An analysis of Governor McAuliffe’s attempted vetoes on Medicaid Expansion

In the Governor’s message today on the budget, he announced that he “ intends to veto language authorizing the Medicaid Innovation and Reform Commission to Approve Medicaid reforms as a requirement for Medicaid Expansion (MIRC). The General Assembly made the Commission irrelevant by removing their appropriations authority from the budget. The MIRC has also consistently allowed partisan political considerations prevent action [sic] despite the criteria for Medicaid expansion having been fulfilled.”

He also announced that he “intends to veto the amendment limiting any appropriation or expenditure of funds in the State Treasury to address the health care coverage gap without specific authorization or an appropriation bill enacted by the General Assembly on or after July 1, 2014. The amendment is unnecessary given its intent to restrict an appropriation that does not exist anywhere in the budget.”

The Governor is ostensibly relying on his line-item veto authority, which can be found in Article V, Section 6(d) of the Constitution of Virginia.  That provision reads “[t]he Governor shall have the power to veto any particular item or items of an appropriation bill, but the veto shall not affect the item or items to which he does not object. The item or items objected to shall not take effect except in the manner provided in this section for a bill vetoed by the Governor.”

What does that mean in layman’s terms?

Appropriations bills in Virginia are broken down by “items.”  Each item in the bill is a specific appropriation for a specific program, and each item generally includes legislative language regarding how the General Assembly wishes to see that line item used.  These provisions are essentially conditions and restrictions.  For example, the provision of the budget bill that deals with the MIRC is included in the appropriation for Medicaid in Item 301 of the budget.  Other items deal with other topics.  Item 136, for example, is the Direct Aid to Public Education line item, with a $6.1 billion appropriation.  Within Item 136 are definitions and a variety of other legislative language that fleshes out the General Assembly’s conditions and restrictions for that line item.  The item includes both the the money appropriation and the conditions and restrictions.

The “line-item veto” as written in the Constitution makes it clear what the governor can do. He can veto a line item – a monetary appropriation – that he disagrees with, which includes the conditions and restrictions.  He can’t veto one without the other.  

Here’s what the case law says.

In 1940, the Virginia Supreme Court dealt with a case involving a line item veto of the position of Legislative Director that was included in the overall appropriation for the Budget Division.  Governor James H. Price attempted to veto the position of Legislative Director of the Budget Division while leaving the rest of the appropriation intact.  He was challenged by the Attorney General.  In this case, the Supreme Court had, for the first time, to define the meaning of “item” in an appropriations bill.  The Court defined an “item” as “an indivisible sum of money dedicated to a stated purpose.  It is something different from a provision or condition, and where conditions are attached, they must be observed; where none are attached, none may be added.” Commonwealth v. Dodson, 176 Va. 281, 296 (1940).  The Court further clarified that “[w]e think it is plain that the veto power does not carry with it power to strike out conditions or restrictions. That would be legislation. Plainly money devoted to one purpose can not be used for another, and it is equally plain that power to impose conditions before it can become available is legislation.”  Id.

Three decades later, the Court revisited the issue and confirmed their holding in Dodson.  In 1976, Governor Mills Godwin vetoed a specific appropriation of $10 million for Metro in Northern Virginia.  This was challenged by the Arlington County Board, and two legislators, one from Fairfax and the other Arlington.  The Supreme Court upheld the veto, reiterating its holding in Dodson, stating “[i] n the constitutional sense, an item of an appropriation bill is an indivisible sum of money dedicated to a stated purpose; the term refers to something which may be eliminated from the bill without affecting the enactment’s other purposes or provisions.”  Brault v. Holleman, 217 VA 441, 447 (1976).

The Court in Brault went on to say that “[w]hile the Governor is empowered to veto any particular item or items of an appropriation bill, he must, for his veto to be valid, strike down the whole of an item; he cannot disapprove part of an item and approve the remainder. And this rule prevents the Governor from reducing the amount of an appropriation which by itself constitutes an item.  Where a condition is attached to an appropriation, the condition must be observed. The Governor cannot veto the appropriation without also disapproving the condition; correspondingly, he cannot veto the condition without also disapproving the appropriation.” Id.

Because the item vetoed in Brault was an actual sum of money – $10 million – it could be vetoed as an “item” because it met both tests of the Court set out.  It was 1) an indivisible sum of money and 2) dedicated to a stated purpose.  The Governor was vetoing the sum and whatever conditions or restrictions applied, and that sum was divisible from the rest of the appropriations for Metro in Northern Virginia.  It was a discrete provision that could be excised without damaging the other appropriations.

Here, things aren’t that simple for the Governor. There is no “indivisible sum of money” in the appropriations bill for the MIRC in Item 301.  The Governor can’t veto legislative language as an “item” in the budget – which is what he would be doing here by trying to veto the language in 301 that sets up the MIRC and gives it authority to propose reforms to Medicaid.  He could only do so by vetoing the appropriation attached – and that would require a veto of the entire line for the Department of Medical Assistance Services.

So what does that mean? Unless the Governor intends to veto Virginia’s entire Medicaid system, he can’t veto the MIRC provisions alone.

The same is true of the Stanley Amendment, which is a specific provision that bars any use of funds, either general or non-general, to expand Medicaid without an actual appropriation by the General Assembly.  While the Governor would have a better argument in vetoing this provision, since it is a standalone and could arguably be considered an “indivisible sum of money dedicated to a stated purpose” (the indivisible sum being zero), if he does that, the appropriations bill does not otherwise provide any appropriation to cover a Medicaid expansion.  Thus, he’s back to square one – a bill with no Medicaid expansion appropriation in it.

That’s why Senator Stanley’s two step amendment process was better than Senator Black’s – Senator Black’s did not excise the appropriation language in the bill, it simply papered over it.  By cutting out the appropriation and then adding the new language, the provision became veto proof.  Even if one assumes, for the sake of argument, that the original budget included language that would have allowed the Governor to expand Medicaid unilaterally (and I still don’t agree that it did), he certainly can’t do that now with the provision removed from the bill as passed.  Both the Dodson and Brault cases make clear that a veto is just that – a veto.  You can’t add language back in that’s been cut out of a bill before it’s presented to the Governor.

To make a long story short – you can’t veto an appropriation without vetoing the conditions attached to the appropriation.  And, vice versa, you can’t veto the conditions attached to an appropriation without vetoing the appropriation.  Both of the conditions – the Stanley Amendment and the MIRC provisions – were part of the overall appropriation for the Department of Medical Assistance Services.  Unless the Governor wants to veto the entire Virginia Medicaid system, he can’t do what he says he’s going to do here. 

As Bernard McNamee, former Deputy Counsel to Governor George Allen, wrote in a law review article on Virginia’s line item veto, “. . . [t]he line-item veto “is blunt and is incapable of eliminating artfully crafted budget language or items.” Bernard L. McNamee, Executive Veto: The Power of the Pen in Virginia, 9 Regent U.L. Rev. 9, 22 (1997).

 The General Assembly artfully crafted this budget language to make it impossible for the Governor to veto either the MIRC or the purpose of the Stanley Amendment, which was to bar the Governor from unilaterally expanding Medicaid.  I think we can expect to see Clerk of the House Paul Nardo refuse to enroll both of these vetoes, as his predecessor Bruce Jamerson did when Tim Kaine attempted similar vetoes back in 2006.

The Governor really only has one choice here – the only way he is going to expand Medicaid is to win back the State Senate in 2015 and force compromise.

 His veto attempts here won’t land him his Medicaid expansion – they’ll only land him in court. 

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