Request By:
Dr. Robert Martin
Chairman
Kentucky Cancer Commission
275 East Main Street
Frankfort, Kentucky 40621
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
As Chairman of the Kentucky Cancer Commission, you request our opinion on a question of law. Specifically you ask whether or not the Governor, or any of his officials, have the authority to remove funds appropriated in 1978 from the Kentucky Cancer Commission Trust Fund without the authorization of the Commission.
KRS 214.530(1), (3) and (4) read:
"(1) The funds appropriated under Acts 1978, Ch. 176, § 5 shall be credited to the Kentucky cancer commission trust fund which is hereby created.
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"(3) Funds deposited to the credit of the Kentucky cancer commission trust fund shall be used to finance the programs authorized by KRS 214.500 to 214.530 and for no other purpose.
"(4) Funds unexpended at the close of a fiscal year shall not lapse but shall be carried forward to the next fiscal year or biennium, provided, however, that such surplus shall be included in the budget considered and approved by the commission for the ensuing period."
The Cancer Commission was created in the regular 1978 legislative session (1978 Acts, Ch. 176, § 2). In the same act (§ 5) the legislature appropriated to the Commission the sum of $1,000,000 for the fiscal year 1978-79, and $1,000,000 for the fiscal year 1979-80 from the general fund of the state treasury. KRS 214.530, quoted above, was enacted as Section 4 of the 1978 legislation. That statute created a Kentucky Cancer Commission Trust Fund. Subsection (3) of the statute provides that the cancer trust fund shall be used to finance Cancer Commission programs mentioned in KRS Chapter 214 "and for no other purpose." (Emphasis added). Subsection (4) of the statute provides that such fund money unexpended at the close of a fiscal year shall not lapse, and that such surplus, if any, must be included in the commission's budget for the ensuing year.
In the 1980 state budget (1980 Acts, Ch. 109, General Fund, Item 25, $100,000 was appropriated to the Cancer Commission for each of the fiscal years 1980-81 and 1981-82. That is new money. The surplus or unused amount of this fund after the biennium of 1978-79 and 1979-80 was approximately $1.8 million. Thus even though the $1.8 million is not reflected in the specific amount appropriations of the 1980 state budget, the fact that the Commission's funds are trust and agency funds would constitute an appropriation. See § 230, Kentucky Constitution; KRS 45.140;
Shannon v. Dean, 279 Ky. 279, 130 S.W.2d 812 (1939); and
Hopkins v. Ford, Ky., 534 S.W.2d 792 (1976) 795.
KRS 45.160 provides in part that:
"The secretary of the executive department for finance and administration is authorized, empowered and directed by the general assembly to reduce any appropriation and withhold allotments therefrom to prevent an overdraft or deficit in any fiscal year for which any appropriation is made; provided, however, that the power vested shall not permit any reduction of the appropriation of any officer, board, commission, institution or subdivision of state government that will actually impair the necessary constitutional functions of any agency whose operations and functions are determined to be necessary constitutional functions of government."
The Secretary of Finance, with the approval of the Governor, issued his order No. 80-151, in which, pursuant to KRS 45.160 and Part VI, Par. 8, 1980 Acts, Ch. 109, and in order to prevent an overdraft or deficit in the General Fund under the forecasted reduction in General Fund revenues, he established a list of reduced appropriations to budget in units under the General Fund for the fiscal year 1980-81. In addition, in reliance upon KRS 45.160, Part VI, Chapter 109 of the 1980 Budget Act, and OAG 80-410, the Secretary, with the Governor's approval, advanced $1.5 million of the Cancer Commission funds pending resolution by the 1982 General Assembly session. This simply means that $1.5 million of the Commission's funds was transferred to the General Fund to aid in the shortfall, subject to the action of the 1982 legislative session as concerns a restoration or no restoration of that money.
It is our opinion that the power of the Secretary of Finance and the Governor to reduce "any appropriation" to prevent a shortfall, pursuant to KRS 45.160, is a power emerging out of a financial emergency that transcends and cuts across the fund restrictions of KRS 214.530 (cancer funds to be used only for cancer programs). Under the doctrine of pari materia (same subject matter), KRS 45.160 and 214.530 can be read together, and effect can be given to each.
Economy Optical Co. v. Kentucky Bd. of Optometric Examiners, Ky., 310 S.W.2d 783 (1958).
This view is buttressed by the inclusion in Part VI of the 1980 state budget (1980 Acts, Ch. 109) of the principle of KRS 45.160, permitting the Secretary of Finance to reduce appropriations in order to prevent a deficit or overdraft. Since KRS 214.530 was enacted in 1978, Part VI of the 1980 budget represents the later expression of legislative will. See
Butcher v. Adams, 310 Ky. 205, 220 S.W.2d 398 (1949), pointing out that whenever statutes on any particular subject are in conflict and cannot be reconciled, the later legislation controls.
The emergency aspect of KRS 45.160, relating to deficits, strikes at the heart of all of state government. The reduction of appropriations, to be constitutional, must be equitably applied, without discrimination, and thus all budget units are subject to reductions. No budget unit is immune from reduction. See § 2 of the Kentucky Constitution, and Pritchett v. Mar hall, Ky., 375 S.W.2d 253 (1964) 238.
Moreover, the financial emergency situation presents a special and specific subject, whereas KRS 214.530, confining cancer commission funds to cancer programs, is of a less specific nature. Thus the specific should control over the more general statute.
Heady v. Com., Ky., 597 S.W.2d 613 (1980).
It can be seen that the state's financial emergency simply must transcend any budget unit considerations, provided that necessary constitutional functions of any affected agency are not impaired. We see no such impairment in this case. See OAG 80-410, dealing with the interpretation of KRS 45.160, in which we concluded that the power of reduction of appropriations extends to any state appropriation of any state fund. Under the facts we are not prepared to say that the secretary exceeded his reasonable discretion.
In summary, it is our opinion that the action of the Secretary of Finance and the Governor in reducing the Commission's appropriations was valid.