Could Newsom Be Forced to Spend the $28 Million Housing Package?

by Paul Hogarth on June 5, 2007

I took a lot of heat for suggesting that progressives should not run a candidate for Mayor, but what policy goals are not getting accomplished because Newsom is in office? If the Mayor won’t support legislation, progressives can often gather enough votes at the Board of Supervisors to override a veto. But I began to reconsider that position last month after the Board passed a $28 million affordable housing package by an 8-3 vote, only to have the Mayor say that he simply won’t spend the money.

While the Left still doesn’t have a candidate for November, is there a way to get the Mayor’s Office of Housing to spend that money besides throwing Newsom out of office? At the federal level, Presidents Nixon and Reagan were sued – and lost – when they refused to spend money on social programs that Congress had allocated. While the executive branch implements the budget and has a certain level of discretion, is there a legal basis to mandate the spending of appropriated funds?

Rather than veto the $28 million housing package, Newsom let it become law but said he would ignore it. Last week, I asked the City Attorney’s Office if he could get away with that, but I got a vague answer that relied on the basic principle of separation of powers. “The Board of Supervisors adopts ordinances authorizing particular expenditures,” said spokesman Matt Dorsey. “But upon adoption of the ordinance, control of the appropriation passes to the executive [i.e., Mayor] … who has an independent authority to decide how best to promote the public interest when making spending decisions.”

The Mayor may have an independent authority, but I have a hard time believing that he has total discretion about how the money gets spent. After having researched some of the federal cases where Presidents were sued for refusing to spend allocated funds, I believe that housing activists could compel the Mayor to spend the $28 million. But either someone would have to sue the Mayor’s Office to enforce the law, or the Board could pass more stringent legislation that ties the Mayor’s hands in the budget process.

I should emphasize, however, that my legal research was very minimal and preliminary. The only cases I found dealt strictly with federal law and the U.S. Constitution. Possible differences with the California Constitution, state law, the San Francisco Charter, or local codes could be determinative and would have to be taken into account. Therefore, this article should not be taken as legal advice.

While the legislative branch passes the budget to fund various programs, the executive branch is left with the task of carrying it out. Although this leaves the executive with an inherent level of discretion, it is not infallible and has been held accountable in the past.

In Train v. New York, 420 U.S. 35 (1975), the Environmental Protection Agency was sued for not spending $5 billion in federal funds. Congress had passed the Federal Water Pollution Act that provided the money, but Richard Nixon had ordered the E.P.A. not to spend it. “We cannot believe,” said the Supreme Court in its decision, “that Congress scuttled the entire effort by providing the Executive with the seemingly limitless power to withhold funds from allotment or obligation.”

In New Haven v. United States, 809 F.2d 900 (D.C. Cir. 1987), local governments sued the Reagan Administration for not fully funding Section 8 housing, Community Development Block Grants and other federal housing money that Congress had allocated in its 1986 budget. The Reagan Administration said it had the right under federal law to defer the funding for up to a year, but the Court said it was an abuse of discretion.

However, there are some differences between those cases and what happened here. In the Train case, Congress passed a law requiring the E.P.A. to spend money by a certain date – and authorized binding contracts rather than just an appropriation. Here, the Board of Supervisors allocated $28 million for housing projects without much direction besides requiring the Mayor’s Office to keep them updated about how it’s being spent.

At the federal level, the Impoundment Control Act of 1974 ties the President’s hands in the budget process. Passed during the Watergate Era because Richard Nixon had refused to spend more federal funds than any other President, it requires the executive to first get approval from Congress before not spending money that was appropriated. As far as I can tell, there is no equivalent at the local level.

But while every President since Thomas Jefferson has attempted to not spend money that was allocated, the Courts have made a distinction between doing so for “programmatic” reasons rather than “policy” reasons. Not spending the money because it would frustrate the purpose of a law is within the discretion of the executive, but flat-out refusing to spend the money because you disagree with the law is generally prohibited.

In Pennsylvania v. Lynn, 501 F.2d 848 (D.C. Cir. 1974), the Court said it was acceptable for the Nixon Administration to hold up some HUD funds because it was due to concerns about the program’s efficiency – a purpose that was consistent with implementing the law due to its stated intent. This, said the Court, was for “programmatic” reasons and so was under the Administration’s discretion.

But in the New Haven case, Reagan refused to spend HUD money that had been allocated by Congress because he wanted to control the levels of federal spending. This was for “policy” reasons, said the Court, so the funding could not be delayed without approval from Congress.

When Gavin Newsom refused to spend the $28 million on affordable housing, he cited the City’s looming budget deficit and said it was not fiscally prudent. Like Reagan, he refused to spend the money for policy reasons which would not be allowed at the federal level.

As the Supervisors review the Mayor’s Budget this week, they should stand firm and demand that the $28 million appropriated for affordable housing serve its stated policy purpose. The Mayor’s refusal to spend that money when it became law may be illegal, and the Board must not nullify its own vote by letting a new budget go into effect. At the very least, they should consider passing legislation like the one at the federal level that prevents the Mayor from refusing to spend money for policy reasons.

Otherwise, Newsom has set a terrible precedent that undermines our system of checks and balances and renders a veto-proof majority at the Board of Supervisors meaningless.

EDITOR’S NOTE: Paul Hogarth got his law degree from Golden Gate University and is an attorney licensed to practice law in California. This article, however, is not intended as legal advice. Send feedback to

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