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City of Camden v. Byrne

Decided: February 5, 1980.

CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT. WILLIAM H. IMKEN, INDIVIDUALLY AND AS MAYOR OF THE BOROUGH OF HASBROUCK HEIGHTS AND THE BOROUGH OF HASBROUCK HEIGHTS, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFFS-APPELLANTS, V. RICHARD C. LEONE, INDIVIDUALLY AND AS STATE TREASURER OF THE STATE OF NEW JERSEY, SIDNEY GLASER, INDIVIDUALLY AND AS DIRECTOR OF THE DIVISION OF TAXATION OF THE STATE OF NEW JERSEY, EDWARD HOFGESANG, INDIVIDUALLY AND AS COMPTROLLER OF THE STATE OF NEW JERSEY, WILLIAM F. HYLAND, INDIVIDUALLY AND AS ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, PATRICIA Q. SHEEHAN, INDIVIDUALLY AND AS COMMISSIONER OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY, JOHN F. LAEZZA, JR., INDIVIDUALLY AND AS DIRECTOR OF THE DIVISION OF LOCAL FINANCE OF THE DEPARTMENT OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY, BRENDAN T. BYRNE, INDIVIDUALLY AND AS GOVERNOR OF THE STATE OF NEW JERSEY, THE NEW JERSEY STATE SENATE AS A BODY POLITIC OF THE STATE OF NEW JERSEY, FRANK J. DODD, INDIVIDUALLY AND AS PRESIDENT OF THE NEW JERSEY STATE SENATE AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE SENATE, THE NEW JERSEY STATE GENERAL ASSEMBLY AS A BODY POLITIC OF THE STATE OF NEW JERSEY AND S. HOWARD WOODSON, JR., INDIVIDUALLY AND AS SPEAKER OF THE NEW JERSEY STATE GENERAL ASSEMBLY AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE GENERAL ASSEMBLY, DEFENDANTS-RESPONDENTS. PAUL T. JORDAN, M.D., INDIVIDUALLY AND AS MAYOR OF THE CITY OF JERSEY CITY, ET AL., PLAINTIFFS, V. RICHARD C. LEONE, INDIVIDUALLY AND AS TREASURER OF THE STATE OF NEW JERSEY, ET AL., DEFENDANTS. MICHAEL V. MAROTTI, INDIVIDUALLY AND AS MAYOR OF THE TOWN OF BELLEVILLE, ET AL., PLAINTIFFS, V. RICHARD C. LEONE, ETC., ET AL., DEFENDANTS, AND BOARD OF COMMISSIONERS OF THE TOWN OF NUTLEY, AND THE TOWN OF NUTLEY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFFS-APPELLANTS, V. RICHARD C. LEONE, INDIVIDUALLY AND AS STATE TREASURER OF THE STATE OF NEW JERSEY, SIDNEY GLASER, INDIVIDUALLY AND AS DIRECTOR OF THE DIVISION OF TAXATION OF THE STATE OF NEW JERSEY, EDWARD HOFGESANG, INDIVIDUALLY AND AS COMPTROLLER OF THE STATE OF NEW JERSEY, WILLIAM F. HYLAND, INDIVIDUALLY AND AS ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, PATRICIA Q. SHEEHAN, INDIVIDUALLY AND AS COMMISSIONER OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY, JOHN F. LAEZZA, JR., INDIVIDUALLY AND AS DIRECTOR OF THE DIVISION OF LOCAL FINANCE OF THE DEPARTMENT OF COMMUNITY AFFAIRS OF THE STATE OF NEW JERSEY, BRENDAN T. BYRNE, INDIVIDUALLY AND AS GOVERNOR OF THE STATE OF NEW JERSEY, THE NEW JERSEY STATE SENATE AS A BODY POLITIC OF THE STATE OF NEW JERSEY, FRANK J. DODD, INDIVIDUALLY AND AS PRESIDENT OF THE NEW JERSEY STATE SENATE AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE SENATE, THE NEW JERSEY STATE GENERAL ASSEMBLY AS A BODY POLITIC OF THE STATE OF NEW JERSEY, AND S. HOWARD WOODSON, JR., INDIVIDUALLY AND AS SPEAKER OF THE NEW JERSEY STATE GENERAL ASSEMBLY AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE GENERAL ASSEMBLY, DEFENDANTS-RESPONDENTS. CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, ET AL., PLAINTIFFS, AND TOWNSHIP OF LAKEWOOD, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-INTERVENOR, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, DEFENDANT. CITY OF CAMDEN, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, AND CITY OF NEWARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-INTERVENOR-APPELLANT, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT. CITY OF LONG BRANCH, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT. EDWARD G. O'BYRNE, JAMES W. ROE, JOSEPH L. BUBBA, JOSEPH F. D'ARCO, CHARLES S. DORMAN, LOUISE FRIEDMAN, SIDNEY H. REISS, INDIVIDUALLY AS TAXPAYERS, AND COLLECTIVELY AS THE BOARD OF CHOSEN FREEHOLDERS OF THE COUNTY OF PASSAIC, PLAINTIFFS-APPELLANTS, AND COUNTY OF HUDSON, INTERVENOR-APPELLANT, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, EDWARD HOFGESANG, COMPTROLLER OF THE STATE OF NEW JERSEY, RICHARD C. LEONE, TREASURER OF THE STATE OF NEW JERSEY, SIDNEY GLASER, DIRECTOR OF THE DIVISION OF TAXATION OF THE STATE OF NEW JERSEY, NEW JERSEY STATE SENATE AS A BODY POLITIC OF THE STATE OF NEW JERSEY, MATTHEW J. FELDMAN, AS PRESIDENT OF THE NEW JERSEY STATE SENATE AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE SENATE, NEW JERSEY STATE GENERAL ASSEMBLY AS A BODY POLITIC OF THE STATE OF NEW JERSEY, JOSEPH A. LE FANTE, AS SPEAKER OF THE NEW JERSEY GENERAL ASSEMBLY AND AS REPRESENTATIVE OF A CLASS CONSISTING OF THE INDIVIDUAL MEMBERS OF THE NEW JERSEY STATE GENERAL ASSEMBLY, ALAN SAGNER, COMMISSIONER OF THE DEPARTMENT OF TRANSPORTATION OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS, AND JEREMIAH F. O'CONNOR, INDIVIDUALLY AND AS DIRECTOR OF THE BOARD OF CHOSEN FREEHOLDERS OF THE COUNTY OF BERGEN, AND THE COUNTY OF BERGEN, A BODY POLITIC AND CORPORATE OF THE STATE OF NEW JERSEY, PLAINTIFFS-APPELLANTS, V. BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, THE NEW JERSEY LEGISLATURE, ALAN SAGNER, COMMISSIONER OF TRANSPORTATION, RICHARD C. LEONE, STATE TREASURER, SIDNEY GLASER, DIRECTOR, DIVISION OF TAXATION, EDWARD HOFGESANG, DIRECTOR OF BUDGET AND ACCOUNTING, AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS. ANDREW M. SMITH, JR., INDIVIDUALLY AND AS SURROGATE OF THE COUNTY OF MONMOUTH, PLAINTIFF-APPELLANT, V. CLIFFORD GOLDMAN, STATE TREASURER, EDWARD HOFGESANG, COMPTROLLER, SIDNEY GLASER, DIRECTOR OF THE DIVISION OF TAXATION, BRENDAN T. BYRNE, GOVERNOR OF THE STATE OF NEW JERSEY, THE LEGISLATURE OF NEW JERSEY, AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



On certification to the Superior Court, Appellate Division (A-5/6/7/8/9/80 Camden v. Byrne). On certification to the Superior Court, Appellate Division, whose opinion is reported at 159 N.J. Super. 297 (1978) (A-10 Smith v. Goldman).

For affirmance -- Chief Justice Wilentz and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For reversal -- None. The opinion of the Court was delivered by Handler, J.

Handler

[82 NJ Page 141] These joint appeals arise from a number of lawsuits raising identical issues. Several municipalities and counties have challenged

the failure of the Governor and Legislature and certain state officials to appropriate and expend state revenues pursuant to particular statutes which purport to provide funds for local government uses. These challenges present major questions concerning the appropriate constitutional framework governing the state budgetary process, the responsibilities of the Legislature and Governor with respect to state expenditures, and the proper role of the courts in resolving conflicting claims between the State and its governmental subdivisions over entitlement to state revenues.

One group of cases consists of separate actions brought by the cities of Camden and Newark, the town of Nutley, and the borough of Hasbrouck Heights, in which these municipalities sought to have certain revenues appropriated for their use in the State's annual budget. Particularly, they contended that under certain provisions of the Sales and Use Tax Act, N.J.S.A. 54:32B-30 to 54:32B-36 (since repealed by L. 1976, c. 73, § 11), ten percent (10%) of the revenues that the State derived from these taxes was to be allotted "as State aid to municipalities for general municipal purposes." N.J.S.A. 54:32B-31 (repealed). The Governor did not recommend any such apportionment to municipalities in his February 4, 1975, annual budget message for the 1975-1976 fiscal year, although such funding had been recommended in all previous budget messages and included in all State budgets since 1969, the effective date of these particular provisions of the Sales and Use Tax Act. The municipalities asserted that they had anticipated receipt of such funds and had included them in their own proposed budgets which subsequently had been approved by the Director of the Division of Local Finance pursuant to N.J.S.A. 40A:4-1 et seq. Because of the absence of this appropriation in the State's General Appropriation Act, L. 1975, c. 128, these municipalities alleged the need to increase their local tax rates.

Additionally, two of the municipalities, Nutley and Hasbrouck Heights, complained in their separate suits of lost appropriations from the bus franchise replacement tax, which provides that the State make annual payments to municipalities of certain monies to replace the revenues those municipalities had previously received through collection of the since-repealed bus franchise taxes. N.J.S.A. 48:4-14.2.*fn1 Although the Governor had recommended an appropriation for this purpose in his budget message for fiscal 1975-1976 and such appropriation was included in the General Appropriation Act for that fiscal year as initially passed by the Legislature, it was effectively excluded from the final state appropriation when the Governor exercised a line item veto of this specific appropriation and the Legislature subsequently failed to override this veto.

The municipalities made several demands for relief, including a court order directing the Legislature to make the requested appropriations and the Governor to approve them. The actions were consolidated and tried in the Superior Court, Law Division, Mercer County. On motions by all parties for summary judgment, the trial court ruled in favor of defendants; plaintiffs appealed. The Appellate Division consolidated these cases with separate actions brought by several counties (see below) which were also on appeal before that court. The Appellate Division, in an unreported opinion, subsequently affirmed the trial court's decision. Camden v. Byrne, A-2828-75 (App.Div. May 11, 1978).

In a second group of cases, Bergen and Passaic Counties sought payments from the State for general highway purposes pursuant to several statutes.*fn2 N.J.S.A. 52:27B-20 provides that

certain monetary sums, labeled "mandatory dedications," are to be included in the Governor's annual budget message to the Legislature to be allotted to each county for highway expenses. N.J.S.A. 52:27B-20 B(2)(a), (b) and (c). N.J.S.A. 27:14-1 also provides for a stated amount of monies to be apportioned to each county for highway costs.*fn3 The Governor did not recommend appropriations pursuant to these statutes in his 1975-1976 budget message.

In addition, these counties, as well as Monmouth County in a separate case, also claimed that state appropriations under the Transfer Inheritance Tax Act, N.J.S.A. 54:33-1 et seq., had been wrongfully withheld. That statute provides for five percent (5%) of the transfer inheritance taxes collected by the State on "property of resident decedents in the county" to be paid over to the county. N.J.S.A. 54:33-10. Although the Governor originally proposed this funding in his budget message and it was included in the initially passed appropriation act, the Governor exercised his line item veto power to exclude it from the final appropriation act.

Bergen and Passaic Counties sought a court order that various State officials pay over the monies they believed should have been apportioned to the counties or, in the alternative, to enjoin the appropriation of such funds for any purpose other than for county use. These suits were consolidated and tried in the Superior Court, Law Division, Bergen County, where summary judgment was subsequently entered for defendants. Following

the entry of judgment, an appeal was taken to the Appellate Division, where, as already mentioned, these actions were consolidated with those of the municipalities. Again, as noted above, the Appellate Division, in an unreported opinion, affirmed the trial courts' decisions in both groups of cases.

The separate suit instituted by Monmouth County was a direct appeal to the Appellate Division. The county complained not only of the failure of the State to appropriate the proceeds of the transfer inheritance tax for fiscal year 1975-1976, but for fiscal 1976-1977 as well. It sought a court order directing the State Treasurer and Comptroller to remit the funds in question to the county. In a separate opinion, the Appellate Division ruled in favor of defendants. Smith v. Goldman, 159 N.J. Super. 297 (App.Div.1978). Petitions for certification to this Court were granted in all cases. 79 N.J. 468-469 (1978); 81 N.J. 330 (1979).

I

Article VIII, Section II, paragraph 2 of the New Jersey Constitution (1947) controls on the issues raised by these appeals. This clause mandates that withdrawals of all monies from the State treasury can be accomplished only by legislative appropriation; it further provides for "one general appropriation law covering one and the same fiscal year." Its precise terms in this respect are as follows:

No money shall be drawn from the State treasury but for appropriations made by law. All moneys for the support of the State government and for all other State purposes as far as can be ascertained or reasonably foreseen, shall be provided for in one general appropriation law covering one and the same fiscal year . . .. [ N.J.Const. (1947), Art. VIII, § II, par. 2.]

It is, of course, obvious that the several statutes involved in this litigation calling for the disbursements of tax revenues, namely, the sales and use tax, N.J.S.A. 54:32B-31, the transfer inheritance tax, N.J.S.A. 54:33-10, and the bus franchise replacement

tax, N.J.S.A. 48:4-14.2, as well as for the expenditure of state funds for county highways, N.J.S.A. 52:27B-20 B(2)(a), (b) and (c) and N.J.S.A. 27:14-1, do not constitute legislative appropriations in and of themselves. Additionally, these separate enactments have not been aggregated or included within a single appropriation law encompassing one fiscal year. They cannot serve, therefore, as valid authority for the withdrawal of monies from the State treasury under the State Constitution.

There cannot be the slightest doubt that the above-quoted provision of our Constitution firmly interdicts the expenditure of state monies through separate statutes not otherwise related to or integrated with the general appropriation act governing the state budget for a given fiscal year. This particular clause, Article VIII, Section II, paragraph 2, is the center beam of the State's fiscal structure. It cannot in any sense be regarded as merely providing governmental "housekeeping details," necessary and important but not truly vital. See Vreeland v. ...


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