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A state appellate court ruled Tuesday that Gov. Arnold Schwarzenegger's line-item vetoes last year reducing funding for several programs were constitutional, rejecting a challenge from various social service advocates, unions and Democratic legislative leaders.

In a 3-0 decision, Justice J. Anthony Kline wrote that the challenge failed to show that Schwarzenegger had overstepped his executive authority in further reducing expenditures during last July's budget revision. The case, St. John's Well Child and Family Center v. Schwarzenegger, called into question seven line-item vetoes worth $288 million, cutting programs ranging from the Office of AIDS to Healthy Families.

Last year's situation was unique because lawmakers and Schwarzenegger approved the budget act in February, four months early. Because of a further drop in revenues and voter rejection of budget solutions, state leaders had to solve for a new $24 billion deficit last summer.

The language of the July budget revision contained reductions of the budget act, whereas normally the summer budget agreement spells out how much money the state will spend on each program. Governors have the ability to use their line-item veto on "appropriations." Democrats and social service groups claimed that the July reductions did not qualify as appropriations.

Kline wrote, at times scathingly, that the July revision did in fact count as an appropriations package. He said that if the petitioners were correct, "a simple legislative majority could not only overturn a two-thirds vote on the annual budget act, but insulate its new determinations from gubernatorial oversight. This cannot be." He suggested that Assembly Bill X4 1 was by its nature written as an appropriations bill because it affected multiple subject areas, and the state constitution only allows budget bills to contain multiple subjects.

Jim Mangia, CEO of St. John's Well Child and Family Center, said he and others who brought the case forward are considering whether to appeal to the California Supreme Court. He said his Los-Angeles-based clinic has 128,000 patient visits annually and has lost close to $1 million from the governor's line-item veto.

"We disagree strongly with the decision and we think the governor clearly overstepped his constitutional authority," Mangia said. "We feel our legal argument was extremely sound. The appellate court has made a mistake."

Kline stated that he was unmoved by a Legislative Counsel opinion. "Because the conclusions of Legislative Counsel seem to us little more than a series of ipse dixits, we accord them little weight," using the Latin phrase to suggest that the opinion was unfounded and had little authority in this case.

Schwarzenegger said he cut programs by $488 million in last year's budget revision because the Assembly failed to pass all of the measures that the legislative leaders and the governor had agreed upon. Had he not taken further action, the budget would not have been balanced.

Democrats responded that the governor made further cuts that were never agreed upon in their deal, and that he had broken their pact. They did not expect him to make reductions to key health and welfare programs, they said.

In his decision, the presiding justice also criticized the position of Democratic leaders, former Speaker Karen Bass, D-Los Angeles, and Senate President Pro Tem Darrell Steinberg, D-Sacramento. "According to interveners, the Governor's preference for a larger budget reserve is a policy determination belonging to the legislative, not the executive, branch. Facially intriguing, this argument amounts to little more than wordplay."

He went on to write, "For one thing, treating the veto as an increase in the reduction rather than as a decrease in the appropriation is as arbitrary as describing a glass of water as half full rather than half empty. By increasing the Legislature's reduction, the Governor decreases the size of the appropriation. What matters is not whether the Governor's act is seen as affirmative or negative, but its purpose and practical effect."

UPDATE (5:35 p.m.): Added comments from Jim Mangia of St. John's Well Child and Family Center.

UPDATE (6:08 p.m.): Steinberg weighed in with the following statement: "I have read the decision and the parties are reviewing all of our legal options. The Governor's line item vetoes further slashed drastic reductions in funding for vital state services. The Governor's decisions hurt thousands of Californians in profound ways, and this court decision ratifies them. I am deeply concerned about the unprecedented amount of power today's ruling gives to this and future governors."

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