Online Extra: South Carolina: Legislature vs Governor: October/November 2009

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By Trevor Burrus

The most publicized recent appropriations dispute between a legislature and a governor arose in the spring when South Carolina Governor Mark Sanford said he would not apply for the State Fiscal Stabilization funds included in American Recovery and Reinvestment Act.

Sanford asked the legislature to focus on cutting the budget rather than buttressing it with federal subsidies because accepting the stimulus money would make the state a party to creating an “unconscionable level of debt.” By taking that position, he laid the foundation for a significant court decision.
ARRA required governors to certify a request for the fiscal stabilization funds within 45 days of the bill’s enactment. Despite Sanford’s initial refusal, on April 3—the final day for certification—he sent a letter to the Office of Management and Budget requesting the funds. The South Carolina Legislature then appropriated the funds.

The governor's certification, however, did not ensure that the funds would be released to the state. As passed, the budget required the governor to take all necessary actions to secure the stabilization funds appropriated in the budget. In response to growing concerns that Sanford would not do so, the General Assembly adopted a concurrent resolution to accept the funds in the event that the governor refused. As expected, Sanford vetoed the relevant provisions of the budget, and the General Assembly overrode the vetoes.

Despite the overridden vetoes, Sanford still refused to apply for the money. He argued that the relevant language of ARRA, as federal legislation, preempted state law and granted state governors absolute discretion to accept or refuse the funds. A lawsuit was filed and the case went to the South Carolina Supreme Court on June 3.

The court had the task of interpreting both state and federal law and determining the interaction between the two. The court decided the governor was obligated to take actions pursuant to laws enacted by the legislature—the overridden vetoes. To hold otherwise, the court emphasized, would not only violate specific provisions of the South Carolina Constitution, but it would also strike a blow to the philosophy of separation of powers.

The question remained whether the state law is at odds with the relevant provisions of recovery act. If the court had accepted Sanford’s contention that the recovery act gives absolute discretion to governors, the two laws would be at an impasse. Under the Supremacy Clause of the U.S. Constitution, this impasse would end with the recovery act prevailing and would cause a drastic restructuring of governmental power in South Carolina.

The court was mindful of this difficulty. In interpreting section 1607 of ARRA, it tried to avoid such conflicts of laws. Where “a statute is susceptible of two constructions, one of which presents grave and doubtful constitutional question, and the other of which avoids those questions, the court’s duty is to adopt the latter,” the court said in its ruling.

It also cited a U.S. Supreme Court ruling that “federal legislation threatening to entrench on states’ arrangements for conducting their own governments should be treated with great skepticism, and read in a way that preserves a states’ chosen disposition of its own power.”

The federal law calls for the governor of the state to submit an application for the funds. In order to avoid a conflict between South Carolina’s constitution and ARRA, the court decided the phrases “desiring to receive” and “seeking a grant” in the sections modify the word state, which meant the request could be made by the General Assembly on behalf of the state.

The Supreme Court of South Carolina’s holding contained idiosyncratic elements unique to South Carolina and the interaction of ARRA, the state constitution and federalism. Not all appropriations disputes feature such a clear collision of state and federal laws. When they do, however, the court’s reasoning could apply to a variety of situations.

When state law butts heads with federal law, courts will often take a path of least resistance toward deciding the issue. In the Sanford case, the path of least resistance was to avoid construing a federal statute as fundamentally altering allocations of power and responsibility within a state. Construing the statute that way could ultimately cause more problems—problems that cut to the heart of federalism—than it would solve. In similar situations future courts may utilize a similar tactic.

Trevor Burrus is an intern in the fiscal program at NCSL.