After lengthy delay, ruling likely soon on MoDOT authority over state road fund

The money, from the state road fund, would mean significant raises for thousands of employees in the Department of Transportation. The question Circuit Judge Cotton Walker must answer is whether the Highways and Transportation Commission can spend it when lawmakers didn’t appropriate it.

Walker held a one-day trial in the case in February 2022 and told attorneys at a hearing Thursday that he held the decision while awaiting a Missouri Supreme Court ruling on a similar case involving the Department of Conservation.

That decision, upholding the Conservation Commission’s authority over the use of appropriated funds against legislative efforts to limit it, was issued in June. 

“I was a little bit damned if I do, damned if I don’t if I decided this while they had the other one under consideration,” Walker said Thursday afternoon.

Walker gave the attorneys until Oct. 27 to file final suggestions for his ruling. 

“I know everyone’s anxious, so I’ll get to it as soon after the 27th as possible,” Walker said.

The case began when Commissioner of Administration Ken Zellers in October 2021 refused to issue increased paychecks to MoDOT employees authorized by the highways commission as part of a “market adjustment” plan to stem turnover. The raises exceeded the amounts set aside by lawmakers for department pay and benefits.

The highways commission sued, arguing that constitutional language that money in the road fund shall “stand appropriated” for use by the commission meant Zellers must allow spending that did not exceed the fund’s balance.

Attorney Jim Layton, representing the highways commission, argued Thursday that all seven Supreme Court judges recognized a difference between the language governing the road fund and the provisions controlling the conservation fund. 

The court found that the Conservation Department cannot spend more than lawmakers appropriated, even if there is a resulting surplus in the fund. But lawmakers cannot limit how appropriated funds are spent on authorized uses, such as purchasing land.

The majority decision, and the dissent, used the “stand appropriated” language to show there are times when the constitution takes appropriation authority away from lawmakers, Layton said.

“In our view, that’s the end of the analysis,” he said.

Assistant Attorney General Emily Dodge argued in February 2022 that the “stand appropriated” provision only applies to the department’s debt from bonds issued for road construction. On Thursday, she cited another provision that no state money can be spent except “in accordance with an appropriation made by law.”

That means in an appropriation bill passed by lawmakers, she said.

“The decision in the conservation case that the Missouri Supreme Court handed down in June does not change the answer to that question,” Dodge said.

Layton, however, was sure it did.

“The constitution is a law,” he said. “It doesn’t say in the constitution that it has to be done by a bill.”

MoDOT employs approximately 5,000 people in jobs ranging from driving snowplows in winter to engineering complex new road projects. 

The pay plan at issue in the lawsuit was intended to slow turnover after a year where the department lost 600 employees. Turnover accelerated when the pay plan stalled in litigation, department Director Patrick McKenna told a legislative committee in February. 

“Turnover rates rose to a crisis level, with 70 employees leaving per month,”  McKenna said. 

Since the lawsuit was filed, state employees generally have received historically large raises. Lawmakers approved a 5.5% raise during the 2022 session and another 8.7% in this year’s budget. 

The goal of MoDOT’s market adjustment plan is to pay 65% or more of its employees at or above the midpoint in the pay range for their job. Even with the recent raises, only 10.6% of MoDOT employees were at or above the midpoint in fiscal 2023, which ended June 30, state budget documents show.