4.1 Types of Legislative Appropriations

Types of Legislative Appropriations

Legislatures utilize several distinct appropriation vehicles to fund public operations, tailored to the operational lifespan and predictability of the underlying activities:

The Continuing Resolution (CR) Mechanics

When Congress or a state legislature fails to enact regular appropriation bills before the start of the new fiscal year (October 1 for the federal government), agencies face a complete lapse in appropriations, leading to a government shutdown. To prevent this, the legislature enacts a Continuing Resolution (CR).

A CR is a stopgap appropriation law with unique operational rules:

• Rate for Operations: Funding is usually pegged to the prior year's enacted level, the current operating rate, or the lower of the House- or Senate-passed appropriation bills.
• Prohibition on "New Starts": Agencies are legally prohibited from initiating new programs, awarding contracts for new projects, or expanding production rates that were not authorized in the prior fiscal year.
• Duration: CRs can range from short-term bridge measures (lasting a few days or weeks) to "full-year" CRs that fund the government through the remainder of the fiscal year.

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Executive Spending Controls & The Impoundment Control Act of 1974

Once an appropriation is signed into law, the executive branch must execute the budget as enacted. However, executive leadership must also ensure orderly cash management and prevent agencies from spending their entire budgets prematurely.

Apportionment and Allotment Systems

Under 31 U.S.C. § 1512, the President delegates apportionment authority to the Office of Management and Budget (OMB). OMB divides enacted budget authority into quarterly or project-based installments (apportionments). Agencies then internally subdivide these funds into allotments granted to operating divisions. These executive devices prevent agencies from exhausting funds early in the fiscal year and running to the legislature for deficiency appropriations.

Executive Impoundment Restrictions

Historically, U.S. Presidents occasionally claimed inherent executive authority to withhold or refuse to spend appropriated funds—a practice known as impoundment. This practice reached a constitutional crisis during the Nixon administration, when the White House impounded billions of dollars appropriated for the Clean Water Act and urban housing programs.

In response, Congress enacted the Impoundment Control Act of 1974 (ICA), which established strict statutory procedures governing any executive withholding of appropriated funds. The ICA distinguishes between two types of executive actions:

1. Rescissions (Permanent Cancellations):

   • A rescission represents an executive proposal to permanently cancel enacted budget authority.
   • The President must transmit a formal rescission message to Congress detailing the proposed cancellation and justification.
   • The executive branch may withhold the funds for a maximum of 45 calendar days of continuous congressional session.
   • If Congress does not pass a statutory rescission bill approving the proposal within those 45 days, the President and executive agencies must immediately release and make the funds available for obligation.

2. Deferrals (Temporary Delays):

   • A deferral is an executive action that temporarily delays the obligation or expenditure of budget authority, or establishes operational reserves.
   • Under the ICA and subsequent judicial decisions (City of New Haven v. United States, 1986), deferrals are legally permissible only for programmatic contingencies, operational efficiencies, or specific statutory justifications.
   • Deferrals for policy reasons are strictly illegal. The executive branch cannot defer funds simply because it disagrees with the programmatic wisdom or policy goals established by the legislature.

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Judicial Impacts on Public Spending

While the legislative branch possesses the formal power of the purse, the judiciary exerts an enormous, often uncontrollable influence on government expenditure budgets. Under the separation of powers doctrine, courts cannot draft appropriation bills; however, judges possess the constitutional authority to review government actions and issue binding remedial orders.

Institutional Reform Litigation and Consent Decrees

Federal and state courts frequently issue structural injunctions and oversee consent decrees in civil rights and constitutional lawsuits involving public institutions:

• Correctional Facilities: In cases alleging Eighth Amendment violations (cruel and unusual punishment), courts have ordered state departments of corrections to remedy severe prison overcrowding, upgrade medical and psychiatric facilities, and dramatically increase correctional staffing levels. These mandates have forced state legislatures to appropriate hundreds of millions of dollars in unexpected capital and operating funds.
• Child Welfare and Foster Care: Federal consent decrees have placed county and state child welfare systems under judicial monitoring, mandating strict caseworker-to-child ratios, modernized case management software, and enhanced foster parent stipends.
• Special Education: Under the Individuals with Disabilities Education Act (IDEA) and the Rehabilitation Act, courts regularly compel local school districts to fund specialized private school placements, intensive therapeutic services, or specialized transportation for students with disabilities.

School Finance Equity and Adequacy Rulings

State supreme courts have fundamentally reshaped state and local fiscal landscapes through school finance litigation. Interpreting state constitutional education clauses (which typically guarantee an "efficient," "thorough," or "adequate" system of free public schools), state high courts have struck down local-property-tax-based school funding systems as unconstitutionally unequal.

In landmark decisions across dozens of states (e.g., Kentucky, New Jersey, New York, Texas, Washington), state courts have ordered legislatures to overhaul their school aid distribution formulas. These judicial mandates have compelled state legislatures to raise state taxes and appropriate billions of dollars in state equalization aid to low-wealth municipal school districts, fundamentally shifting the allocation of state public resources.

Court-Appointed Receivers and Special Masters

When executive agencies persistently fail to comply with judicial consent decrees, courts may appoint independent Special Masters or Receivers with administrative authority to take control of agency operational divisions. These court-appointed officials can dictate procurement specifications, order staffing overhauls, and compel agency executives to redirect existing budget allotments to achieve constitutional compliance, effectively curtailing executive discretion.