Unclear how court would rule

Connecticut Attorney General George Jepsen opined Tuesday it’s not exactly clear how the court would view the spending decisions Democratic Gov. Dannel P. Malloy has made in the absence of a state budget, because the decision the judiciary would have to apply is 125 years old.

“The precise constitutional limits of the Governor’s authority are difficult both to delineate and apply,” Jepsen wrote.

State v. Staub, the court case that set the precedent used to determine how money should be spent in the absence of an appropriation from the legislature, was decided 125 years ago.

“For this reason, we have in the past strongly advised that a continuing resolution be adopted until a budget could be enacted,” Jepsen wrote Tuesday in an opinion. “Of course, that is not the circumstance in which we presently find ourselves.”

Senate Republican President Len Fasano, R-North Haven, requested the formal opinion from Jepsen in mid-August.

In his request, which he renewed Tuesday before the opinion was released, Fasano questioned the legality of how Malloy planned to distribute the excess cost payments for special education and the legality of both the motor vehicle tax cap and Malloy’s changes to the Municipal Revenue Sharing program.

On the excess costs for special education, Jepsen found “there does not appear to be a statutory basis authorizing the governor to make this reduction.” He said a court could find the full amount must be paid under the grant.

Jepsen said the first 75 percent of the grant isn’t paid until February and the remainder is paid in May.

“It is possible that changes in circumstances between now and when the payments come due may render this question moot,” Jepsen wrote.

As for the Municipal Revenue Sharing Account, which is funded by part of the proceeds from the state sales tax, the money has not been collected. Once there is money in the account, “a court could conclude that the governor would have the obligation to pay such funds in the priority set forth in the statute.”

With respect to the cap on municipal car taxes, Jepsen wrote, “By selecting the 37 mill rate, rather than making a pro rata reduction in light of the lack of sufficient funds to reimburse at the statutory 32 mill rate, for example, some municipalities may receive grants while others that have mill rates that exceed 32 mills might receive none. A court could conclude that this is not an outcome that the statute permits.”

He said he cannot predict with any reasonable certainty how a court would apply “imprecise guidance of a case from the late 19th century” to “ultimately resolve these difficult questions, and the governor’s actions may be defensible in a court challenge.”

Fasano said Jepsen’s opinion makes Malloy’s executive order “dubious” at this point.

In a letter to Jepsen, Malloy defended his executive order.

Malloy said the actual excess costs for special education won’t be known until December, when towns submit applications. As far as the Municipal Revenue Sharing Account is concerned, Malloy said the money in the account did not begin to accrue until after Aug. 15 so he would not be able to spend money that’s not in the account.

Lastly, he said there is nothing in the executive order that adjusts the motor vehicle mill rate tax cap.

“I have an obligation to follow the law, and I will meet any statutory spending obligations,” Malloy said..

The House was expected to sustain the governor’s veto Tuesday.

Malloy said Monday they need to get a budget passed by Oct. 13. However, bipartisan budget negotiations were canceled Tuesday.

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