Can Virginia's Governor accept and spend federal education grant funds without an appropriation from the General Assembly?

Plain-English summary

Delegate Marshall asked three questions about federal Education Jobs Fund money. Could the Governor enter into an agreement with the federal government on minimum funding levels for education? Could federal funds flow into the State treasury and out to localities without an Appropriations Act? And could the Governor accept those funds when no appropriations act authorized the receipt?

The AG worked through the issues in order and produced a layered answer. First, the foundational rule: under Article X, Section 7 of the Virginia Constitution, no money can be paid out of the State treasury except pursuant to an appropriation made by law. Federal grant money received by Virginia counts as "revenues of the Commonwealth," so it falls under that rule.

Second, the General Assembly anticipated this exact situation. The 2010 budget bill, at § 4-104(a)(3), gave the Director, Department of Planning and Budget, standing authority to increase appropriations to any state agency by the amount of donations, gifts, grants, or other non-general funds paid into the treasury beyond existing appropriations, subject to defined constraints. The budget bill expressly contemplates "participation in a federal or sponsored program." So the legislature had already done the work of pre-authorizing this kind of inflow, and the Governor could disburse the federal funds.

Third, on the "assurance" the federal law required the Governor to provide about maintaining FY 2011 spending at FY 2009 levels: the 2011 budget had already been enacted, so whether the Governor could provide the assurance for FY 2011 was a factual question, not a legal one, and the AG declined to answer factual questions in an official opinion. As for future assurances about future fiscal years: the Governor cannot make a legal pledge that binds the General Assembly to future spending. He can make a political commitment to use his best efforts, but he cannot promise the legislature's future actions.

The underlying principle is the separation of powers. Federal law sometimes asks states to make spending guarantees as a condition of receiving funds. In Virginia, the Governor cannot bind the legislature to those guarantees because ultimate authority over the budget rests with the General Assembly.

Currency note

This opinion was issued in 2010. 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.

The biennial budget bills that supplied the standing authority for accepting non-general funds have changed several times since 2010. Each new budget needs to be examined to confirm that the same kind of pre-authorization is in place. The constitutional foundation, however, is stable: an appropriation is still required for any disbursement from the State treasury.

Common questions

What is the "Education Jobs Fund"?
A federal program enacted in 2010 to provide money to states to help maintain employment in education. To receive funds, the Governor had to provide an "assurance" that the state would maintain education funding for state fiscal year 2011 at no less than the support level for state fiscal year 2009.

Why does it matter that federal grant money counts as "revenues of the Commonwealth"?
Because Virginia's Constitution treats all "revenues of the Commonwealth" as flowing through the treasury and out only by appropriation. If federal grants were a separate category not subject to that rule, the Governor could direct them freely. Calling them "revenues" puts them inside the appropriations clause.

Did the Governor actually need a new appropriations act for the Education Jobs Fund money?
No, because the 2010 budget bill at § 4-104(a)(3) already gave the Department of Planning and Budget authority to increase appropriations by the amount of grants flowing into the treasury beyond existing appropriations. So the legislature had pre-authorized the receipt and disbursement of this kind of money.

Can a Virginia Governor sign a federal maintenance-of-effort agreement for future years?
According to this opinion, only as a political commitment, not as a legal pledge. The Governor cannot unilaterally bind the General Assembly's future budget choices because the legislature has ultimate budget authority under the state constitution. Whether such a federal "assurance" amounts to a legal pledge or just a political one depends on how the federal language is read.

Why didn't the AG answer the factual question about whether the Governor could provide the FY 2011 assurance?
Long-standing AG opinion practice is to decline questions that require factual rather than legal determinations. The opinion notes that for many years Attorneys General have concluded that § 2.2-505 (the AG's official-opinion statute) does not contemplate opinions on matters requiring factual determinations.

Background and statutory framework

The Virginia Constitution allocates budget authority across two branches:

• Art. X, § 7. All taxes, licenses, and other revenues are collected and paid into the State treasury. No money is paid out except pursuant to an appropriation made by law, and no appropriation is payable more than two years and six months after the end of the session enacting it.
• Art. IV, § 11. Any bill making an appropriation must pass by an affirmative vote of a majority of all members elected to each house, with recorded vote.

The 2010 biennial budget bill:

• § 4-104(a)(3). Authorized the Director, Department of Planning and Budget, to increase appropriations to any state agency by the amount of donations, gifts, grants, or other non-general funds paid into the treasury in excess of such appropriations during a fiscal year, subject to defined controls.
• The budget bill also expressly contemplated "participation in a federal or sponsored program."

Citations

• Va. Code § 2.2-505
• Va. Const. art. IV, § 11
• Va. Const. art. X, § 7
• 2010 budget bill § 4-104(a)(3)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-082-Marshall.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

October 1, 2010

The Honorable Robert G. Marshall
Member, House of Delegates
Post Office Box 421
Manassas, Virginia 20108-0421

Dear Delegate Marshall:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You ask three interrelated questions concerning recently enacted federal legislation designed, in part, to maintain employment in the education field. You first inquire whether the Governor lawfully can enter into an agreement with the President of the United States, or his cabinet secretary, concerning a minimum level of funding for education. Second, you ask whether federal funds can be deposited in the State treasury and disbursed to localities without an Appropriations Act by the General Assembly. Finally, you ask whether the Governor can accept such funds when no appropriations act authorizes the receipt of such funds.

Response

It is my opinion that an appropriations act is required for the expenditure of revenues of the Commonwealth, including grant funds from the United States government. Where, as here, the General Assembly has provided for the appropriation of such funds, the Governor lawfully may disburse such funds. It is further my opinion that it is a factual question in this instance whether the Governor may provide the "assurance" required by federal law concerning 2011 spending, because the General Assembly has enacted the 2011 budget. Whether the Governor lawfully can accept such funding in the future by providing the required "assurance" of funding levels in subsequent years depends upon whether such a pledge represents a political commitment by the Governor or a legal pledge purporting to bind the General Assembly. The Governor may provide a political pledge to use his best efforts to secure a particular level of funding. The Governor may not, acting on his own, bind the General Assembly to provide future spending.

Background

The United States Congress has enacted a measure designed to provide funds to assist states with their education programs. The bill provides that "the Secretary shall not allocate funds to a State ... unless the Governor ... provides an assurance to the Secretary that ... for State fiscal year 2011" the State will maintain education funding levels at not less than the level of support for education for "state fiscal year 2009."

Applicable Law and Discussion

The Constitution of Virginia contemplates an extensive role for the Governor in the budget process. Ultimate authority over the budget, however, is vested with the General Assembly. The Constitution provides that

[a]ll taxes, licenses, and other revenues of the Commonwealth shall be collected by its proper officers and paid into the State treasury. No money shall be paid out of the State treasury except in pursuance of appropriations made by law; and no such appropriation shall be made which is payable more than two years and six months after the end of the session of the General Assembly at which the law is enacted authorizing the same.

The Constitution further provides that "[n]o bill which ... makes any appropriation of public ... money ... shall be passed except by the affirmative vote of a majority of all the members elected to each house, the name of each member voting and how he voted to be recorded in the journal."

Based on the plain language and historical application of the term "revenues," funds granted by the United States to Virginia would constitute "revenues of the Commonwealth." Therefore, grants received pursuant to this recent federal enactment must be the subject of an appropriation by the General Assembly.

The General Assembly historically has anticipated that certain funds unexpectedly may be received by the Commonwealth. The most recent budget bill specifies in § 4-104(a)(3) that "the Director, Department of Planning and Budget, is hereby authorized to increase the appropriations to any state agency by the amount of the proceeds of donations, gifts, grants or other non-general funds paid into the state treasury in excess of such appropriations during a fiscal year," provided certain strictures are followed. Nothing prevents a state agency, in turn, from disbursing those monies to localities. One area expressly contemplated in the budget bill is "participation in a federal or sponsored program." In this instance, the General Assembly of Virginia has made such an appropriation and, therefore, the Governor lawfully may accept and disburse the funds from the United States.

Finally, you inquire whether the Governor can provide the "assurance" the federal law requires. The federal enactment calls for the Governor to "provide[] an assurance to the Secretary" that for State fiscal year 2011 the State will preserve funding at 2009 levels. In this instance, the 2011 budget has been appropriated by the General Assembly. Therefore, it becomes a factual question whether the governor can provide the required assurance. For many years, Attorneys General have concluded that § 2.2-505, the authorizing statute for official opinions of the Attorney General, does not contemplate that such opinions be rendered on matters requiring factual determinations, as opposed to matters interpreting questions of law.

I note that, independently of the facts of this case, whether the Governor can provide an "assurance" of future funding levels depends upon what the assurance requires. The Governor cannot by making such an "assurance" bind the legislature, a separate branch of Government that is given ultimate authority over the budget. To the extent such an "assurance" constitutes a political rather than a legal pledge by the Governor to engage himself to make his best efforts to maintain education spending at a certain level, the Governor is free to make such a political commitment.

Conclusion

Accordingly, it is my opinion that an appropriations act is required for the expenditure of revenues of the Commonwealth, including grant funds from the United States government. Where, as here, the General Assembly has provided for the appropriation of such funds, the Governor lawfully may disburse such funds. It is further my opinion that it is a factual question in this instance whether the Governor may provide the "assurance" required by federal law concerning 2011 spending, because the General Assembly has enacted the 2011 budget. Whether the Governor lawfully can, in the future, provide an "assurance" of funding levels in subsequent years depends upon whether such a pledge represents a political commitment by the Governor or a legal pledge purporting to bind the General Assembly. The Governor may provide a political pledge to use his best efforts to secure a particular level of funding. The Governor may not, acting on his own, bind the General Assembly to provide future spending.

With warmest regards, I am

Kenneth T. Cuccinelli, II
Attorney General