Did Maine's new constitutional anti-diversion amendment force the State to restore $73.5 million in MSRS funds that had already been deappropriated earlier in 1991?

Plain-English summary

In July 1991, Maine's Legislature passed P.L. 1991, ch. 591, the General Appropriation Act for FY 1992. Part P amended 5 M.R.S.A. § 17151(2) to require that the annual MSRS appropriation be $73.5 million less than the amount otherwise needed to pay down the system's unfunded liability. The reduction was implemented as two deappropriations: $54,539,996 out of $145,448,217 originally appropriated for teacher retirement contributions, and $18,956,520 from various executive branch personal services accounts for the State employee employer share. P.L. 1991, ch. 591, § P-22. The reduction proportionately cut the monthly transfers from the General Fund into MSRS.

In November 1991, Maine voters approved an amendment to Article IX, § 18 adding this sentence: "Funds appropriated by the Legislature for the Maine State Retirement System are assets of the system and may not be diverted or deappropriated by any subsequent action."

House Majority Leader Dan Gwadosky asked AG Michael Carpenter whether the new amendment required the State to restore the deappropriated funds going forward, by making each remaining monthly transfer at the full Part A amount unreduced by Part P.

The AG answered no. Constitutional amendments, like statutes, are prospective unless there is a clear contrary intent. The Part P deappropriation had already taken effect months before the amendment was ratified. The amendment prohibits "subsequent action" diverting or deappropriating, and Part P was prior action. The reduced monthly transfers therefore could continue lawfully for the rest of FY 1992.

Currency note

This opinion was issued in 1991. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What does "deappropriation" mean?

It means the Legislature has reduced or eliminated money that was previously appropriated. If the Legislature appropriates $100 to a fund in May and then deappropriates $30 in July, the net appropriation is $70.

Why did the AG say the amendment was prospective only?

Because that is the default rule for constitutional amendments and statutes. Unless there is a manifest legislative intention to apply the change retroactively, the change applies only to actions taken after its effective date. The amendment here said "may not be diverted or deappropriated by any subsequent action," confirming that the rule looked forward.

What about the future monthly transfers? Weren't those subsequent actions?

The AG treated the monthly transfers as the implementation of the already-completed Part P deappropriation, not as new "subsequent actions." The reduction had been baked into the FY 1992 appropriation in July 1991. Each monthly transfer just delivered the reduced amount.

Did the amendment matter at all?

Yes, for future deappropriations. The whole point of the November 1991 vote was to keep the Legislature from raiding MSRS appropriations going forward. The AG was just saying it did not unwind the 1991 budget retroactively.

Background and statutory framework

The November 1991 amendment added a new sentence to Article IX, § 18 of the Maine Constitution. As quoted in the opinion, it provides that funds appropriated by the Legislature for the Maine State Retirement System are assets of the system and may not be diverted or deappropriated by any subsequent action. The opinion read that sentence as an anti-diversion and anti-deappropriation rule directed at the Legislature's own future actions.

Part P of P.L. 1991, ch. 591 changed § 17151(2) of the MSRS statutes to require the FY 1992 appropriation to be $73.5 million less than otherwise needed for the unfunded liability, with the shortfall (plus the balance of unfunded liability on July 1, 1993) to be placed on a 27-year amortization schedule.

The general rule on prospective effect of constitutional amendments: 16 Am. Jur. 2d, Constitutional Law § 65; 16 C.J.S., Constitutional Law § 36a.

Source

• Landing page: https://www.maine.gov/legis/lawlib/lldl/agops/agops.htm
• Original PDF: https://lldc.mainelegislature.org/Open/AG/Opinions/1991/ag_19911119.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain. The linked PDF is authoritative.

MICHAEL E. CARPENTER, ATTORNEY GENERAL
STATE OF MAINE
DEPARTMENT OF THE ATTORNEY GENERAL
STATE HOUSE STATION 6
AUGUSTA, MAINE 04333

November 19, 1991

Honorable Dan A. Gwadosky
House Majority Leader
Maine House of Representatives
State House Station #2
Augusta, ME 04333

Dear Representative Gwadosky:

You have inquired whether the recent amendment to Article IX, Section 18 of the Maine Constitution relating to appropriations by the Legislature for the Maine State Retirement System applies to funds deappropriated to the System for Fiscal Year 1992 as part of the general appropriations statute for that period. For the reasons which follow, it is the Opinion of this Department that the constitutional amendment does not apply to that particular legislative action, and that the transfers from the General Fund to the Maine State Retirement System for the remainder of Fiscal Year 1992 may continue to reflect that action.

The constitutional amendment which was approved by the electorate on November 5, 1991, and will enter into force shortly, provides:

Funds appropriated by the Legislature for the Maine State Retirement System are assets of the system and may not be diverted or deappropriated by any subsequent action.

Your question concerns the effect of this new constitutional provision on an action of the Legislature in its General Appropriation Act for Fiscal Year 1992, P.L. 1991, ch. 591, effective July 17, 1991. In that Act, the Legislature amended Section 17151(2) of the laws relating to the Maine State Retirement System, 5 M.R.S.A. § 17001 et seq. to provide

that for fiscal years 1991-92 the annual appropriation must be $73,500,000 less than the amount that would otherwise be applied toward the unfunded liability of the system. It is the intent of the Legislature that the amount of reduction, together with the balance of the unfunded liability in the retirement system on July 1, 1993, must be placed on a 27-year amortization schedule.

P.L. 1991, ch. 591, § P-1.

This objective was accomplished in the Appropriations Act through two separate deappropriations. First, the Act deappropriated $54,539,996 from $145,448,217 appropriated in Part A of the Act for the retirement of teachers. Second, it made an undifferentiated deappropriation of $18,956,520 from the Personal Services appropriations for all executive departments and agencies in Part A, an amount intended to relate to the employer's share of contributions to be made to the Maine State Retirement System for the retirement of State General Fund employees. P.L. 1991, ch. 591, § P-22.

The effect of these deappropriations was to reduce proportionately the amount of money transferred on a monthly basis from the General Fund to the Maine State Retirement System as the employer's share of contributions to the System for the retirement of teachers and State employees. These reduced contributions, absent further legislative action, will continue for the remainder of Fiscal Year 1992. The question which you raise is whether the entry into force of the constitutional amendment requires that transfers made to the Retirement System subsequent to the amendment's effective date be for the full amounts reflected in Part A of the Appropriations Act, unreduced as a result of the deappropriations mandated by Part P.

In the opinion of this Department, the restoration of such deappropriated funds is not required by the new amendment to Article IX, Section 18 of the Maine Constitution. The terms of the new amendment, quoted above, provide that once funds are appropriated by the Legislature for the Maine State Retirement System, they may not be diverted or deappropriated by subsequent action. The prohibition, therefore, is on legislative action occurring subsequent to the appropriation of funds. The deappropriation action here, contained in Part P of the Appropriations Act had already occurred by the time the constitutional amendment entered into force. Since, like statutes, constitutional amendments must be regarded as being prospective in effect only unless there is a manifest legislative intention to the contrary, 16 Am. Jr. 2d, Constitutional Law § 65; 16 C.J.S., Constitutional Law § 36a, there is no basis for the invalidation of the continuing legal effect of Part P on the strength of the new constitutional amendment. Consequently, the deappropriations contained in that Part for the Retirement System may constitutionally continue in effect for the remainder of the fiscal year.

I hope the foregoing answers your question. Please feel free to reinquire if further clarification is necessary.

Sincerely,
MICHAEL E. CARPENTER
Attorney General