Can Maryland abolish a state employee's job through the budget process instead of a formal layoff?

Plain-English summary

The Chief Administrative Law Judge asked the Attorney General to explain the legal basis for, and consequences of, the different ways Maryland eliminates state employee positions for budgetary reasons, and specifically whether employees affected by those methods were entitled to the protections of the state layoff statute, Article 64A, §35.

The opinion identified three distinct budget mechanisms that can eliminate the funding for a position: the Governor's decision to leave a position out of the annual budget bill entirely, the General Assembly's decision to strike or reduce an appropriation already in the budget bill, and the Governor's decision, with Board of Public Works approval, to cut an enacted appropriation by up to 25 percent as unnecessary. The opinion concluded that all three are "legislative" acts carrying the force of law under the Budget Amendment to the Maryland Constitution, Article III, §52, so when any of them is linked to a specifically identifiable position, that position is abolished automatically "by operation of law" once the position's funding runs out, and the person who held it has no claim to the layoff statute's notice, seniority, or reassignment protections. The opinion drew a sharp contrast with budget cuts that are not tied to any particular position, for example a general reduction to a program's overall appropriation with no indication which jobs should go: in that situation, an agency retains discretion over how to absorb the cut, and if it decides that eliminating positions is the way to do it, the layoff statute applies to that agency decision. The same is true if an agency reduces its workforce even though no budget mechanism actually removed the position's funding.

Currency note

This opinion was issued in 1991 and construed the Budget Amendment, Article III, §52 of the Maryland Constitution, the layoff statute then codified at Article 64A, §35 of the Maryland Code, and the Board of Public Works reduction authority then codified at SF §7-213 of the State Finance and Procurement Article. The opinion's own editor's note records that the layoff statute was later recodified at Title 11, Subtitle 2 of the State Personnel and Pensions Article, following the Court of Appeals' 1994 decision in Workers' Compensation Comm'n v. Driver confirming that employees whose positions are abolished through budgetary action have no rights under that statute. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis further since 1994. Treat this page as historical context, not current legal advice. Verify the current State Personnel and Pensions Article provisions and current case law before relying on any specific rule described here.

Common questions

If Maryland cuts a specific state job from the budget, does the employee get layoff protections? According to this 1991 opinion, no. The Attorney General concluded that when the Governor, the General Assembly, or the Governor and Board of Public Works eliminate the funding tied to an identifiable position, the position is abolished automatically by operation of law, and the employee holding it does not receive the notice, seniority, or reassignment rights of the layoff statute, Article 64A, §35.

What if the budget cut isn't linked to any specific job? The opinion explained that in that situation, an agency retains discretion over how to absorb the cut, for example by finding savings elsewhere instead of eliminating positions. But if the agency itself then decides to eliminate positions to meet the budget reduction, that agency decision is a layoff subject to Article 64A, §35, unlike a budget action that targets a specific position directly.

Which parts of Maryland government can eliminate a position's funding this way? The opinion identified three mechanisms: the Governor omitting funding for a position from the budget bill as introduced, the General Assembly striking or reducing an appropriation already in the bill, and the Governor together with the Board of Public Works cutting an enacted appropriation by up to 25 percent under SF §7-213 as "unnecessary." The opinion treated all three as legislative acts with the same legal effect on an identifiable position.

Background and statutory framework

The opinion traced the roots of this framework to the 1916 Budget Amendment, Article III, §52 of the Maryland Constitution, which shifted primary control of the state's fiscal plan from the General Assembly to the Governor, requiring the Governor to submit a budget bill that becomes law upon enactment "without further action by the Governor," Article III, §52(5) and (6), while limiting the General Assembly to striking or reducing (not increasing) Executive Branch appropriations, Article III, §52(6) and (8). Because Article III, §52(14) makes the Budget Amendment prevail over other constitutional provisions where there is a conflict, the opinion treated legislation carrying out the amendment, including SF §7-213's authorization for the Governor and Board of Public Works to cut up to 25 percent of an appropriation deemed "unnecessary," as having similar primacy, citing 65 Opinions of the Attorney General 45, 49 (1980).

Working through the case law, the opinion relied on Hopper v. Jones, 178 Md. 429 (1940), where the Court of Appeals held that an employee lost his position "by operation of law" when the General Assembly enacted a budget without funding for it, and on the Fourth Circuit's decision in Baker v. Mayor and City Council of Baltimore, 894 F.2d 679 (4th Cir. 1990), which called "the act of eliminating a position altogether instead of merely terminating the employment of a public employee ... a uniquely legislative function," itself building on City of Baltimore v. AFSCME, 281 Md. 463 (1977), and the Seventh Circuit's characterization of budgetmaking as "a quintessential legislative function" in Rateree v. Rockett, 852 F.2d 946 (7th Cir. 1988). The opinion also discussed Mandel v. O'Hara, 320 Md. 103 (1990), where the Court of Appeals extended legislative immunity to the Governor's budget-related conduct and expressly declined to follow the Fourth Circuit's narrower view in England v. Rockefeller, 729 F.2d 140 (4th Cir. 1984), reasoning that the same legislative character applies whether the position-elimination decision comes from the Governor alone, the General Assembly, or the Governor and Board of Public Works acting together under SF §7-213. The opinion identified the evidentiary "paper trail" for each mechanism (the Department of Budget and Fiscal Planning's Personnel Detail database, the Joint Chairmen's Report, and Board of Public Works agenda items) as the practical way to confirm that a particular position, rather than an unlinked program-wide cut, was the target of a given budget action.

Citations and references

Statutes:

• Article III, §52, the Budget Amendment to the Maryland Constitution governing the state budget process
• Article III, §52(3), giving the Governor authority to develop the budget's "complete plan" of expenditures and revenues
• Article III, §52(11), one of the provisions allowing the Governor to submit a budget with less funding than agencies requested
• Article III, §52(12), the companion provision on balancing the budget
• Article III, §52(5), providing that the budget bill becomes law upon enactment without further gubernatorial action
• Article III, §52(6), limiting the General Assembly to striking or reducing (not increasing) Executive Branch appropriations
• Article III, §52(8), requiring a supplementary appropriation bill with a revenue-raising provision to increase an Executive Branch appropriation
• Article III, §52(13), authorizing legislation to carry out the Budget Amendment
• Article III, §52(14), providing that the Budget Amendment prevails over other constitutional provisions in a conflict
• Article 64A, §35 of the Maryland Code, the state employee layoff statute
• COMAR 06.01.01.44B, the Secretary of Personnel's regulations implementing the layoff statute
• SF §7-213, authorizing the Governor, with Board of Public Works approval, to reduce an Executive Branch appropriation deemed unnecessary
• SF §7-213(b)(3), excepting reductions to salary appropriations governed by the Merit System Law
• SF §7-213(a), the "unnecessary" appropriation standard for a Board of Public Works reduction
• Article 64A, §30(a), authorizing the Secretary of Personnel to adjust pay rates for employee classifications with the Governor's approval
• Chapter 11 of the Laws of Maryland 1985, the Revisor's Note explaining SF §7-213(b)(3)'s relationship to Article 64A, §30(a)
• Article 83A, §3-201, requiring special notice when a Governor's funding omission would close a State facility with at least 50 employees
• SF §7-234(a)(2), barring an agency from paying for a position stripped of its appropriation
• §6-106 of the State Government Article, authorizing units of state government including the Office of Administrative Hearings to seek AG opinions
• SG §9-1605(b), providing that the Office of Administrative Hearings is not bound to follow an AG opinion
• Title 11, Subtitle 2 of the State Personnel and Pensions Article, the later recodification of the layoff statute noted in the opinion's editor's note
• House Bill 110 of 1939, the introduced budget bill discussed regarding the Hopper v. Jones facts
• Chapter 284 of the Laws of Maryland 1939, the enacted budget bill discussed regarding the Hopper v. Jones facts

Cases:

• Hopper v. Jones, 178 Md. 429, 13 A.2d 621 (1940), Maryland Court of Appeals decision holding a position abolished by operation of law when its funding was omitted from an enacted budget
• City of Baltimore v. AFSCME, 281 Md. 463, 374 A.2d 896, 379 A.2d 1031 (1977), Maryland Court of Appeals decision describing Baltimore's Board of Estimates budget submission as part of the law-making function
• Baker v. Mayor and City Council of Baltimore, 894 F.2d 679 (4th Cir. 1990), Fourth Circuit decision holding position elimination through the budget process is a uniquely legislative function entitled to legislative immunity
• Rateree v. Rockett, 852 F.2d 946 (7th Cir. 1988), Seventh Circuit decision characterizing budgetmaking as a quintessential legislative function
• Rateree v. Rockett, 630 F. Supp. 763, 771 (N.D. Ill. 1986), the underlying district court decision quoted by the Seventh Circuit
• Mandel v. O'Hara, 320 Md. 103, 576 A.2d 766 (1990), Maryland Court of Appeals decision extending legislative immunity to the Governor's budget-related conduct
• England v. Rockefeller, 729 F.2d 140 (4th Cir. 1984), Fourth Circuit decision declining to extend legislative immunity to a governor's position-funding decision, which Mandel v. O'Hara declined to follow as Maryland law
• Kelly v. Marylanders for Sports Sanity, 310 Md. 437, 453, 530 A.2d 647 (1987), Maryland Court of Appeals decision cited on the historical allocation of fiscal power before the Budget Amendment
• Maryland Action for Foster Children v. State, 279 Md. 133, 144, 367 A.2d 491 (1977), Maryland Court of Appeals decision describing the Budget Amendment's history and operation
• Bayne v. Secretary of State, 283 Md. 560, 392 A.2d 67 (1978), Maryland Court of Appeals decision on the General Assembly's power to condition, but not legislate through, an appropriation
• Workers' Compensation Comm'n v. Driver, 336 Md. 105, 647 A.2d 96 (1994), Maryland Court of Appeals decision (noted in the opinion's editor's note) confirming employees whose positions are abolished through budgetary action have no rights under the layoff statute

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1991/Volume76_1991.pdf (this opinion appears at printed pages 330-340 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

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

Personnel - Budgetary Administration - Appropriations - Abolishing of Positions for Budgetary or Other Reasons

September 5, 1991

The Honorable John W. Hardwicke
Chief Administrative Law Judge

You have requested our opinion regarding the legal basis for, and the consequences of, the various mechanisms by which State employee positions are abolished for budgetary or other reasons.1

The summary of our opinion is as follows:

Maryland law authorizes three ways by which funds that would have supported positions may be eliminated: by the Governor's decision to omit an appropriation from the annual budget bill; by the General Assembly's decision to strike out or reduce an appropriation that was initially included in the budget bill; and by the Governor's decision, with the approval of the Board of Public Works, to reduce an appropriation included in the budget bill as enacted. All three decisions are legislative in character and all three have the force of law.

Moreover, all have the same effect: If the funds that are cut are linked to identifiable positions - that is, if the materials underlying the budgetary decision designate particular positions for elimination - then

1
As a unit of State government, the Office of Administrative Hearings is entitled to seek advice from the Attorney General. §6-106 of the State Government Article ("SG" Article). This office's policy on opinions recognizes that adjudicatory bodies might seek opinions, and not infrequently they have done so. See, e.g., Opinion No. 89-046 (December 14, 1989) (unpublished) (Office of Administrative Hearings); 74 Opinions of the Attorney General 187 (1989) (Parole Commission); 67 Opinions of the Attorney General 213 (1982) (Commission on Medical Discipline); 61 Opinions of the Attorney General 497 (1976) (Human Relations Commission). Of course, the Office of Administrative Hearings is not bound to follow an opinion of the Attorney General. See SG §9- 1605(b).

those positions are lost by operation of law once any remaining appropriation is exhausted. The employees who hold the positions are not entitled to the rights afforded under the layoff statute, Article 64A,
§35 of the Maryland Code.2

The result is different if funds are cut by any of these three mechanisms but the cuts are not linked to identifiable positions - for example, if the General Assembly reduces appropriations for a program but does not manifest an intention that the cut be directed to particular positions. In that situation, the agency's subsequent decision to reduce its workforce by abolishing positions, albeit necessitated by the budget cut, would invoke the layoff statute.

Finally, if an agency decides to reduce its workforce by abolishing positions even though the funds to support the affected positions have not been deleted from the budget - that is, if none of the three mechanisms has been used - the employees holding the positions are entitled to the protections of Article 64A, §35.

I

The Budget Amendment

Prior to 1916, the power to fix the fiscal policies and determine the course of the fiscal operations of the State was exclusively vested in the General Assembly, subject to a limited veto power of the Governor. See Mandel v. O'Hara, 320 Md. 103, 132, 576 A.2d 766 (1990); Kelly v. Marylanders for Sports Sanity, 310 Md. 437, 453, 530 A.2d 647 (1987); Maryland Action for Foster Children v. State, 279 Md. 133, 144, 367 A.2d 491 (1977).

As a result of voter adoption 75 years ago of the Budget Amendment to the Maryland Constitution, Article III, §52, these roles were reversed to a substantial degree. The Governor was given the power to develop a budget containing "a complete plan" of proposed expenditures and estimated revenues for the fiscal year. Article III, §52(3). With certain well-defined exceptions, the Governor may submit a budget with less funding than agencies requested in order to assure a

2
References to the layoff statute are intended to include the regulations of the Secretary of Personnel implementing the statute. See, e.g., COMAR 06.01.01.44B.

balanced budget. Article III, §52(11) and (12). See Maryland Action for Foster Children v. State, 279 Md. at 150-51. This budget must be introduced as a "bill"; after enactment by the General Assembly, the bill becomes "law" at once, "without further action by the Governor." Article III, §52(5) and (6).

The General Assembly's principal role in the budget enactment process is to strike or reduce Executive Branch appropriations. Article III, §52(6).3 The General Assembly may not increase an Executive Branch appropriation in the budget bill. Article III, §52(6). If the General Assembly wants to increase an Executive Branch appropriation, it may do so only through enactment of a supplementary appropriation bill with a provision to raise the revenue needed to support the expenditure. Article III, §52(8).

Under Article III, §52(14), the Budget Amendment prevails over other provisions of the State Constitution in the event of an inconsistency. Furthermore, legislation enacted by the General Assembly under Article III, §52(13) to carry out the provisions of the Budget Amendment ordinarily would be given primacy over other statutes. See 65 Opinions of the Attorney General 45, 49 (1980) (predecessor to SF §7-213, authorizing Governor to reduce appropriations, supersedes mandatory spending statutes).4

II

Omission of Positions From Governor's Budget

When the Governor decides not to include in the budget funds for an existing position, he is acting pursuant to his constitutional powers under Article III, §52. Applicable caselaw leaves little doubt that such an action is a "legislative" act with the force of law.

3
The General Assembly also has the authority to "condition" an appropriation, although in doing so it may not "legislate" in the budget bill. See Bayne v. Secretary of State, 283 Md. 560, 392 A.2d 67 (1978). See also, e.g., 73 Opinions of the Attorney General 43 (1988); 63 Opinions of the Attorney General 60 (1978).
The Budget Amendment limits the General Assembly's power to reduce certain items of appropriation - for example, the payment of State debt. Article III, §52(6). Conversely, the Budget Amendment grants the General Assembly power to increase certain items of appropriation - specifically, those relating to the Judicial Branch and the General Assembly itself. Id.
4
For a fuller history of the Budget Amendment and description of its operation, see Maryland Action for Foster Children v. State, 279 Md. at 140-152.

In Hopper v. Jones, 178 Md. 429, 13 A.2d 621 (1940), the Court of Appeals held that a State employee was not entitled to layoff rights when the budget bill was enacted by the General Assembly without funding for that employee's particular position. The employee thus lost his position "by operation of law," the Court held. 178 Md. at 433. Although the decision speaks in terms of the Legislature's discontinuing the appropriation, a comparison of the budget bill as introduced in the year in question (House Bill 110 of 1939) with the budget bill as enacted (Chapter 284 of the Laws of Maryland 1939) shows that the position in fact was deleted by the Governor through omission of the funds for the position in the budget bill and not as a result of reduction by the General Assembly.

The factual setting of Hopper suggests that the Governor's abolishing of a position by failing to include funding for it in the budget bill is a legislative act, with the same effect as if the funds were stricken by the General Assembly. Later cases make that suggestion explicit.

In City of Baltimore v. AFSCME, 281 Md. 463, 374 A.2d 896, 379 A.2d 1031 (1977), the Court of Appeals noted that Baltimore City's executive budget system was "in part a model for the State system." 281 Md. at 469 n. 4. In the course of holding that the City's Board of Estimates - the analogue to the Governor in the State budget process - had acted lawfully in not funding certain collectively-bargained pay increments, the Court observed that submission of the City's budget was "an integral and major part of the law-making function":

[U]nder the Baltimore City Charter, the Board of Estimates plays a critical role in the appropriation process. The submission by the Board of Estimates to the City Council of the Ordinance of Estimates is not merely a request or a recommendation for an appropriation of funds. Instead, the Board determines the maximum appropriation for any particular purpose. The Board's submission of the Ordinance of Estimates is, therefore, an integral and major part of the law-making function.

281 Md. at 471.

Relying on the AFSCME case, the U.S. Court of Appeals for the Fourth Circuit later held that the City's Board of Estimates was entitled to legislative immunity from a federal age discrimination claim premised upon its elimination of an agency position. Baker v. Mayor and City Council of Baltimore, 894 F.2d 679 (4th Cir. 1990). The federal panel noted that "[t]he Board's role in the overall budget process persuades us that it is most properly characterized as legislative" and that "[t]he act of eliminating a position altogether instead of merely terminating the employment of a public employee is a uniquely legislative function." 894 F.2d at 682.5

Most recently, in Mandel v. O'Hara, 320 Md. 103, 576 A.2d 766 (1990), the Maryland Court of Appeals indicated that these principles would apply to gubernatorial decisionmaking in preparing the budget. At issue in the case was whether the Governor's actions in connection with the veto of a bill were a legislative function entitled to absolute immunity. In concluding that the Governor enjoyed such immunity, the Court rejected a Fourth Circuit decision, England v. Rockefeller, 729 F.2d 140 (4th Cir. 1984), which held that the Governor of West Virginia's decision not to fund a position was not entitled to legislative immunity in a civil rights action because legislative power in the budget area was divided between the branches. See Mandel v. O'Hara, 320 Md. at 130-32. The Court of Appeals first noted that legislative immunity could be found even in the absence of a full delegation of legislative power. 320 Md. at 131. Then the Court stated that:

In any event, we decline to adopt the
Rockefeller court's limited view of legislative

5
Baker also relied on Rateree v. Rockett, 852 F.2d 946 (7th Cir. 1988), which recognized that budgetmaking is "'a quintessential legislative function.'" 852 F.2d at 950 (quoting Rateree v. Rockett, 630 F. Supp. 763, 771 (N.D. Ill. 1986)). The court specifically noted as follows with respect to the abolishing of positions:
Almost all budget decisions have an effect on employment .... This reality, however, does not transform a uniquely legislative function into an administrative one.... Employment decisions are not administrative when accomplished through traditional legislative functions. They are not "employment decisions" at all but instead, legislative, public policy choices that necessarily impact on the employment policies of the governing body. The political decisionmaking inevitably involved in exercising budgetary restraint strikes at the heart of the legislative process and is protected legislative conduct.
852 F.2d at 950.
immunity as part of Maryland law. This is particularly because of the adverse ramifications that that rule would have on gubernatorial decisionmaking in preparing the executive budget under Maryland Constitution, Art. III, §52.

320 Md. at 132.

These cases provide firm support for an interpretation of the Budget Amendment that follows naturally from its language and history: When the Governor declines to include in the budget funds for a position, he has performed a legislative act with respect to the position that has the force of law when the budget bill is adopted. Moreover, the legal consequence of the Governor's action is that the position will be abolished by operation of law and the incumbent will not be entitled to statutory layoff rights if the particular post is sufficiently identified. See Hopper v. Jones, 178 Md. at 431-32; 75 Opinions of the Attorney General 366 (1990); 24 Opinions of the Attorney General 535, 538 (1939).6

In connection with each year's budget, the Department of Budget and Fiscal Planning transmits to the Department of Fiscal Services a "Personnel Detail," which lists the Position Identification Number ("PIN") for each employee, including those whose positions have been abolished by the Governor's decision not to fund them.7 In our view, these data would provide sufficient evidentiary support that an individual position has been abolished by operation of law when the Governor declined to fund it, and the layoff statute would not apply.8

6
However, if the Governor's omission of funds will result in the closing of a State facility with at least 50 employees, the special notice and other provisions of Article 83A, §3-201 apply.
7
This detail is in a computer database that serves as the General Assembly's primary source for PIN data. In addition to a PIN and classification title, this database discloses that a position has been abolished by indicating funding for "1.00" position for the prior fiscal year but ".00" for the next year. This material is not privileged and is available under the Public Information Act.
8
The Governor can eliminate funding for identifiable positions in other ways - for example, by omitting from the budget bill all funds for a particular program. In this case, the positions that would have been funded within that program are eliminated.

If, on the other hand, the Governor's decision to leave certain funds out of the budget cannot be linked to particular positions, the layoff statute must be followed if the agency affected by this budgetary decision later decides to reduce its staff. See 24 Opinions of the Attorney General at 538.

III

Striking or Reducing of an Appropriation by the General Assembly

Although it exercises only a part of the lawmaking power in the formulation of budget policy, the General Assembly's exercise of its constitutional authority to strike or reduce the appropriation for a position in the budget bill is nevertheless a legislative act having the force of law. See Mandel v. O'Hara, 320 Md. at 130-133. And an individual position eliminated by this means, if clearly identifiable, is also abolished by operation of law effective at the start of the next fiscal year. Hopper v. Jones, 178 Md. at 433.

A written record of such position cuts is found in the Report of the Chairmen of the Senate Budget and Taxation Committee and the House Appropriations Committee, commonly referred to as the Joint Chairmen's Report. The report often lists individual PINs on abolished positions. Sometimes affected positions are identified in other ways - for example, through a statement that an entire program is to be abolished.

The situation is different if the General Assembly cuts funds but does not link those cuts to specifically identified positions. Suppose, for example, that the Governor's budget earmarked $1 million to support the positions in a unit. The General Assembly then cuts the appropriation to $800,000, with no indication in the Joint Chairmen's Report or elsewhere that the General Assembly intended to eliminate particular positions.

Unlike the situation in which specifically identified positions are eliminated, in this example all current positions lawfully could be paid as of the start of the new fiscal year. The budgetary constraint is not that no money be paid to particular positions, but rather that the agency figure out how to save $200,000. The agency is not compelled by law to eliminate any particular positions; perhaps it can achieve the necessary savings through other means. But if it does decide that it must cut positions to meet its budget, the agency must adhere to the layoff statute when doing so. See 24 Opinions of the Attorney General at 538.

IV

Elimination of Positions by Governor and Board of Public Works

SF §7-213 provides yet a third method by which a position may be abolished through the elimination of its funding. With certain exceptions, that statute allows the Governor, with the approval of the Board of Public Works, to reduce by not more than 25 percent any Executive Branch appropriation "that the Governor considers unnecessary."9 As Attorney General Sachs pointed out in an earlier opinion, the General Assembly's choice of language reflects an intention "to leave to the Governor, with the approval of the Board of Public Works, the power to determine whether and to what extent an item of appropriation is needed under the particular circumstances." 65 Opinions of the Attorney General 45, 51 (1980).

In 75 Opinions of the Attorney General 366 (1990), we concluded that this statute could be used to abolish a position as "unnecessary" in light of fiscal constraints and that when such action occurs, the position is lost "by operation of law," just as it would be if the action to eliminate the position were taken in the budget by the Governor or the General Assembly. Because no appropriation would exist for a particular position, we also said that a position abolishment of this type is not subject to the layoff statute.

9
One exception is as follows: "Except as provided in the Merit System Law, the Governor may not reduce an appropriation for the salary of an employee in the classified or unclassified service." SF §7-213(b)(3). The Revisor's Note to this provision explains that it is "based on Art. 64A, §30(a) of the Code, which enables the Secretary of Personnel to increase or decrease pay rates for employees in either service, with the approval of the Governor." Chapter 11 of the Laws of Maryland 1985, Revisor's Note to SF §7-213 (emphasis added). Article 64A, §30(a) authorizes the Secretary of Personnel "at any time to increase or decrease any rates of pay for all employees in the classified and in the unclassified service, and said increased or decreased rates of pay shall, after approval by the Governor, apply to all employees in the classification or classifications so affected, including incumbent employees and new employees." The purpose of the exception in SF §7-213(b)(3), then, is to prohibit use of that section to effect categorical decreases in pay rates affecting every position in an entire classification, deferring to the Secretary of Personnel's authority under Article 64A, §30(a). The exception simply does not apply to the elimination of all funding for particular positions, which has no effect whatever on other positions in the same classification.

The action of the Governor and the Board in abolishing a position for budgetary reasons is no less "legislative" in character than comparable actions by the Governor or the General Assembly in the budget process.10 In Mandel v. O'Hara, the Court of Appeals indicated that legislative power could be delegated to an executive agency and that when the agency exercised the power, it would enjoy legislative immunity. 320 Md. at 131. In the same vein, viewed functionally, the power to eliminate the funding that supports a position is a legislative act no matter which branch of government is taking the action.

This conclusion is fully consistent with the doctrine of separation of powers. See Mandel v. O'Hara, 320 Md. at 129. SF §7-213 is a statute enacted pursuant to the Budget Amendment of the Constitution

• a portion of the Constitution that itself reverses traditional legislative
  and executive roles in the budgetary process and that was intended to prevail over virtually every other constitutional provision. Article III,
  §52(14). See also 72 Opinions of the Attorney General 43, 55 n. 10 (1987) (statutory budget amendment process authorized by Article III,
  §52(13) is itself an appropriation); 65 Opinions of the Attorney General 45, 46 (1980) (predecessor of SF §7-213 is constitutional).

When a position is eliminated under SF §7-213, there is an obvious "paper trail" evidencing the action, including a Board of Public Works agenda item and supporting documents that may include PIN numbers of the abolished positions. See, e.g., Department of Budget and Fiscal Planning Action Agenda General Miscellaneous Item 3-GM (January 2, 1991). A transcript also is maintained of proceedings before the Board of Public Works. Positions abolished between budget cycles are also reported to the Department of Budget and Fiscal Planning and incorporated into the data base furnished the General Assembly. See FY 1992 Operating Budget Instructions at 17 (June 15, 1990).11 Just as with

   10
      The only difference is that SF §7-213(a) imposes a decisional standard

• that a position is "unnecessary" - albeit one that vests broad discretion in the
  Governor. If the Governor selects certain positions to eliminate within a program that is itself to be continued, the Governor necessarily will have made the judgment that those positions, as compared to others, are "unnecessary." SF §7- 213(a). This judgment implies that the positions to be eliminated are different in some salient way from the positions to be retained. The attributes and performance of the employees holding the positions are immaterial and may not be considered.
  11 See note 7 above.

the other types of budget cuts discussed above, identification of the position at issue may be made even without express reference to a PIN if an entire program and its positions were eliminated or if the actual positions affected were otherwise obvious.

V

Layoffs

Prior opinions of this office make it clear that the abolishing of positions, even when done for budgetary reasons, is not exempt from the layoff statute, Article 64A, §35, unless one of the three budgetary mechanisms discussed above has been applied to identifiable positions. See 75 Opinions of the Attorney General 366 (1990); 24 Opinions of the Attorney General 535, 537-38 (1939). For other types of workforce reductions, including positions cut solely through agency discretion in response to a general directive from the Governor or the Secretary of Budget and Fiscal Planning to reduce expenditures, §35 applies.

If the Governor in preparing the budget, or the General Assembly in enacting it, or the Governor and the Board of Public Works in dealing with post-enactment fiscal problems decide to cut funds for a particular position, the agency has no choice: An agency may not pay for a position that has been stripped of its appropriation. SF §7- 234(a)(2). But if the agency retains discretion about the kind of workforce reduction needed to economize or to achieve other agency goals, it must exercise that discretion in accordance with §35.

VI

Conclusion

In summary, it is our opinion that when the funding for a position is eliminated under the direct or delegated authority of Article III, §52 of the Constitution, the action is a legislative act with the force of law. If the funds in question are earmarked for an identifiable position, that position is terminated by operation of law and no layoff subject to Article 64A, §35 has occurred. If, however, the funds being cut are not earmarked for an identifiable position or if a position is being abolished without a corresponding budget cut linked to the position, the action in question is to be treated as a layoff, subject to Article 64A, §35.

J. Joseph Curran, Jr.
Attorney General

Jack Schwartz
Chief Counsel
Opinions & Advice

Editor's Note:

In Workers' Compensation Comm'n v. Driver, 336 Md. 105, 647 A.2d 96 (1994), the Court of Appeals held that employees whose positions were abolished through budgetary action are not entitled to rights under the layoff statute, which is now codified at Title 11, Subtitle 2 of the State Personnel and Pensions Article.