On certification to the Department of Personnel.
Garibaldi, Wilentz, Clifford, Handler, Pollock, O'Hern, Stein
The opinion of the court was delivered by
These joint appeals arise from lawsuits raising identical issues that challenge the Governor's refusal to implement employee layoffs in the manner mandated by the Legislature in the 1993 Fiscal Year Appropriations Act, L. 1992, c. 40 (the "Appropriations Act" or the "Act"), as amended by Senate Bill 996, L. 1992, c. 99, (the "Appropriations Amendments" or "Senate Bill 996"). Unlike the language of the original Appropriations Act that obligated the Governor "whenever possible" to avoid the layoff of career State employees, the language of Senate Bill 996 is mandatory and directs that personnel reductions shall be accomplished by layoffs of managerial and other exempt personnel outside the collective bargaining units.
The critical issue is whether the Act, as amended by Senate Bill 996, violates the separation-of-powers provision of the New Jersey Constitution, article III, paragraph 1, by allowing the Legislature to interfere excessively with the Governor's constitutional authority to manage government.
A. The 1993 Appropriations Act
On June 25, 1992, the New Jersey Legislature passed the Appropriations Act. The Act directed that various departments of State government accomplish personnel savings through staff reduction. Specifically, most departmental appropriations contained a proviso that authorized the intra-departmental transfer of funds
from the other appropriations made for Salaries and wages in the department to reflect savings throughout the department from the reduction of employees whose annual salaries exceed $50,000. Such savings shall first be made by reduction of employees in the unclassified service. If those reductions in the unclassified service are insufficient, additional reduction of employees shall be made in the classified service. These reductions shall be made among management and administrative personnel and shall, to the maximum extent possible, not affect direct service personnel. If reductions are made of employees in the classified service, the commissioner shall provide written notice and justification of such action to the Director of the Division of Budget and Accounting and the Joint Budget Oversight Committee.
[S. 1000, § 1 (Department of Banking Appropriations).]
Additionally, in a provision applying to all appropriations, the Act stated:
38. Notwithstanding the provisions of any law to the contrary, no State Troopers, corrections officers or personnel providing services in any institution operated by the State shall be laid off. Whenever possible, layoffs shall exclude those employees of any department who provide direct services and shall also exclude career employees who have occupied the same job title for at least five years or who have ten years of State service.
On June 26, 1992, the Governor vetoed the Act, and on June 30, 1992, the Legislature overrode the Governor's veto, and the Appropriations Act became law.
B. Senate Bill 996 -- The Amendment to the Appropriations Act
On June 29, 1992, the Legislature approved an amendment to the Appropriations Act. Senate Bill 996 amended section 38 to add communications operators, security guards, alcoholic beverage control inspectors, and marine police officers to the list of employees who could not be laid off. Senate Bill 996 also deleted the discretionary "whenever possible" language of section 38 and replaced it with the following mandatory language:
Savings required to be realized through the reduction of personnel shall be made by the reduction of managerial and other exempt personnel outside the collective negotiations units in the unclassified service, and then, if necessary, by the reduction of managerial and other exempt personnel outside the collective negotiations units in the career service. As used in this section, managerial and other exempt personnel means employees assigned to employee relations groupings X, M, D, E, V, Z, Y and W.
The employee-relations groupings listed in the amendment are among the higher paid of State workers and are exempt from union representation, based on either their managerial or confidential status.
On September 10, 1992, Governor Florio vetoed Senate Bill 996. In his veto message, the Governor stated that "within the confines of [the Appropriations Act] and the massive cuts enacted by the Legislature, I agree wholeheartedly with the spirit of that priority list. And, as interpreted by the Attorney General, I believe this language is sufficiently permissive that it does not run afoul of the State Constitution." However, the Governor stated that the mandatory provisions of the Appropriations Amendment are "a completely different matter" that "would impose upon the Executive Branch a series of restrictions that would clearly interfere in the Executive's constitutional duty to manage government."
On September 14, 1992, the Legislature overrode the Governor's veto, and Senate Bill 996 became law.
C. The Executive Branch's Response to the Act
The Governor sought advice from the Attorney General concerning the constitutionality of the Appropriations Act and the Appropriations Amendments. The Attorney General in a letter opinion dated July 2, 1992, advised the Governor that the personnel reduction language in the Appropriations Act as drafted was permissive and hence did not violate the separation-of-powers doctrine. As the Attorney General read the Appropriations Act, "the legislative directive does not differ significantly from existing Department of Personnel practices (as embodied in statutes and regulations) governing reductions in force." (citations omitted). He therefore concluded:
We reasonably may read the conditional budgetary language as referring to and being consonant with existing statutory and administrative practice. In this way, the conditional language does not interfere with the substantial degree of discretion agencies have to marshal the resources appropriated to carry out the many statutory duties.
However, the Attorney General then wrote that if the personnel reduction language were read as dictating particular staffing decisions for each agency, it would be unconstitutional. He also concluded that the exemption of certain classes of employees from layoff violated the separation of powers because those categorical exemptions "could severely hamper the Governor's discretion as to how to administer the government efficiently with fewer employees."
Based on the Attorney General's opinion, on July 2, 1992, the Governor's Chief Counsel issued a directive to all members of the Governor's cabinet instructing them "not to follow the language provisions which [the Attorney General] has identified as unconstitutional."
In response to the Appropriations Act, the State departments prepared layoff plans, which they submitted to the Commissioner of the Department of Personnel, Anthony Cimino, for his review. On or about July 10, 1992, the Commissioner wrote to several department heads, informing them that their layoff plans were unacceptable "because, among other reasons, the management reductions that are made disproportionately impact employees in lower salaried ranges represented by bargaining units." On August 5, 1992, the Commissioner approved all department layoff plans and so notified each department head. Based on the various plans, the State was to lay off 1,459 employees on October 2, 1992.
According to plaintiff Communications Workers of America, AFL-CIO (the "CWA"), the union represents approximately 900 of the employees that were slated for layoff. Only 450 employees of the 1,459 were from the unclassified or managerial ranks. In its amended notice of appeal, CWA asserts that the "vast majority of employees who have been targeted for layoff on or about October 2, 1992 receive annual salaries of less than $50,000. Hundreds of targeted employees, performing vital clerical and other functions, earn less than $20,000 per year." CWA further asserts that "although there are approximately 6,000 unclassified employees in State government, of the 1,500 employees targeted for layoff, fewer than one-third are in the unclassified service. The vast majority of employees to be laid off are not managerial or exempt personnel * * * ."
D. Letter from the Office of Legislative Services in Response to the Opinion Letter of the Attorney General
On August 7, 1992, the Executive Director of the Office of Legislative Services, Albert Porroni, issued a letter to the Senate President and General Assembly Speaker in which he disagreed with the Attorney General's opinion letter of July 2, 1992. According to Porroni,
In times of economic distress, such as result in the revenue shortfalls expected by this State in the prior and current fiscal years, the Legislature may determine that sufficient funds are not available to fully fund all programs or projects. Policy determinations must be made. The Legislature may choose not to fund programs at all, to partially fund programs or to establish priorities within programs. See City of Camden v. Byrne, 82 N.J. 133 (1980). Contrary to the Conclusion of the Attorney General, such determinations and priorities are for the Legislature, not the Executive Branch, to make. Once the Legislature establishes its priorities, the Executive Branch must administer existing programs within the limits of those priorities.
Because the Legislature viewed its establishment of restrictions as a constitutional act in furtherance of its appropriations powers, Porroni concluded that "we are of the opinion that the Legislature, by law, may direct certain administrative aspects of the State Government[,] especially those rationally related to an appropriation or fiscal policy."
On August 12, 1992, the CWA and Robert W. Pursell, plaintiffs, commenced an action in the Law Division against defendants, Governor Jim Florio, Commissioner of Personnel Anthony Cimino, and State Treasurer Samuel Crane. Plaintiffs seek a judgment that defendants are in violation of the Act and an order enjoining defendants from violating the Act and directing the rescission of all layoff notices served on employees in violation of the Act. On September 25, 1992, the Law Division granted defendants' motion to transfer Count 1 of the Complaint to the Appellate Division. Another count in that complaint is not before us.
On September 29, 1992, John Hartmann, a member of the New Jersey General Assembly, filed a complaint in the Law Division against Governor Florio, Commissioner Cimino, and Treasurer Crane, demanding the same relief as requested by CWA in its action. On September 29, 1992, Assemblyman Hartmann filed an amended complaint in the Law Division, in which Dick LaRossa and Peter Inverso, members of the New Jersey Senate, and Paul Kramer, Robert Singer, Melvin Cottrell, and Barbara Wright, members of the General Assembly, joined as party plaintiffs. On October 1, 1992, the legislators filed a verified amended complaint.
On October 2, 1992, CWA filed an amended complaint in the Appellate Division, which it termed an "amended notice of appeal." The legislators' suit was consolidated on appeal with CWA's suit. Plaintiffs also filed an application for emergent relief enjoining the layoff of State employees scheduled for October 2, 1992. The Appellate Division, with one Judge Dissenting, denied the application for a stay pending appeal. Plaintiffs brought a motion for a stay to this Court, and on October 2, 1992, Justice Handler granted a stay of the layoffs pending review by the full Court on October 5, 1992. On that date, the Court vacated the stay but directly certified the consolidated appeals pursuant to Rule 2:12-1.
A. The Separation-of-Powers Provision
Article III, paragraph 1 of the New Jersey ...