Request By:
Richard V. Beliles
State Chair, Common Cause Kentucky
Lee A. Jackson, President, and Charles B. Wells, Executive Director
Kentucky Association of State Employees/ American Federation of Teachers, AFL-CIO
Opinion
Opinion By: Gregory D. Stumbo, Attorney General; Michelle D. Harrison, Assistant Attorney General
Opinion of the Attorney General
In December 2003, Governor Fletcher announced that he would increase the annual salaries of his newly appointed Cabinet Secretaries and other appointees in the new administration, an action which prompted the subject requests. As Chairman of Common Cause Kentucky, "a non-profit and non-partisan citizen organization, and on behalf of the taxpayers of Kentucky," Mr. Beliles has asked us to address the following question: "Does the Governor of Kentucky have the legal authority, in the fiscal biennial of [2003-2004], to raise his aides and Cabinet officers' salaries by 15% notwithstanding" Section 230 of the Kentucky Constitution and the final two sentences of HB 269, Part IV, Item Three? In his view, an opinion is needed to help determine whether KRS 18A.355(1) applies to "anyone holding these employment positions with state government" regardless of whether they are "members of the present administration or the previous administration."
Recognizing the "separation of powers doctrine and the authority of the General Assembly to adopt the state's budget, " Mr. Jackson and Mr. Wells have similarly requested an opinion "as to whether the actions taken by Governor Fletcher to pay significant salary increases to his newly appointed Cabinet Secretaries (and others) [are] in violation of the General Assembly's authority to appropriate and direct the expenditure of the funds of the Commonwealth of Kentucky."
During its 2003 Regular Session, the General Assembly enacted House Bill 269, also known as the state budget bill. At the center of the current debate is Part IV, Item Three of HB 269, which provides:
Notwithstanding KRS 18A.355(1),[] a cost-of-living adjustment of two and seven-tenths percent is provided in fiscal year 2002-2003 on the base salary or wages[] of each eligible state employee[] on their anniversary date. Notwithstanding KRS 18A.355(1) and 151B.035, a cost-of-living adjustment amounting to an annualized value of $ 1,080 is provided in fiscal year 2003-2004 on the base salary or wages of each eligible permanent full-time state employee on their anniversary date. Commencing with an eligible employee's anniversary date, the cost-of-living adjustment shall be disbursed by payroll period in a one-twenty-fourth installment for the duration of the employment. The Secretary of the Personnel Cabinet, in consultation with the State Budget Director, shall determine the pro rata amount of the cost-of-living adjustment to be provided to permanent part-time employees. The cost-of-living adjustment shall be part of the salary or compensation base of the employee. A salary increase shall not be authorized for the following KRS Chapter 18A or 151B unclassified positions after June 30, 2003: Cabinet Secretary, Deputy Secretary, Commissioner, Deputy Commissioner, Executive Director, Deputy Executive Director, Division Director, Principal Assistant, General Counsel, or any other position subject to the provisions of KRS 12.050.[] No salary increase shall be authorized, after June 30, 2003, for any employee appointed pursuant to KRS 11.040(1).[]
In response to the initial request from Common Cause, Robbie Rudolph, Secretary of the Finance and Administration Cabinet, defended the salary increases awarded by the Governor. As correctly observed by Secretary Rudolph, under KRS 48.500(1) and Part III, Item 12 of HB 269, he has "exclusive authority to decide all questions that arise as to the meaning of items in the Executive Branch Budget. "
In
LRC v. Brown, Ky., 664 S.W.2d 907, 927 (1984), the Kentucky Supreme Court found that the trial court had erred in determining that KRS 48.500 was void because it permitted a legislative veto of executive action in administering the budget. As explained by the Court, when the affected branch complies with either of the conditions specified in KRS 48.500(4), it may proceed with its own interpretation meaning the "decision is ultimately left up to the affected branch." Id. While the Interim Joint Committee on Appropriations and Revenue may disagree or object to a contested interpretation, "the bottom line is that it may not veto the decision of the affected branch." Id. Accordingly, there is no legislative veto nor "out of session action by the General Assembly or its designee, the LRC, that can effectively prevent the affected branch of government from acting on its own budget with respect to matters of interpretation." Id.
Resolution of the issue presented necessarily requires interpretation of statutory language that directly affects the Executive Branch. Consistent with the mandatory language of KRS 48.500, which was upheld in
LRC v. Brown, supra, and Part III, Item 12 of HB 269, then, our analysis necessarily begins with the position set forth by Secretary Rudolph. In his view:
When read in full, Paragraph One plainly relates only to the annual 5% cost-of-living adjustment provided by KRS 18A.355(1) and nothing else. Indeed, paragraph one's purpose is to set aside the ordinary, annual 5% cost-of-living adjustment for government employees and to provide instead a lesser increment for most employees. Additionally, paragraph one entirely eliminates the cost-of-living adjustment for specified high-level positions.
Two contextual clues clearly demonstrate that Paragraph One's only restriction on salaries for specified high-level positions is the elimination of the usual annual cost-of-living adjustment. First, Paragraph One purports to set aside KRS 18A.355(1), which is entitled "Annual Salary Increments" and clearly only relates to annual cost-of-living adjustments. Paragraph One does not set aside any statutory provisions concerning initial salary levels, such as KRS 64.640(2). KRS 64.640(2) states in part that "the Governor shall set the compensation payable out of the State Treasury to each officer or position in the state service, which officer or position heads a statutory administrative department, independent agency, or other unit of state government ...." Second, Paragraph One employs the phrase "cost-of-living adjustment" some five times before using the alternative phrase "salary increase. " Given this context, then, paragraph one's reference to "salary increases" in its concluding sentences refers to cost-of-living adjustments, not to the setting of an initial salary. In sum, paragraph [one] eliminates any annual cost-of-living adjustment for specified high-level positions but does not affect the Governor's discretion to set initial salary levels for those positions.
Consequently, considering all the relevant legal authorities, it is my considered opinion that the initial salaries of the new Cabinet Secretaries and other high-level personnel in the new administration do not violate Item 3 of Part IV of the current Executive Branch Budget.
It is the opinion of this office that both logic and the governing authorities, including fundamental principles of statutory construction, support Secretary Rudolph's interpretation of Part IV, Item Three of HB 269. As evidenced by the foregoing, Part IV, Item Three of HB 269 must be viewed in light of KRS 64.640(2). Because Item Three does not repeal KRS 64.640(2), either expressly or by implication, and no conflict exists between HB 269 and this preexisting statute as required to temporarily suspend its operation since the prohibited "salary increase" is the annual "cost-of-living adjustment" in the context of Item Three, we conclude that Governor Fletcher acted within this authority under KRS 64.640(2) and did not violate HB 269 in setting the initial salaries of his newly appointed Cabinet Secretaries and other appointees.
In
Armstrong v. Collins, Ky., 709 S.W.2d 437, 438 (1986), the Supreme Court addressed "to what extent, if any, the General Assembly of the Commonwealth may, in adopting a budget bill and based on the financial condition of the Commonwealth[,] provide therein for the reduction, elimination and transfer of appropriated funds, and for all practical purposes, provide as a result thereof, that the effectiveness of certain existing statutes is temporarily modified." Citing
LRC v. Brown, supra, the Court reiterated that when the budget is enacted as a bill, as opposed to a resolution, the provisions thereof can operate to repeal existing statutes. Id. at 441. That being said, the Court further reasoned that if the General Assembly has the constitutional power to repeal or amend existing statutes in a budget bill, the power to suspend or modify existing statutes in the same budget bill would necessarily follow. Id. at 443. "It is beyond cavil that the General Assembly can suspend the operation of statutes." Id. at 442. Given the General Assembly's "exclusive authority" with respect to public funds and the budget, the Court "had no problem in deciding that [Section 15 of the Kentucky Constitution] applies to statutes affected by the budget bill of the Commonwealth." Id. at 443.
Having reiterated the proposition that the General Assembly may constitutionally repeal or amend existing statutes by virtue of a budget bill, "so long as said bill complies with Ky. Const. Sec. 51," and "emphasized the obvious," that "the General Assembly may also suspend or modify existing statutes" in the same manner, the Court next addressed the contention that the acts in question did not comply with the mandate of Section 51. Id. Of particular relevance here, the Court clarified that application of the "re-enactment and publication requirement" is limited by its own wording to "amendment, revision, extension or conferring of existing statutes." Id. at 445. If a challenged statutory enactment falls within the proscribed activities, rather than being merely suspensory in nature, then, it violates the second requirement of Section 51. Id. Conversely, if the enactment is merely a suspension or modification, no violation occurs. Id. At most, HB 269 suspends or modifies KRS 64.640 so Section 51 is not implicated. Because the General Assembly had cited the deteriorating financial condition of the state as a premise for its action in Armstrong, the Court ultimately determined that it had exercised "proper legislative discretion and judgment" in temporarily suspending the enumerated salary statutes as it "clearly has the power to do." Id.
More recently, the Kentucky Court of Appeals reaffirmed the validity of the principle established in
LRC v. Brown, supra, "that a budget is required to be enacted as a bill as opposed to a resolution and, as such, has the power to amend or repeal existing statutes."
Commonwealth of Kentucky Education and Humanities Cabinet, Department of Education v. Gobert, Ky. App., 979 S.W.2d 922, 927 (1998). In so doing, however, the Court also found that the appellee's reliance on KRS 446.085 and Armstrong v. Collins, which interpreted KRS 446.085, was misplaced since KRS 446.085 had already been repealed at the time that the cause of action arose and the fact that it was effective when the budget was enacted "made no difference." Id. Adopting the trial court's view, the Court of Appeals observed that a bill proposing to amend or repeal an existing statute "must specifically delineate the proposed changes and, if it purports to change the entire section, must list the statute by number[,]" citing KRS 446.145 as authority. Having reviewed the relevant passage from the 1994 budget bill, the Court agreed that the dictates of KRS 446.145 had not been followed. Id. Such is the case here.
As the language from the budget bill does not mention KRS 64.640(2)], does not make any reference to repealing that particular statute, and does not refer to or expressly repeal any other existing statute, the budget bill cannot be construed to expressly repeal KRS [64.640(2)] or any other statute.
Id.
In light of this determination, the question necessarily becomes whether HB 269 repeals KRS 64.640(2) by implication. A statute may be repealed by the express provision of a subsequent statute, which is noticeably lacking from HB 269, or by implication "when the provisions of the earlier and later statutes are repugnant to each other and irreconcilable, or when the subsequent statute covers the whole subject matter of the former and is manifestly intended as a substitute for it."
Dreidel v. City of Louisville, 268 Ky. 659, 105 S.W.2d 807, 808 (1937). However, it is a well-settled principle of statutory construction that repeal by implication is disfavored. Id. Equally well-settled is the corollary rule that "where two laws exist, they should be construed, if possible," so as to effectuate the legislative intent. Id. at 809.
More specifically, the presumption against repeals by implication has been applied "with full vigor" to the claim that an appropriation measure has the effect of excepting something from the operation of a prior general statute.
Committee for Nuclear Responsibility, Inc. v. Seaborg, 463 F.2d 783, 785 (D.C. Cir. 1971). Accordingly, such repeals are " never sanctioned, unless there is such an irreconcilable conflict between the two that reasonable effect cannot be given" to both. Id. (Emphasis added). Said another way, the implication by repeal of any act by a subsequent act "must be so clear as to be equivalent to an explicit declaration to that effect." Id. See also
Shewmaker v. Commonwealth, Ky. App., 30 S.W.3d 807 (2000);
Tipton v. Brown, 277 Ky. 625, 126 S.W.2d 1067 (1939) and
Dishman v. Coleman, 244 Ky. 239, 505 S.W.2d 504 (1932). Even assuming arguendo that HB 269 could properly be interpreted as conflicting with KRS 64.640(2), the conflict could not properly be characterized as irreconcilable in our view since "reasonable effect" can be given to both provisions. Having concluded that HB 269 does not repeal KRS 64.640(2) expressly or by implication, we must now address whether HB 269 temporarily suspended the operation of KRS 64.640(2), a determination which necessarily hinges on whether any conflict exists between these two statutes. Resolution of this issue turns on the intended meaning of "salary increase" in the current context.
As with any issue involving statutory interpretation, "our duty is to ascertain and give effect to the intent of the General Assembly" as expressed by the language employed.
Beckham v. Board of Education of Jefferson County, Ky., 873 S.W.2d 575, 577 (1994). In so doing, "we are not at liberty to add or subtract from the legislative enactment nor discover meaning not reasonably ascertainable from the language used." Id. We must refer to the literal language of the statute as enacted rather than surmising what may have been intended but was not articulated.
Stogner v. Commonwealth, Ky. App., 35 S.W.3d 831, 835 (2000). To determine legislative intent, we "must construe all words and phrases according to the common and approved uses of language."
Withers v. University of Kentucky, Ky., 939 S.W.2d 340, 345 (1997). In other words, we "must accord to words of a statute their literal meaning unless to do so would lead to an absurd or wholly unreasonable conclusion."
Clevinger v. Board of Education of Pike County, 789 S.W.2d 5, 9 (1990).
Pursuant to KRS 64.640(2):
The Governor shall set the compensation payable out of the State Treasury to each officer or position in the state service, which officer or position heads a statutory administrative department, independent agency, or other unit of state government, except for those excluded under subsection (1) of this section. Such compensation shall be based upon studies of the duties and responsibilities and classification of the positions by the Governor and upon a comparison with compensation being paid for similar or comparable services elsewhere, provided, however, such compensation shall not exceed the total taxable compensation of the Governor derived from state sources, the provisions of KRS 64.660 to the contrary notwithstanding. For the purposes of this section, the total taxable compensation of the Governor from state sources shall include the amount provided for compensation to the Governor under KRS 64.480 and any benefits or discretionary spending accounts that are imputed as taxable income for federal tax purposes. (Emphasis added).
In OAG 80-265, the Attorney General interpreted this provision as authorizing the Governor to "establish compensation for his cabinet officers at any reasonable amount, not to exceed the amount provided for the Governor in KRS 64.480(1)." Id., p. 2. Giving this unambiguous language its literal meaning, as we must, validates the premise upon which Secretary Rudolph's argument is based, namely, that establishing the initial salaries of designated employees, which is uniquely within the province of the Governor, is a separate and distinct function from that of increasing the annual salaries of those employees by the annual cost-of-living adjustment. Although we find this argument persuasive, particularly when viewed with the deference mandated by Part III, Item 12 of HB 269, Item 12 must be read in conjunction with Item 10 of Part III. In relevant part, Item 10 provides: "All statutes and portions of statutes in conflict with any of the provisions of this section, to the extent of the conflict, are suspended unless otherwise provided by this Act." To summarize, the common theme is the necessity of a conflict. Absent a conflict, no suspension of the statutory provision that purportedly conflicts with the budget bill occurs.
Part IV, Item Three of HB 269 begins with the phrase, "Notwithstanding KRS 13A.355(1), ..." "As a general rule of statutory construction, expression unius est exclusion alterius provides that an enumeration of a particular thing demonstrates that omission of another thing is an intentional exclusion." Palmer, supra, at 764. Accordingly, we must assume that the General Assembly intentionally omitted the modifying language, "Notwithstanding KRS 64.640(2)," from Item Three with the necessary implication being that the General Assembly did not intend to suspend the operation of that provision. As the Court of Appeals emphasized in Palmer, "it has been held that where the legislation includes particular language in one section of a statute, but omits it in another section of the same Act, it is generally presumed that the legislature acted intentionally and purposefully in the disparate inclusion or exclusion." Id., supra, citing
Keene Corporation v. United States, 508 U.S. 200, 113 S. Ct. 2035, 124 L. Ed. 2d 118 (1993). A logical extension of this reasoning is that the General Assembly did not intend to distinguish a "cost-of-living adjustment" from a "salary increase. " To the contrary, the General Assembly uses the terms interchangeably in this limited context as demonstrated by the "contextual clues" cited. A closer examination of KRS 18A.355(1) further validates this conclusion since it dictates that an employee's " base salary or wages shall be increased by the annual increment. " (Emphasis added). Likewise, when an employee is granted an increment "due to a promotion, reallocation, reclassification, or salary adjustment, the employee's base salary or wages shall be increased by the amount of such increment. " (Emphasis added). KRS 18A.355(1). By its express terms, then, KRS 18A.355(1) consistently refers to the cost-of-living adjustment as an increase in salary. Although the final two sentences of Item Three potentially conflict with KRS 64.640(2) when viewed in isolation, we "must not be guided by a single sentence in each statute" when resolving an apparent conflict, but must "look to the provisions of the whole statute." Shewmaker, supra, at 809;
County of Harland v. Appalachian Regional Healthcare, Inc., 85 S.W.3d 607, 611 (2002). Applying these fundamental principles to the facts presented leads us to conclude that no conflict exists between HB 269 and KRS 64.640(2) as required for the former to suspend or modify the latter.
A Legislative Research Note dated June 24, 2003, KRS T. VI, Ch. 47, Refs & Annos, further substantiates this conclusion. In relevant part, the LRC Note provides:
When a specific statute or range of statutes has been affected by the budget bills, the official publishers [the LRC] have inserted a note providing the applicable citation to the branch budget bill and the page reference for the final budget memorandum of that branch.
Noticeably absent from the annotated version of KRS 64.640 is any reference to HB 269. While that omission is not dispositive standing alone, it is noteworthy when considered along with the aforementioned factors. "It is presumed that the Legislature was cognizant of preexisting statutes at the time it enacted a later statute on the same subject matter." Shewmaker, supra, at 809.
From a policy standpoint, "there is a good argument for permitting the Governor to set salaries for his cabinet officers and commissioners. He is responsible for their work and level of performance[,] and he needs to attract the best [people] for those jobs." OAG 77-627, p. 2. However, "this is purely a matter of legislative policy," with which the courts have "no legitimate concern in the absence of constitutional impingement." Nor do we. Id., citing
Kentucky State Fair Board v. Fowler, 310 Ky. 607, 221 S.W.2d 435, 439 (1949). "When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, [as is the case here,] rather than whether it is a reasonable choice within a gap left open by [the General Assembly], the challenge must fail." Chevron, supra, 467 U.S. at 865, 104 S. Ct. at 2793.
Our analysis ends where it began. According to Secretary Rudolph, Part IV, Item Three of HB 269 "eliminates any annual cost-of-living adjustment for specified high-level positions but does not affect the Governor's discretion to set initial salary levels for those positions." Given the mandatory language of KRS 48.500(1), as incorporated into HB 269 by virtue of Part III, Item Twelve, the decision of the Secretary is "final and conclusive" as to the question presented assuming his decision is a "reasonable one." Based on the foregoing, this office must defer to the judgment of Secretary Rudolph since his decision gives " reasonable effect" to both statutes. Accordingly, we conclude that Governor Fletcher acted within his authority under KRS 64.640(2) in establishing the salaries at issue and did not violate HB 269.