Court Opinion

ID: 5452194
Source: CourtListenerOpinion
Date Created: 2022-01-08 19:13:11.852966+00
Date Added: 2024-06-11T08:32:27.593206
License: Public Domain

KENNARD, J.
I dissent.
As part of an initiative measure placing spending limits on state and local government, the voters in 1979 added article XIII B to the California Constitution. Section 6 of this article provides that when the state “mandates a new program or higher level of service on any local government,” the state must reimburse the local government for the cost of such program or service. Under subdivision (c) of this constitutional provision, however, the state “may, but need not,” provide such reimbursement if the state mandate was enacted before January 1, 1975. (Cal. Const., art. XIII B, § 6, subd. (c).) Subdivision (c) is the critical provision here.
Because the counties have for many decades been under a state mandate to provide for the poor, a mandate that existed before the voters added article XIII B to the state Constitution, the express language of subdivision (c) of section 6 of article XIII B exempts the state from any legal obligation to reimburse the counties for the cost of medical care to the needy. The fact that for a certain period after 1975 the state directly paid under the state Medi-Cal program for these costs did not lead to the creation of a new mandate once the state stopped doing so. To hold to the contrary, as the majority does, is to render subdivision (c) a nullity.
The issue here is not whether the poor are entitled to medical care. They are. The issue is whether the state or the counties must pay for this care. The majority places this obligation on the state. The counties’ win, however, may be a pyrrhic victory. For, in anticipation of today’s decision, the Legislature has enacted legislation that will drastically reduce the counties’ share of other state revenue, as discussed in part III below.
I
Beginning in 1855, California imposed a legal obligation on the counties to take care of their poor. (Mooney v. Pickett (1971) 4 Cal.3d 669, 677-678 *112[94 Cal.Rptr. 279, 483 P.2d 1231].) Since 1965, this obligation has been codified in Welfare and Institutions Code section 17000. (Stats. 1965, ch. 1784, § 5, p. 4090.) That statute states in full: “Every county and every city and county shall relieve and support all incompetent, poor, indigent persons, and those incapacitated by age, disease, or accident, lawfully resident therein, when such persons are not supported and relieved by their relatives or friends, by their own means, or by state hospitals or other state or private institutions.” (Welf. & Inst. Code, § 17000.) Included in this is a duty to provide medical care to indigents. (Board of Supervisors v. Superior Court (1989) 207 Cal.App.3d 552, 557 [254 Cal.Rptr. 905].)
A brief overview of the efforts by federal, state, and local governments to furnish medical services to the poor may be helpful.
Before March 1, 1966, the date on which California began its Medi-Cal program, medical services for the poor “were provided in different ways and were funded by the state, county, and federal governments in varying amounts.” (Assem. Com. on Public Health, Preliminary Rep. on Medi-Cal (Feb. 29, 1968) p. 3.) The Medi-Cal program, which California adopted to implement the federal Medicaid program (42 U.S.C. § 1396 et seq.; see Morris v. Williams (1967) 67 Cal.2d 733, 738 [63 Cal.Rptr. 689, 433 P.2d 697]), at first limited eligibility to those persons “linked” to a federal categorical aid program by being over age 65, blind, disabled, or a member of a family with dependent children. (Legis. Analyst, Rep. to Joint Legis. Budget Com., Analysis of 1971-1972 Budget Bill, Sen. Bill No. 207 (1971 Reg. Sess.), pp. 548, 550.) Persons not linked to federal programs were ineligible for Medi-Cal; they could obtain medical care from the counties. (County of Santa Clara v. Hall (1972) 23 Cal.App.3d 1059, 1061 [100 Cal.Rptr. 629].)
In 1971, the Legislature revised Medi-Cal by extending coverage to certain so-called “noncategorically linked” persons, or “medically indigent persons.” (Stats. 1971, ch. 577, §§ 12, 13, 22.5, 23, pp. 1110-1111, 1115.) The revisions included a formula for determining each county’s share of Medi-Cal costs for the 1972-1973 fiscal year, with increases in later years based on the assessed value of property. (Id. at §§ 41, 42, pp. 1131-1133.)
In 1978, California voters added to the state Constitution article XIII A (Proposition 13), which severely limited property taxes. In that same year, to help the counties deal with the drastic drop in local tax revenue, the Legislature assumed the counties’ share of Medi-Cal costs. (Stats. 1978, ch. 292, § 33, p. 610.) In 1979, the Legislature relieved the counties of their obligation to share in Medi-Cal costs. (Stats. 1979, ch. 282, § 106, p. 1059.) *113Also in 1979, the voters added to the state Constitution article XIII B, which placed spending limits on state and local governments and added the mandate/reimbursement provisions at issue here.
In 1982, the Legislature removed from Medi-Cal eligibility the category of “medically indigent persons” that had been added in 1971. The Legislature also transferred funds for indigent health care services from the state to the counties through the Medically Indigent Services Account. (Stats. 1982, ch. 328, §§ 6, 8.3, 8.5, pp. 1574-1576; Stats. 1982, ch. 1594, §§ 19, 86, pp. 6315, 6357.) Medically Indigent Services Account funds were then combined with county health service funds to provide health care to persons not eligible for Medi-Cal (Stats. 1982, ch. 1594, § 86, p. 6357), and counties were to provide health services to persons in this category “to the extent that state funds are provided” (id., § 70, p. 6346).
From 1983 through June 1989, the state fully funded San Diego County’s program for furnishing medical care to the poor. Thereafter, in fiscal years 1989-1990 and 1990-1991, the state partially funded San Diego County’s program. In early 1991, however, the state refused to provide San Diego County full funding for the 1990-1991 fiscal year, prompting a threat by the county to terminate its indigent medical care program. This in turn led the Legal Aid Society of San Diego to file an action against the County of San Diego, asserting that Welfare and Institutions Code section 17000 imposed a legal obligation on the county to provide medical care to the poor. The county cross-complained against the state. The county argued that the state’s 1982 removal of the category of “medically indigent persons” from MediCal eligibility mandated a “new program or higher level of service” within the meaning of section 6 of article XIII B of the California Constitution, because it transferred the cost of caring for these persons to the county. Accordingly, the county contended, section 6 required the state to reimburse the county for its cost of providing such care, and prohibited the state from terminating reimbursement as it did in 1991. The county eventually reached a settlement with the Legal Aid Society of San Diego, leading to a dismissal of the latter’s complaint.
While the County of San Diego’s case against the state was pending, litigation was proceeding in a similar action against the state by the County of Los Angeles and the County of San Bernardino. In that action, the Superior Court for the County of Los Angeles entered a judgment in favor of Los Angeles and San Bernardino Counties. The state sought review in the Second District Court of Appeal in Los Angeles. In December 1992, the parties to the Los Angeles case entered into a settlement agreement providing for dismissal of the appeal and vacating of the superior court judgment. *114The Court of Appeal thereafter ordered that the superior court judgment be vacated and that the appeal be dismissed.
The County of San Diego’s action against the state, however, was not settled. It proceeded on the county’s claim against the state for reimbursement of the county’s expenditures for medical care to the indigent.1 The majority holds that the county is entitled to such reimbursement. I disagree.
II
Article XIII B, section 6 of the California Constitution provides: “Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the state shall provide a subvention of funds to reimburse such local government for the costs of such program or increased level of service, except that the Legislature may, but need not, provide such subvention of funds for the following mandates: [¶] . . . [¶] (c) Legislative mandates enacted prior to January 1,1975, or executive orders or regulations initially implementing legislation enacted prior to January 1, 1975" (Italics added.)2
Of importance here is Welfare and Institutions Code section 17000 (hereafter sometimes section 17000). It imposes a legal obligation on the counties to provide, among other things, medical services to the poor. (Board of Supervisors v. Superior Court, supra, 207 Cal.App.3d at p. 557; County of San Diego v. Viloria (1969) 276 Cal.App.2d 350, 352 [80 Cal.Rptr. 869].) Section 17000 was enacted long before, and has existed continuously since, January 1, 1975, the date set forth in subdivision (c) of section 6 of article XIII B of the California Constitution. Thus, section 17000 falls within subdivision (c)’s language of “[legislative mandates enacted prior to January 1, 1975,” rendering it exempt from the reimbursement provision of section 6.
Contrary to the majority’s conclusion, the Legislature’s 1982 legislation removing the category of “medically indigent persons” from Medi-Cal did not meet California Constitution, article XIII B, section 6’s requirement of imposing on local government “a new program or higher level of service,” and therefore did not entitle the counties to reimbursement from the state under section 6 of article XIII B. The counties’ legal obligation to provide medical care arises from section 17000, not from the subsequently enacted *1151982 legislation. The majority itself concedes that the 1982 legislation merely “trigger[ed] the counties’ responsibility to provide medical care as providers of last resort under section 17000.” (Maj. opn., ante, at p. 98.) Although certain actions by the state and the federal government during the 1970’s and 1980’s may have alleviated the counties’ financial burden of providing medical care for the indigent, those actions did not supplant or remove the counties’ existing legal obligation under section 17000 to furnish such care. (Cooke v. Superior Court (1989) 213 Cal.App.3d 401, 411 [261 Cal.Rptr. 706]; Madera Community Hospital v. County of Madera (1984) 155 Cal.App.3d 136, 151 [201 Cal.Rptr. 768].)
The state’s reimbursement obligation under section 6 of article XIII B of the California Constitution arises only if, after January 1, 1975, the date mentioned in subdivision (c) of section 6, the state imposes on the counties “a new program or higher level of service.” That did not occur here. As I pointed out above, the counties’ legal obligation to provide for the poor arises from section 17000, enacted long before the January 1, 1975, cutoff date set forth in subdivision (c) of section 6. That statutory obligation remained in effect when, during a certain period after 1975, the state assumed the financial burden of providing medical care to the poor, in an effort to help the counties deal with a drastic drop in local revenue as a result of the voters’ passage of Proposition 13, which severely limited property taxes. Because the counties’ statutory obligation to provide health care to the poor was created before 1975 and has existed unchanged since that time, the state’s 1982 termination of Medi-Cal eligibility for “medically indigent persons” did not create a “new program or higher level of service” within the meaning of section 6 of article XIII B, and therefore did not obligate the state to reimburse the counties for their expenditures in health care for the poor.
III
In imposing on the state a legal obligation to reimburse the counties for their cost of furnishing medical services to the poor, the majority’s holding appears to bail out financially strapped counties. Not so.
Today’s decision will immediately result in a reduction of state funds available to the counties. Here is why. In 1991, the Legislature added section 11001.5 to the Revenue and Taxation Code, providing that 24.33 percent of the moneys collected by the Department of Motor Vehicles as motor vehicle license fees must be deposited in the State Treasury to the credit of the Local Revenue Fund. In anticipation of today’s decision, the Legislature stated in subdivision (d) of this statute: “This section shall cease to be operative on *116the first day of the month following the month in which the Department of Motor Vehicles is notified by the Department of Finance of a final judicial determination by the California Supreme Court or any California court of appeal [that]: [U . . . [H (2) The state is obligated to reimburse counties for costs of providing medical services to medically indigent adults pursuant to Chapters 328 and 1594 of the Statutes of 1982.” (Rev. & Tax. Code, § 11001.5, subd. (d); see also id., § 10753.8, subd. (b).)
The loss of such revenue, which the Attorney General estimates at “hundreds of millions of dollars,” may put the counties in a serious financial bind. Indeed, realization of the scope of this revenue loss appears to explain why the County of Los Angeles, after a superior court victory in its action seeking state reimbursement for the cost of furnishing medical care to “medically indigent persons,” entered into a settlement with the state under which the superior court judgment was effectively obliterated by a stipulated reversal. (See Neary v. Regents of University of California (1992) 3 Cal.4th 273 [10 Cal.Rptr.2d 859, 834 P.2d 119].) In a letter addressed to the Second District Court of Appeal, sent while the County of Los Angeles was engaged in settlement negotiations with the state, the county’s attorney referred to the legislation mentioned above in these terms: “This legislation was quite clearly written with this case in mind. Consequently, to pursue this matter, the County of Los Angeles risks losing a funding source it must have to maintain its health services programs at current levels. The additional funding that might flow to the County from a final judgment in its favor in this matter, is several years away and is most likely of a lesser amount than this County’s share of the vehicle license fees.” (Italics added.) Thus, the County of Los Angeles had apparently determined that a legal victory entitling it to reimbursement from the state for the cost of providing medical care to the category of “medically indigent persons” would not in fact serve its economic interests.
I have an additional concern. According to the majority, whenever there is a change in a state program that has the effect of increasing a county’s financial burden under section 17000 there must be reimbursement by the state. This means that so long as section 17000 continues to exist, an increase in state funding to a particular county for the care of the poor, once undertaken, may be irreversible, thus locking the state into perpetual financial assistance to that county for health care to the needy. This would, understandably, be a major disincentive for the Legislature to ever increase the state’s funding of a county’s medical care for the poor.
The rigidity imposed by today’s holding will have unfortunate consequences should the state’s limited financial resources prove insufficient to *117reimburse the counties under section 6 of article XIII B of the California Constitution for the “new program or higher level of service” of providing medical care to the poor under section 17000. In that event, the state may be required to modify this “new program or higher level of service” in order to reconcile the state’s reimbursement obligation with its finite resources and its other financial commitments. Such modifications are likely to take the form of limitations on eligibility for medical care or on the amount or kinds of medical care that the counties must provide to the poor under section 17000. A more flexible system—one that actively encouraged shared state and county responsibility for indigent medical care, using a variety of innovative funding mechanisms—would be less likely to result in a curtailment of medical services to the poor.
And if the Legislature is unable or unwilling to appropriate funds to comply with the majority’s reimbursement order, the law allows the county to file “in the Superior Court of the County of Sacramento an action in declaratory relief to declare the mandate unenforceable and enjoin its enforcement.” (Gov. Code, § 17612, subd. (c); see maj. opn., ante, at p. 82.) Such a declaration would do nothing to alleviate the plight of the poor.
Conclusion
The dispute in this case ultimately arises from a collision between the taxing limitations on the counties imposed by article XIII A of the state Constitution and the preexisting, open-ended mandate imposed on them under Welfare and Institutions Code section 17000 to provide medical care for the poor. As I have explained, the Legislature’s assumption thereafter of some of the resulting financial burden to the counties did not repeal section 17000’s mandate, nor did the Legislature’s later termination of its financial support create a new mandate. In holding to the contrary, the majority imposes on the Legislature an obligation that the Legislature does not have under the law.
I recognize that my resolution of this issue—that under existing law the state has no legal obligation to reimburse the counties for health expenditures for the poor—would leave the counties in the same difficult position in which they find themselves now: providing funding for indigent medical care while maintaining other essential public services in a time of fiscal austerity. But complex policy questions such as the structuring and funding of indigent medical care are best left to the counties, the Legislature, and ultimately the electorate, rather than to the courts. It is the counties that must figure out how to allocate the limited budgets imposed on them by the electorate’s adoption of articles XIII A and XIII B of the California Constitution among indigent medical care programs and a host of other pressing *118and essential needs. It is the Legislature that must decide whether to furnish financial assistance to the counties so they can meet their section 17000 obligations to provide for the poor, and whether to continue to impose the obligations of section 17000 on the counties. It is the electorate that must decide whether, given the ever-increasing costs of meeting the needs of indigents under section 17000, counties should be afforded some relief from the taxing and spending limits of articles XIIIA and XIII B, both enacted by voters’ initiative. These are hard choices, but for the reasons just given they are better made by the representative branches of government and the electorate than by the courts.

 I agree with the majority that the superior court had jurisdiction to decide this case. (Maj. opn., ante, at pp. 85-90.)

 Section 6 of article XIII B pertains to two types of mandates: new programs and higher levels of service. The words “such subvention” in the first paragraph of this constitutional provision makes the subdivision (c) exemption applicable to both types of mandates.