Opinion ID: 1551127
Heading Depth: 1
Heading Rank: 5

Heading: Judicial Action Possibly Implicating State Budget Appropriations Limitations

Text: Appellants claim that the Circuit Court lacked the authority to issue a preliminary injunction requiring expenditure of State funds to pay for medical benefits that were not appropriated in the FY 2006 Budget. Appellants' argument is based on the contention that Maryland law does not permit constitutional and statutory requirements governing public expenditures to be overborne by a violation of Article 24 of the Declaration of Rights. Appellants characterize the Circuit Court's order as an illegal order for the expenditure of unappropriated funds, in contravention of Article III, § 32 of the Maryland Constitution (which provides that State funds must be appropriated through the comprehensive executive budget procedure pursuant to Article III, § 52); see also Md. Act. for Foster Child. v. State, 279 Md. 133, 148, 367 A.2d 491, 499 (1977); Judy v. Schaefer, 331 Md. 239, 250, 627 A.2d 1039, 1044-45 (1993); Dorsey v. Petrott, 178 Md. 230, 242, 13 A.2d 630, 636 (1940); Philip Morris v. Glendening, 349 Md. 660, 681, 709 A.2d 1230, 1240 (1998). Maryland Code (1985, Repl. Vol. 2006), State Finance and Procurement Article, §§ 7-205, 7-234(a) and (c) likewise prohibits the expenditure of State funds not appropriated properly by law and provides for the removal of any State officer or employee who violates that prohibition. Appellants contend that the Circuit Court's departure from the requirements of the Constitution in granting the preliminary injunction is not justified by a likely equal protection violation under Article 24 because the Maryland Declaration of Rights would not trump the express demands of the Constitution. Rather, Appellants posit that if there exists a conflict between Article 24 and the specific provisions of the Maryland Constitution governing budget and appropriations requirements, then the specific provisions prevail, relying on Commission on Medical Discipline v. Stillman, 291 Md. 390, 410-11, 435 A.2d 747, 757-58 (1981), and Broadwater v. State, 306 Md. 597, 602 n. 2, 510 A.2d 583, 585 n. 2 (1986). By expressly providing that the prohibition against unappropriated expenditures applies to any order, Article III, § 32 forecloses the possibility that the constitutional provisions establishing budget and appropriations requirements may be suspended or evaded by the expedient of a court order. Characterizing the Circuit Court's preliminary injunction order as an appropriation of funds from the State Treasury, Appellants maintain that the constitutional prerequisites for a lawful expenditure of State funds are not satisfied here and that there has been no appropriation for the benefits that the preliminary injunction orders be paid. Thus, Appellants argue, the payment of funds may not be ordered or made from the State Treasury to satisfy the preliminary injunction. Appellees counter that the Circuit Court possessed the authority to fashion the preliminary injunction as it did. First, Appellees assert that the Governor's budgetary authority, although far-reaching, is subject to fundamental constitutional limitations, including Article 24. This Court can give both Article 24 of the Declaration of Rights and Article III, §§ 52 and 32 of the Maryland Constitution full effect, as part of an integrated document, by requiring the Executive not to violate the Declaration of Rights in the course of exercising his budgetary authority, a reading that Appellees posit is required by both the history of the Budget Amendment and its subsequent interpretations by this Court. Appellees also contend that Article III, § 32 pertains to legislative orders, not judicial orders, relying on Dorsey, supra, 178 Md. at 237, 13 A.2d at 634, and PHILIP B. PERLMAN DEBATES OF THE MARYLAND CONSTITUTIONAL CONVENTION OF 1867. The Circuit Court did not order the direct expenditure of specific funds; rather the injunctive order was designed to remedy a constitutional violation and protect [Appellees] from irreparable harm, while leaving the mechanism for rectifying the constitutional violation entirely up to Appellants. Appellees argue that because the Budget Bill provides for a lump sum appropriation, of which some small portion is restricted for specific purposes (for example, the FY 2005 budget provided for a total of approximately $4 billion for medical care provider costs, of which some portion is used for medical assistance), the general language of the appropriation leaves significant leeway to the DHMH to move funds within broad categorical appropriations in order to satisfy the court's order. Appellees also highlight that, in recent years, when the State's medical assistance expenditures exceeded budget projections, Appellants did not deny coverage to eligible recipients, but instead, routinely included in the annual Budget Bill amounts to cover the prior year's deficiency.