County of Oneida v. Berle, 49 N.Y.2d 515 (1980)
The executive branch does not possess the constitutional authority to impound funds that have been duly appropriated by the legislature; such action violates the separation of powers.
Summary
This case addresses whether the New York State Director of the Budget, acting on behalf of the Governor, can refuse to spend funds appropriated by the Legislature. The Court of Appeals held that the Governor does not have the constitutional power to impound funds appropriated by law. The specific dispute arose when the Budget Director impounded $7 million of a $26 million appropriation intended to aid municipalities in operating sewage treatment works. The Court found that this impoundment violated the separation of powers doctrine enshrined in the New York Constitution.
Facts
The Governor initially recommended a $12 million appropriation for the sewage works reimbursement program in the executive budget for fiscal year 1976-1977. The Legislature increased this amount by $14 million, resulting in a total appropriation of $26 million. The Governor approved the bill, including the legislative addition, without exercising his item veto power. Subsequently, the Director of the Budget decided to reduce the allocations for sewage treatment systems, impounding $7 million of the appropriated funds, citing the need to tighten State spending.
Procedural History
Several municipalities and their representatives initiated a legal proceeding challenging the Budget Director’s decision. Special Term ruled that the executive impoundment was an invasion of the legislative domain. The Appellate Division affirmed Special Term’s decision based on the reasoning provided by Special Term. The Budget Director then appealed to the New York Court of Appeals.
Issue(s)
Whether the Governor, under the New York State Constitution, has the authority to refuse to expend funds appropriated by the Legislature.
Holding
No, because the executive branch’s impoundment of funds appropriated by the legislature violates the separation of powers doctrine.
Court’s Reasoning
The Court of Appeals rejected the argument that the Governor has implied constitutional power to reduce appropriations to maintain a balanced budget throughout the fiscal year. The court noted that while the Governor has an obligation to propose a balanced budget, there is no requirement that revenues and expenditures must match at all times during the fiscal year. The court emphasized that the State Constitution establishes a system of co-ordinate and co-equal branches of government, and that the executive branch cannot override enactments that have emerged from the lawmaking process. Quoting People ex rel. Burby v Howland, 155 NY 270, 282, the Court stated, “It is not merely for convenience in the transaction of business that they are kept separate by the Constitution, but for the preservation of liberty itself, which is ended by the union of the three functions in one man, or in one body of men. It is a fundamental principle of the organic law that each department should be free from interference, in the discharge of its peculiar duties, by either of the others.” The court found that the Governor’s action effectively altered a duly enacted statute. The appropriation language, stating that “the moneys hereby appropriated shall be available…and shall be apportioned,” was deemed mandatory, not discretionary. The phrase “as approved by the director of the budget” required only that the regulations apportioning the funds be subject to prior approval, not that the director had ultimate discretion to withhold funds. The court stated, “Once the appropriation was approved, therefore, the Governor and his subordinates were duty bound ‘to take care that [it was] faithfully executed’ (NY Const, art IV, § 3).” The court concluded that the executive branch must implement policy declarations of the Legislature, unless vetoed or judicially invalidated.