Can a state constitutional officer pay one employee above the line-item salary cap as long as the total payroll stays within the office's overall appropriation?

Plain-English summary

Arkansas Legislative Audit had reported that 29 Office of the Attorney General employees were paid more than the line-item salary appropriations in Act 47 of 2020. State Senator Jimmy Hickey asked whether a constitutional officer could pay an individual employee above a line-item maximum if the office stayed within its total salary appropriation.

The AG answered no. Article 16, § 4 of the Arkansas Constitution says that no greater salary than the amount fixed by law may be paid to any officer or employee. The opinion emphasizes "any" employee: staying below the office's aggregate cap does not permit paying one person above the maximum for that position. The opinion also cites Arkansas Supreme Court decisions and the Regular Salaries Procedures and Restrictions Act, which applies to constitutional officers even though most are exempt from the Uniform Classification and Compensation Act.

The AG identifies six statutory categories of payments that may exceed an annual salary maximum without being treated as salary under art. 16, § 4, including overtime and certain lump-sum or timing-related payments. The opinion says none applies to the scenario in the request. It does not decide how an agency should handle payments already made or whether any employee must repay money.

What this means for you

Constitutional officers and payroll staff

The opinion says an office cannot use unused room under its total salary appropriation to raise one employee above that employee's line-item maximum. It treats the line-item limit as applying to an individual's pay regardless of whether the funds came through the state treasury or were held by the public employer.

State employees

The opinion concerns what a constitutional officer may pay an employee. It does not decide any employee's liability for an earlier overpayment, future salary adjustment, or repayment obligation.

Legislators and legislative auditors

For the Audit finding described in the request, the AG agreed that staying within the office-wide appropriation does not answer an individual line-item overage. The opinion identifies six statutory exceptions but says none applies to the reported scenario.

Common questions

Can an Arkansas constitutional officer pay one employee over the line-item cap if total payroll remains under budget?
No. The AG concluded that both the constitution and state statutes prohibit that arrangement.

Does the funding source change the cap?
The AG said no. The opinion discusses money in the state treasury as well as cash funds, settlement funds, donations, and federal funds held by a public employer. It concludes that compensation cannot exceed the legislatively set maximum regardless of source.

Does every payment above an annual salary maximum violate the opinion's rule?
The opinion identifies six categories excluded by the Regular Salaries Procedures and Restrictions Act, including overtime, specified departing-employee lump sums, payment-period overlaps, biweekly pay, career-service recognition, and special language in an appropriation bill. It says those categories do not apply to the scenario presented.

Must employees repay amounts already paid above a line-item maximum?
The opinion does not address repayment or any other remedy for past payments. It answers whether the officer may pay above the maximum.

Background and statutory framework

The opinion reads Ark. Const. art. 16, § 4 as giving the General Assembly authority to set the number and salaries of state employees and barring pay above the amount fixed by law for any employee. It cites Mackrell, Abbott, and Gipson for the constitutional analysis. Under the Regular Salaries Procedures and Restrictions Act, A.C.A. § 19-4-1601 limits pay for positions with a legislatively set maximum, and § 19-4-1611 addresses combined state and agency funds. A.C.A. § 19-4-1607(b) lists the six excluded payment categories.

Citations

• Ark. Const. art. 16, § 4 (individual salary limits)
• A.C.A. § 19-4-1601 (maximum pay level)
• A.C.A. § 19-4-1611 (combined funding sources)
• A.C.A. § 19-4-1607(b) (excluded payment categories)
• Dir. of Bureau of Legislative Research v. Mackrell, 212 Ark. 40, 204 S.W.2d 893 (1947)
• Abbott v. Spencer, 302 Ark. 396, 790 S.W.2d 171 (1990)
• Gipson v. Ingram, 215 Ark. 812, 223 S.W.2d 595 (1949)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2023-004
February 15, 2023
The Honorable Jimmy Hickey, Jr.
State Senator
3216 East 35th Street
Texarkana, Arkansas 71854

Dear Senator Hickey:

I am writing in response to your request for an official opinion regarding a finding by Arkansas Legislative Audit. You report that Legislative Audit found that "[t]wenty-nine employees [of the Office of the Attorney General] were paid in excess of the line-item salary appropriation, per Act 47 of 2020" and that this overpayment was "in conflict with Ark. Const. Article 16, § 4." Given this finding, you ask "whether a constitutional officer of the State of Arkansas can compensate an employee in excess of a line-item salary appropriation." And you ask that I "specifically address whether a constitutional officer" may pay an employee more than the line-item appropriation "so long as the constitutional officer does not exceed the office's total appropriation...."

RESPONSE

In my opinion, the answer to your question is "no." The scenario you describe violates Arkansas constitutional and statutory law. When the people of Arkansas ratified our current constitution, they chose to give the General Assembly the sole authority to set the number and salaries for all state employees, both collectively and individually. The alternative view is both contrary to law and leads to the absurd result that a single employee could be paid $1 million more than the employee's line-item maximum as long as the sum of the remaining employees' pay stayed within the constitutional office's aggregate salary cap. This faulty interpretation would give constitutional officers unfettered discretion regarding compensation.

DISCUSSION

My conclusion is supported by art. 16, § 4 of our state constitution, both its text and the related caselaw from the Arkansas Supreme Court. In addition, two Arkansas statutes prevent constitutional officers from exceeding individual line-item maximums. Finally, both the constitutional and statutory limitations have been noted in numerous formal opinions by past Arkansas Attorneys General spanning 50 years, including one in 2017 by my predecessor.

I. The Constitutional Limits on Compensation

The text of art. 16, § 4 of our state constitution prohibits the scenario you describe. The clarity of the text of our constitution has also generated consistent caselaw from the Arkansas Supreme Court and consistent opinions from past Arkansas Attorneys General.

A. The Text of Article 16, Section 4

Article 16, § 4 of the Arkansas Constitution contains three clauses regarding who has authority to set salaries for state officials and employees:

[1] Except as provided in Arkansas Constitution, Article 19, § 31, the General Assembly shall fix the salaries and fees of all officers in the State; and [2] no greater salary or fee than that fixed by law shall be paid to any officer, employee, or other person or at any other rate than par value; and [3] the number and salaries of the clerks and employees of the different departments of the State shall be fixed by law.

The second and third clauses determine the answers to your questions. Clause three requires the General Assembly to "fix by law" the number of state employees and their salaries. Clause two prohibits public employers, including constitutional officers, from compensating "any officer, employee, or person" more than the General Assembly has allowed. These two clauses prevent the scenario your question describes. And clause two's use of the singular (i.e., "any officer, employee, or other person") shows that no single employee may be compensated more than the line-item maximum, regardless of whether the constitutional office stays within its aggregate salary cap.

Therefore, the text of art. 16, § 4 shows that the scenario outlined in your question violates the constitution.

B. Arkansas Supreme Court Caselaw

Several decisions by the Arkansas Supreme Court support the foregoing analysis. The Court has held that the purpose of art. 16, § 4 is "to prevent the expenditure of people's tax money without their consent," which is expressed indirectly through their elected representatives. In addition, the Court has declared that fixing maximum salaries is a separation-of-powers issue:

The Constitution of the State of Arkansas provides for three separate but equal branches of government.... The legislative branch is to fix the amount of salaries. Ark. Const. Art. 16, § 4. One branch of government shall not exercise any power belonging to another branch, except as expressly permitted by the constitution. Ark. Const. Art. 4, § 2.

For purposes of your question, the Court's relevant cases can be divided into two groups depending on the source of the funds that exceeded a given employee's line-item maximum: (1) moneys derived from tax revenue held in the state treasury; or (2) moneys that are held by the public employer and never routed through the state treasury (e.g., cash funds, settlement funds, donations, or federal funds). Under the first scenario, where the employer uses authorized funds in the state treasury, several constitutional provisions prohibit the employer from paying more that the line-item maximum. Under the second scenario, where the source of the excess compensation derives from money held by the public employer, the Court has also said that art. 16, § 4 prevents the employee from being paid more than the line-item maximum.

In summary, the Court has consistently held that, whatever the source of moneys used to compensate a state employee, the compensation cannot exceed the maximum allowed by the General Assembly.

C. Arkansas Attorney General Opinions

My conclusion is also supported by several past opinions from the Office of the Arkansas Attorney General. This office has referenced art. 16, § 4 of the Arkansas Constitution 36 times. None of those opinions supports the view that a constitutional officer has discretion to pay his or her employee more than the maximum set by the General Assembly. And at least six of those opinions expressly state that art. 16, § 4 prevents a public employer from paying more than the line-item maximum salary for a single employee:

• Opinion No. 2017-080: When writing to a state employer that is exempt from the Uniform Class and Compensation Act (which is discussed below), my predecessor noted that the employer could provide pay raises for individual employees as recognition for additional certifications, advanced education, hazardous duty, etc. but not "to such a degree that its employees '[receive] a greater salary than fixed by the Legislature.'"

• Opinion No. 2008-186: Observing that under "Ark. Const. art. 16, § 4," when "the Legislature fixes the maximum annual salary of an employee, then no state agency or institution may" use any funds, whether derived from tax dollars or cash funds, to pay the employee more than the "salary so fixed by the Legislature."

• Opinion No. 2008-118: Concluding that "cash funds" may "not be used to exceed the...applicable appropriation act" that sets the salaries for certain public employees.

• Opinion No. 2008-063: Concluding that, under art. 16, § 4, new state employees in a drug court could not be paid more than the amount set by the General Assembly's appropriation, even though the new employees' salaries would be paid with federal funds.

• Opinion No. 2004-209: Noting that art. 16, § 4 "exclusively authorizes the General Assembly to determine the number of employees of each department and their salaries."

• Opinion No. 1977-053: Concluding that, under the facts of the opinion request, art. 16, § 4 "effectively precludes the payment of overtime to an employee where such payment would cause the total salary to exceed the authorized maximum annual salary for the category or line item position of such an employee...."

Given the clarity of art. 16, § 4's text and relevant caselaw, and the consistent conclusions of my predecessors, it is my opinion that the constitution prohibits the scenario your question describes.

II. The Statutory Limits on Compensation

The scenario you describe also violates Arkansas statutory law. Existing statutes prohibit constitutional officers from paying their employees more than the line-item maximums established by the General Assembly. That same set of statutes also excludes six kinds of payments from the employees' line-item salary caps.

A. The Line-Item Caps

Two sets of statutes, which jointly cover all state employees, prohibit them from being paid more than their individual line-item maximums. While the Uniform Classification and Compensation Act ("UCCA"), codified at A.C.A. § 21-5-201 et seq., expressly prohibits covered employers from paying employees more than the General Assembly has authorized, most constitutional officers are exempt from the UCCA. Nevertheless, constitutional officers are subject to a different statutory scheme, the Regular Salaries Procedures and Restrictions Act ("RSPRA"), that contains the same prohibition.

Under the RSPRA, when "a maximum pay level is set out in dollars" for any state employee in "any position authorized by the General Assembly for the benefit of any department," then "it is the intent of the General Assembly that the position is to be paid at a rate of pay not to exceed the maximum established for the position during any" fiscal year. While the RSPRA allows covered state employees to be paid partly from tax revenues and partly from cash funds, the total payment cannot exceed the individual line-item maximum:

When the General Assembly shall have established by law the maximum annual salaries for certain positions for any state agency and shall have appropriated for those positions, no greater salary than that established by law shall be paid to any person occupying the position....However, the salaries may be paid partly from state-appropriated funds and partly from agency bank funds, but the aggregate of the payments shall not exceed the maximum annual salary rate, where it is established by law.

The foregoing two provisions of the RSPRA, which are entirely independent of the UCCA, indicate that constitutional officers cannot pay employees more than their individual line-item maximums, regardless of whether the office stays under its aggregate salary cap.

B. Payments Excluded from the Caps

Yet the RSPRA also provides for six instances, none of which apply here, in which "remuneration paid to an employee of the state may exceed the maximum annual salary as authorized by the General Assembly." The RSPRA carefully notes that these exceptions "shall not be construed as payment for services or as salary as contemplated by Arkansas Constitution, Article 16, § 4." The six exceptions are: (1) overtime payments; (2) lump-sum payments owed to a departing employee under A.C.A. § 19-4-1613; (3) payment for overlapping payment periods at the end of the fiscal year; (4) payment for biweekly pay periods; (5) payment for career-service recognition under A.C.A. § 21-5-106; and (6) payments "in accordance with special language salary provisions" in a given public employer's appropriation bill. The General Assembly is, of course, free to increase or decrease the number or scope of these exceptions.

Employees who are already at their line-item maximums and who receive any of these six kinds of payments will receive more money during the fiscal year than their line-item caps allow. But since the General Assembly has already foreseen this and excluded these payments from the caps, these additional payments are not considered excess salary and do not violate art. 16, § 4's requirement that the General Assembly set the compensation for all state employees.

Nevertheless, since none of these six kinds of payments apply here, the RSPRA provides an additional, and independent, basis for my conclusion.

III. Conclusion

In conclusion, I have not found any support for the view that constitutional officers have discretion to compensate their employees more than the General Assembly has authorized. Given the text of our state constitution, the Arkansas Supreme Court's jurisprudence, and existing state statutes, I agree with my predecessors that constitutional officers cannot pay an employee more than the maximum set by the General Assembly.

Deputy Attorney General Ryan Owsley prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

1 Ark. Att’y Gen. Op. 2017-080.

2 Ark. Const., art. 16, § 4 (brackets added).

3 Dir. of Bureau of Legislative Research v. Mackrell, 212 Ark. 40, 46, 204 S.W.2d 893, 897 (1947).

4 Abbott v. Spencer, 302 Ark. 396, 398, 790 S.W.2d 171, 172 (1990).

5 Mackrell, 212 Ark. at 44–45, 204 S.W.2d at 896 (quoting art. 5, § 29: “[N]o money shall be drawn from the treasury except in pursuance of specific appropriation made by law….”; art. 16, § 4; and art. 16, § 12: “Except as provided in Arkansas Constitution, Article 19, § 31, no money shall be paid out of the treasury until the same shall have been appropriated by law; and then only in accordance with said appropriation.”).

6 Gipson v. Ingram, 215 Ark. 812, 223 S.W.2d 595 (1949); see also Ark. Att’y Gen. Op. 2008-063 (concluding that under art. 16, § 4, new state employees in a drug court could not be paid more than the amount set by the General Assembly’s appropriation, even though the new employees’ salaries would be paid with federal funds).

7 Ark. Att’y Gen. Ops. 2017-080, 2012-138, 2011-069, 2010-089, 2008-186, 2008-118, 2008-063, 2004-209, 2002-265, 2001-357, 2001-253, 1999-443, 1998-052, 1998-004, 1997-293, 1997-275, 1996-224, 1994-320, 1994-112, 1994-044, 1993-435, 1993-102, 1991-127, 1990-050, 1987-434, 1986-633, 1985-160, 1981-093, 1981-070, 1979-074, 1979-028, 1979-012, 1978-113, 1978-095, 1977-099, 1977-053.

8 Ark. Att’y Gen. Op. 2017-080, p. 5 (quoting Ingram, 215 Ark. at 821, 223 S.W.2d at 600, which is one of the leading cases interpreting art. 16, § 4).

9 Ark. Att’y Gen. Op. 2008-186, at 5, n2 (quoting Gipson v. Ingram, 215 Ark. 812, 821, 223 S.W.2d 595, 600 (1949)) (emphasis added).

10 Ark. Att’y Gen. Op. 2008-118, at 5.

11 Ark. Att’y Gen. Op. 2008-209, at 3 (emphasis added).

12 Ark. Att’y Gen. Op. 1977-053, at 2 (emphasis added).

13 A.C.A. § 21-5-209(b)(1) (Repl. 2022) (“No employee shall be paid at a rate of pay higher than the maximum pay level in the grade assigned to his or her class unless otherwise provided for in this subchapter.”).

14 A.C.A. § 21-5-204(a).

15 A.C.A. § 19-4-1601 (Supp. 2021). The RSPRA is also codified at A.C.A. §§ 21-5-101 et seq. (Repl. 2022).

16 A.C.A. § 19-4-1601(b)(2); see Ark. Att’y Gen. Op. 2017-080, at 5, n19 (noting § 19-4-1601(b)’s limitations on a public employer that is exempt from the UCCA).

17 A.C.A. § 19-4-1611 (Repl. 2016); see also A.C.A. § 19-4-1601(b)(3)(C) (“An employee authorized by the General Assembly shall not receive from appropriated or cash funds, either from state, federal, or other sources, compensation in an amount greater than that established by the General Assembly as the maximum pay level for the employee unless specific provisions are made therefor by law.”).

18 A.C.A. § 19-4-1607(b) (Supp. 2021).

19 Id.