Polk County District Court Judge Brad McCall has upheld a legal challenge to Governor Terry Branstad’s veto of language intended to keep Iowa Workforce Development offices open across the state. Excerpts from the court ruling and background on the controversy are after the jump.

Background: Iowa Workforce Development officials announced plans early this year to close most of the agency’s 55 field offices around the state. The state budget for fiscal year 2012 included $3 million in funding designated for keeping all Iowa Workforce Development field offices open, but Branstad used his line-item veto power to reject that language in July. Democratic state legislators and the president of AFSCME in Iowa filed a lawsuit in August, claiming that the governor cannot veto language on the Iowa Workforce Development offices without vetoing the appropriation as well.

Judge McCall found that two of the challenged line-item vetoes exceeded the governor’s authority. The full 16-page ruling is here (pdf). On pages 2 through 5, the judge noted the difference between “riders” attached to appropriations bills, which the governor may veto, as opposed to “conditions” attached to appropriations, which can be vetoed only if the governor also vetoes the relevant appropriation.

Pages 6 through 9 of the ruling deal with the core issue in this lawsuit. Judge McCall found that the language Branstad vetoed (“the department shall not reduce the number of field offices below the number of field offices being operated as of January 1, 2009”) was “inseparably connected” to an appropriation of $8,660,480, which Branstad did not veto.

Had the legislature not placed this limitation on the number of field offices it was financing, it may have allocated less money for their operation. “The Governor [can] not let the appropriation stand yet nullify the condition upon which the legislators gave their consent to the expenditure.”32

This affirmative qualification on the appropriated funds could not be vetoed by the Governor without a veto of the corresponding appropriation. Accordingly, Governor Branstad’s attempted item vetoes of Division I, Section 15, paragraph 3(c), and of Division IV, Section 61, paragraph 3(c), were improper and ineffective.

Judge McCall also rejected Branstad’s item veto of language defining “field office” for Iowa Workforce Development. Lawmakers required that a field office employ a staff person and excluded from the definition “a workforce development center maintained by electronic means.”

Read in the context in which they were enacted, the legislative limitations embodied in the definitions contained in the vetoed provisions were clearly intended by the legislature to apply directly to the funds appropriated “for the operation of field offices”. With the use of the phrase “in this section” the legislature evinced an intent to place restrictions on the use of the appropriations it made earlier in the section. Moreover, if the definitions contained in Section 15, paragraph 5, were vetoed, eliminating any statutory definition for a “field office”, the appropriation contained in Section 15, paragraph 3 “for the operation of field offices” would be meaningless. […]

In the context in which they were included in SF 517 the definitions for “field office” and “workforce development center” constituted qualifications and limitations on the use of the funds specifically appropriated “for the operation of field offices”. To allow those definitions to be stricken would empower the governor to “distort, frustrate or defeat the legislative purpose. . . He would thereby create new law, and this power is vested in the Legislature and not in the Governor.” 39

Because he failed to veto the $8,660,480 appropriation conditioned by the definitions in Division I and the $4,330,240 appropriation conditioned by the definitions in Division IV, Governor Branstad’s item vetoes of Division I, Section 15, paragraph 5 and Division IV, Section 61, paragraph 5, were ineffective.

Finally, Judge McCall supported Branstad’s position regarding a line-item veto of language seeking to prevent Iowa Workforce Development from using funds for the National Career Readiness Certificate program.

Unlike the two vetoed limitations discussed above, which were specifically limited and tied only to the appropriation “for the operation of field offices”, the restriction on the use of appropriations contained in Section 20 is linked to all of the different and unrelated appropriations made to the Department of Workforce Development. Thus, while it is not related to many of the appropriations to which it is attached, if it is a “condition” and not a separate item the Governor would be forced to veto all of the unrelated appropriations to legitimately veto this restriction. The concept of an “item” in an appropriation bill must be interpreted to avoid such a result.45

Although this provision places explicit qualifications and limitations on the use of the appropriated funds, it is overly broad in the appropriated funds to which it is attached. It therefore must be considered to be a rider, and not an item, for item veto analysis purposes. Accordingly, Governor Branstad’s item vetoes of Division I, Section 20 and of Division IV, Section 66, were effective and should be upheld.

Branstad’s office released the following statement today:

“We respectfully disagree with the decision of the District Court. Historically, item veto cases are eventually decided by the Iowa Supreme Court. This is the first step. The item veto is a power given to the governor by our constitution to control spending in appropriation bills. We are studying the ruling and considering next steps.”

State Representatives Dave Jacoby, Kirsten Running-Marquardt, and Bruce Hunter, who were co-plaintiffs in the lawsuit, released this statement:

“Governor Branstad clearly overstepped his authority when he shut down 36 local centers where Iowans go to find a job and we are pleased the court agreed with us. Unfortunately, thousands of Iowans looking for good-paying jobs are still suffering from Governor Branstad’s reckless actions. I hope the Governor takes this ruling to heart and, instead of proclaiming himself to be the ‘sheriff’, is now willing to work with us to strengthen the middle class and put Iowans back to work.”

I assume the governor will appeal this ruling, since Iowa Workforce Development has already shut down 36 of the field offices, and Branstad has highly praised the transition to a wider network of computer terminals for unemployed Iowans to access services online.

Even if higher courts uphold Judge McCall’s decision, the process will take months. It is hard to imagine Iowa Workforce Development reopening the shuttered field offices.

Whatever the outcome of this litigation, today’s court ruling will provide an additional talking point for Democrats who have bashed the Branstad administration’s actions in this area. Many potentially competitive Iowa House and Senate districts include communities that have lost Iowa Workforce Development field offices this year.

P.S. McCall’s decision relies heavily on prior court rulings regarding the item veto power. It’s a good example of why a Republican bill that would have barred judges from using judicial precedent or case law “as a basis for rulings” was one of the stupidest ideas I’ve ever heard from an Iowa legislator. Incidentally, the state representative who introduced that bill, Jason Schultz, may face a former Iowa Workforce Development field office employee in the 2012 general election.

UPDATE: Iowa Senate Democrats welcomed the court ruling with this statement:

DES MOINES (Dec. 8, 2011) – A court decision today overturning Governor Branstad’s veto of a bipartisan effort to keep dozens of local workforce offices open is a victory for tens of thousands of Iowans still looking for a job, two key legislators said today.

“This is a huge victory for Iowans hoping to find a job,” said State Senator Bill Dotzler of Waterloo, a plaintiff on the lawsuit.

“As Iowans were attempting to recover from the worst national recession since World War II, the Governor’s decision to close dozens of local workforce offices could not have come at a worse time,” said State Senator Daryl Beall of Fort Dodge, a plaintiff on the lawsuit. “The Governor has the authority to line-item veto legislation, but he can’t then keep the money. This is a political and policy issue that affects the lives of Iowans, but it’s also a constitutional issue. The Court ruled that the Governor’s veto was unconstitutional.”

Senate File 517 included specific funding to keep open dozens of local workforce offices that help unemployed Iowans find work. The legislation was approved with overwhelming, bipartisan support during the 2011 regular session.  The state workforce offices help Iowans search for jobs, prepare for interviews, improve their skills and help businesses find qualified employees.

Dotzler and Beall pledged to work with the Governor to expedite the reopening of the workforce offices that were illegally closed.

AFSCME Council 61 President Danny Homan called on the Branstad administration to reopen the offices immediately, but the governor’s communications director Tim Albrecht confirmed that the offices will remain closed pending appeal of Judge McCall’s decision.