1975 1 (1977).
Under the first major block grant program, Title I of the Omnibus Crime Control and Safe Streets Act of 1968, 42 U.S.C. §§ 3701-3713 (1982), the Law Enforcement Assistance Administration (LEAA) distributed funds to entities within the states on a per capita basis when the states submitted a plan to LEAA for the use of the funds that met statutory requirements. In 1973 and 1974, congress enacted three more block grants programs: the Comprehensive Employment and Training Act (CETA), 29 U.S.C. §§ 801-837 (Supp. IV 1973), the Housing and Community Development Act, 42 U.S.C. §§ 5301-5320 (Supp. IV 1974), and Title XX of the Social Security Act, 42 U.S.C. § 1397 (Supp. IV 1974). Congress directed most of the early block grants to local governments rather than to the states.
In 1980 the United States comptroller general reported to congress that state legislative involvement in federal grant programs was discouraged by the restrictive nature of the federal grant process and by specific provisions of grant programs that assigned legislative responsibilities to the state executive branch for determining priorities, designating organizations to administer federal programs, and evaluating program performance. Report to the Congress by the Comptroller General of the United States, United States General Accounting Office GGD-81-3, December...
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