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On the powers of the Government in the preparation of a draft state budget

Case No. 49/01

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE OF ARTICLE 39 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE HEALTH SYSTEM, ARTICLES 1, 2 AND 3 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE LONG-TERM FINANCING OF SCIENCE AND EDUCATION, PARAGRAPH 2 OF ARTICLE 18 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE STRUCTURE OF THE BUDGET AND PARAGRAPH 1 OF ARTICLE 172 OF THE STATUTE OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 

11 July 2002

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Egidijus Jarašiūnas, Egidijus Kūris, Kęstutis Lapinskas, Zenonas Namavičius, Jonas Prapiestis, Vytautas Sinkevičius, and Stasys Stačiokas

The court reporter—Daiva Pitrėnaitė

Gintaras Švedas, Vice-minister of Justice, and Rimantas Vaicenavičius, Director of the Fiscal Policy Department of the Ministry of Finance of the Republic of Lithuania, acting as the representatives of the Government of the Republic of Lithuania, the petitioner

Paulius Griciūnas, a senior consultant to the Legal Department of the Office of the Seimas, acting as the representative of the Seimas of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 3 July 2002, in its public hearing, considered case No. 49/01 subsequent to the petition of the Government of the Republic of Lithuania requesting an investigation into whether Article 16 of the Republic of Lithuania’s Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Republic of Lithuania’s Law on the Health System, the Republic of Lithuania’s Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Republic of Lithuania’s Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas of the Republic of Lithuania were in compliance with the striving for a state under the rule of law enshrined in the Preamble to the Constitution of the Republic of Lithuania, and with Article 5, Item 14 of Article 67, Item 4 of Article 94, Article 130 and Paragraph 1 of Article 131 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

I

1. On 22 December 1994, the Seimas enacted the Republic of Lithuania’s Law on the State Regulation of Economic Relations in Agriculture (Official Gazette Valstybės žinios, 1995, No. 1-5).

On 19 July 1994, the Seimas enacted the Republic of Lithuania’s Law on the Health System (Official Gazette Valstybės žinios, 1994, No. 63-1231). On 1 December 1998, the Seimas enacted the Republic of Lithuania’s Law on Amending the Law on the Health System (Official Gazette Valstybės žinios, 1998, No. 112-3099), whereby the Republic of Lithuania’s Law on the Health System was set forth in a new wording.

On 7 December 2000, the Seimas enacted the Republic of Lithuania’s Law on the Long-term Financing of Science and Education (Official Gazette Valstybės žinios, 2000, No. 110-3516).

On 30 July 1990, the Supreme Council of the Republic of Lithuania enacted the Republic of Lithuania’s Law on Budgeting (Official Gazette Valstybės žinios, 1990, No. 24-596). On 11 July 2000, the Seimas enacted the Law on Amending the Law on Budgeting (Official Gazette Valstybės žinios, 2000, No. 61-1826), whereby the title of the law “Republic of Lithuania’s Law on Budgeting” was changed into that of “Republic of Lithuania’s Law on the Structure of the Budget” and set forth this law in a new wording. On 7 June 2001, the Seimas enacted the Republic of Lithuania’s Law on the Amendment and Supplement of Articles 8, 17, 18, 20 and 31 of the Law on the Structure of the Budget (Official Gazette Valstybės žinios, 2001, No. 55-1939), which, inter alia, supplemented Article 18 of the Law on the Structure of the Budget with new Paragraph 2.

On 17 February 1994, the Seimas enacted the Statute of the Seimas of the Republic of Lithuania (Official Gazette Valstybės žinios, 1994, No. 15-249). On 22 December 1998, the Seimas enacted the Statute of the Seimas titled “On the Amendment of the Statute” (Official Gazette Valstybės žinios, 1999, No. 5-97) whereby the Statute of the Seimas was set forth in a new wording. On 7 June 2001, the Seimas adopted the Statute of the Seimas titled “On the Amendment and Supplementation of Articles 31, 32, 36, 172, 177 and 178 of the Statute of the Seimas” (Official Gazette Valstybės žinios, 2001, No. 50-1748) whereby, inter alia, Article 172 of the Statute of the Seimas was supplemented with new Paragraph 1.

2. The Government of the Republic of Lithuania, the petitioner, requests the Constitutional Court to investigate whether Article 16 of the Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas were in compliance with the striving for a state under the rule of law enshrined in the Preamble to the Constitution, and with Article 5, Item 14 of Article 67 and Item 4 of Article 94, Article 130 and Paragraph 1 of Article 131 of the Constitution.

II

The petition of the petitioner is based on the following arguments.

1. Article 16 of the Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education obligate the Government to include appropriations of established amount (expressed in proportional portions) into the draft budget for regulation of agriculture, to finance the health system and to finance science, studies and education respectively. Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas obligate the Government to include the amounts of appropriations for the Office of the Seimas which have been established by the Board of the Seimas. The petitioner maintains that such legal regulation imposes a limitation on the constitutional powers of the Government to independently prepare a draft budget of the state, violates the constitutional principle of the separation of powers and the striving for a state under the rule of law enshrined in the Constitution.

2. In the opinion of the petitioner, under the Constitution, in the process of the forming, approval and execution of the draft budget of the state the powers of the Seimas and the Government are separated. The preparation of the draft budget of the state and submitting it to the Seimas, the execution of the state budget and submitting to the Seimas an account of the execution of the budget are categorised as falling within the competence of the Government. The Seimas considers the draft budget of the state, approves it and supervises its execution. Article 94 of the Constitution provides that the Government shall prepare a draft budget of the State. This provision means that the Constitution directly grants powers to the Government to prepare a draft budget of the State. These powers may not be changed or limited by law. In the opinion of the petitioner, the Seimas should not limit, by means of concrete indicators set in advance, the powers of the Government to prepare a draft budget of the State at its discretion.

3. The petitioner maintains that the establishment of the financial indicators expressed in proportional portions of the gross domestic product or of the national budget contradicts the principle of effective distribution and use of public revenues. If concrete financing indicators are set in advance to finance particular state functions, a respective portion of appropriations from the budget of the state will be allocated to concrete areas (science and studies, health system, agriculture) without taking account of the need to estimate the financing of other state functions and programmes. Thus, the opportunity is lost to provide for sufficient financing from the budget of the state for other areas.

4. In the opinion of the petitioner, the annual approval of the budget should mean the duty of the legislation to take account of the factual situation of the economy of this country. Should the number of laws establishing the financing of individual branches of economy or programmes increase, the annual approval of the budget would lose its sense. The petitioner maintains that the Constitution provides for the annual approval of the budget of the state, therefore, the budget ought to be annually prepared while taking account of the actual situation of the economy of this country, concrete economic indicators and priorities of the state. In the opinion of the petitioner, the set in advance financing indicators for individual programmes and state functions are not in line with the principle of the annual preparation and approval of the budget which is entrenched in the Constitution.

5. The petitioner maintains that Article 16 of the Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in conflict with the striving for a state under the rule of law enshrined in the Preamble to the Constitution, Article 5, Item 14 of Article 67, Item 4 of Article 94, Article 130 and Paragraph 1 of Article 131 of the Constitution.

III

In the course of the preparation of the case for the Constitutional Court hearing, written explanations were received from the representatives of the Seimas, the party concerned, who were S. Kaplerienė, a senior consultant to the Legal Department of the Office of the Seimas, and P. Griciūnas, a senior consultant to the Legal Department of the Office of the Seimas.

1. It is maintained in the explanations that by the Law on the State Regulation of Economic Relations in Agriculture one attempts to restructure the agriculture, to increase its competitiveness, to solve the social and economic problems of the agricultural sector; by the Law on the Health System one attempts to ensure the security of public health, to guarantee the right of individuals to free medical service; by the Law on the Long-term Financing of Science and Education, while taking account of the importance of science, one seeks the public welfare and state stability. The social objectives entrenched in the Constitution are subject to change. To implement these objectives funds are necessary. However, not all social objectives of the state are of equal importance. In the opinion of the representatives of the party concerned, the Seimas has the constitutional right to decide which state social functions are the most important. The are no opportunities to allocate sufficient funds during one budgetary year to finance the state regulatory measures for economic relations in agriculture, health system, science and education. The Seimas enacted the Law on the State Regulation of Economic Relations in Agriculture, the Law on the Health System, the Law on the Long-term Financing of Science and Education which enable to ensure the succession of the relations of the budget of the state in various budgetary years as well as the continuity of financing. Adopting these laws, the Seimas implemented its financial competence and declared the state priorities.

2. The representatives of the party concerned maintain that in the Law on the State Regulation of Economic Relations in Agriculture, the Law on the Health System, the Law on the Long-term Financing of Science and Education the amount of the appropriations is not expressed in a concrete sum. It is expressed in a proportional portion of the gross domestic product, therefore, these laws of their own accord take account of the existing social and economic situation, needs and possibilities of the state and society, available or potential financial resources, state liabilities and other important factors. The laws provide for the expenses for concretely defined and generally important objectives, to attain which more funds are necessary than it is possible to allocate during one budgetary year.

3. In the opinion of the representatives of the party concerned, the Constitution does not provide for any limitations for the Seimas on amending the budget or changing the priorities of budgetary expenditures, therefore, while adopting the Law on the State Regulation of Economic Relations in Agriculture, the Law on the Health System, the Law on the Long-term Financing of Science and Education, the Seimas was implementing its constitutional competence and neither limited nor denied the powers of the Government to prepare and submit to the Seimas the draft budget of the state.

4. The representatives of the party concerned maintain that one of the most important conditions of the independence of the parliament is the financial independence of the parliament from the executive. The material basis must be created for the implementation of the competence of the Seimas provided for in the Constitution. The Office of the Seimas helps the Seimas members to properly exercise their constitutional functions. In the absence of the guarantee that sufficient funds will be allocated for the implementation of the functions of the Office of the Seimas, it would mean that the Seimas, as the legislative power, is dependent on the executive. Paragraph 1 of Article 172 of the Statute of the Seimas guarantees the independence of the Seimas as the legislative power from the executive. Alongside, the constitutional principle of the separation of powers is ensured.

5. According to the representatives of the party concerned, Article 16 of the Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with the Constitution.

IV

At the Constitutional Court hearing, the representatives of the petitioner who were G. Švedas, Vice-minister of Justice, and R. Vaicenavičius, Director of the Fiscal Policy Department of the Ministry of Finance, virtually reiterated the arguments set forth in the petition.

2. At the Constitutional Court hearing, the representatives of the party concerned P. Griciūnas, a senior consultant to the Legal Department of the Office of the Seimas, virtually reiterated the arguments set forth in the written explanations.

The Constitutional Court

holds that:

I

1. The petitioner requests the Constitutional Court to investigate whether Article 16 of the Law on the State Regulation of Economic Relations in Agriculture, Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with the striving for a state under the rule of law enshrined in the Preamble to the Constitution, Article 5, Item 14 of Article 67 and Item 4 of Article 94, Article 130 and Paragraph 1 of Article 131 of the Constitution.

2. The Constitutional Court received the petition of the petitioner requesting an investigation into the compliance of Article 16 of the Law on the State Regulation of Economic Relations in Agriculture with the Constitution on 9 November 2001.

The Constitutional Court, having previously considered a petition received from another petitioner, a group of Seimas members, requesting an investigation into the compliance of the Law on Approving the Financial Indicators of the 2001 State Budget and Municipal Budgets, the Law on the Approval of Indicators Determining the Amount and Levelling of Revenues of Municipal Budgets for 2001, 2002 and 2003 with the Constitution, through its ruling of 14 January 2002, recognised that Article 16 of the Law on the State Regulation of Economic Relations in Agriculture conflicted with Article 129 of the Constitution and the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended.

Under Item 3 of Paragraph 1 of Article 69 of the Law on the Constitutional Court, by means of its decision, the Constitutional Court shall refuse to consider petitions for the examination of the constitutionality of a legal act if the constitutionality of the act indicated in the petition has already been investigated by the Constitutional Court and the resolution on this issue adopted by the Constitutional Court is still in force.

Paragraph 3 of Article 69 of the Law on the Constitutional Court specifies that in the event that the grounds for refusal to consider a petition have been established after the initiation of the examination of the case during the session of the Constitutional Court, a decision to dismiss the case shall be adopted.

Conforming to Item 3 of Paragraph 1 of Article 69 and Paragraph 3 of Article 69 of the Law on the Constitutional Court, the case in the part concerning the compliance of Article 16 of the Law on the State Regulation of Economic Relations in Agriculture with the Constitution must be dismissed.

3. The petitioner requests an investigation into whether the Law on the Long-term Financing of Science and Education is in compliance with the Constitution, however, it is clear from the reasoning of the petition that the petitioner does not doubt as to the compliance of the entire said law with the Constitution, but only as to the compliance of Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this Law” of Article 3 of the same law with the Constitution.

4. The petitioner requests an investigation into whether Paragraph 1 of Article 172 of the Statute of the Seimas is in compliance with the Constitution. Paragraph 1 of Article 172 of the Statute of the Seimas reads: “The draft budget of the State shall be prepared under procedure established in the Republic of Lithuania’s Law on the Structure of the Budget. The Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates.”

Although the petitioner requests an investigation into whether Paragraph 1 of Article 172 of the Statute of the Seimas is in compliance with the Constitution, however, it is clear from the reasoning of the petition that the petitioner does not doubt as to the compliance of entire Paragraph 1 of Article 172 of the Statute of the Seimas with the Constitution, but only as to the compliance of the provision of Paragraph 1 of Article 172 of the Statute of the Seimas that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates with the Constitution.

5. The petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with Item 14 of Article 67 of the Constitution.

Under Item 14 of Article 67 of the Constitution, the Seimas shall approve the state budget and supervise the implementation thereof.

Even though the petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with Item 14 of Article 67 of the Constitution, however, it is clear the reasoning of the petition that the petitioner does not doubt as to the compliance of these laws and the impugned provisions of the Statute of the Seimas with entire Item 14 of Article 67 of the Constitution, but only as to the provision of the said item that the Seimas shall approve the state budget.

6. The petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with Item 4 of Article 94 of the Constitution.

Under Item 4 of Article 94 of the Constitution, the Government shall prepare a draft budget of the state and submit it to the Seimas; execute the State Budget and report on the fulfilment of the budget to the Seimas.

Even though the petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with entire Item 14 of Article 67 of the Constitution, however, it is clear from the reasoning of the petition that the petitioner doubts as to the compliance of the impugned provisions of these laws and the Statute of the Seimas with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare a draft budget of the state.

7. The petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with Article 130 of the Constitution.

Article 130 of the Constitution provides: “The Government of the Republic of Lithuania shall prepare a draft budget of the State, and shall submit it to the Seimas not later than 75 days before the end of the budget year.”

Even though the petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with entire Article 130 of the Constitution, however, it is clear from the reasoning of the petition that the petitioner doubts as to the compliance of the impugned provisions of these laws and the Statute of the Seimas with the provision of Article 130 of the Constitution that the Government shall prepare a draft budget of the state.

8. The petitioner requests the Constitutional Court to investigate whether Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with the striving for a state under the rule of law enshrined in the Preamble to the Constitution.

The Constitution shall be an integral and directly applicable statute (Paragraph 1 of Article 6 of the Constitution). The Preamble to the Constitution proclaims the striving for an open, just, and harmonious civil society and state under the rule of law.

The values and strivings enshrined in the Constitution are expressed in the constitutional norms and principles. The striving for a state under the rule of law should be interpreted together with the other provisions of the Constitution which entrench the principle of a state under the rule of law. The striving for a state under the rule of law is expressed by the constitutional principle of a state under the rule of law, therefore, subsequent to the petition of the petitioner, the Constitutional Court will consider the compliance of the impugned provisions of the laws pointed out by the petitioner and the Statute of the Seimas with the constitutional principle of a state under the rule of law.

9. Subsequent to the petition of the petitioner, the Constitutional Court will consider whether Article 39 of the Law on the Health System, Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the provision of Paragraph 1 of Article 172 of the Statute of the Seimas that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates are in compliance with Article 5 of the Constitution, the provision of Item 14 of Article 67 thereof that the Seimas shall approve the state budget, the provision of Item 4 of Article 94 thereof that the Government shall prepare a draft budget of the state, the provision of Article 130 thereof that the Government shall prepare a draft budget of the state, Paragraph 1 of Article 131 thereof and the constitutional principle of a state under the rule of law.

In the case at issue the impugned provisions of the laws pointed out by the petitioner and those of the Statute of the Seimas will be considered from the aspect indicated by the petitioner: whether the impugned provisions do not limit the constitutional powers of the Government to prepare the draft budget of the state.

II

1. The doubts of the petitioner concerning the compliance of Article 39 of the Law on the Health System, the Law on the Long-term Financing of Science and Education, Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas with the Constitution are based on the fact that, in the opinion of the petitioner, the impugned provisions of the said laws and the Statute of the Seimas limit the constitutional powers of the Government to independently prepare the draft budget of the state.

2. While considering whether the impugned provisions of the laws pointed out by the petitioner and of the Statute of the Seimas are in compliance with the Constitution, one must, first of all, ascertain as to what powers for the Government in the area of the preparation of the draft budget of the state are established in the Constitution.

2.1. Under Item 4 of Article 94 of the Constitution, the Government shall prepare a draft budget of the state. Article 130 of the Constitution provides that the Government shall prepare a draft budget of the State, and shall submit it to the Seimas.

Paragraph 2 of Article 132 of the Constitution specifies that during the budget year the Seimas may change the budget and that it shall be changed according to the same procedure by which it was drafted, adopted and approved. This constitutional provision also means that the constitutional powers to prepare the draft amendment to the budget of the state are established for the Government.

It needs to be noted that the Constitution does not contain any legal norms establishing that a draft budget of the state may be prepared and submitted to the Seimas for consideration and approval by not the Government but another state institution or another entity.

Thus, the Constitution establishes the powers to prepare the draft budget of the state for the Government only.

2.2. The constitutional provision that only the Government enjoys the powers to prepare the draft budget of the state means that only the Government and no one else has the powers to estimate, in the draft budget of the state, how much revenues will be received and from which sources, how much funds and for what purposes must be appropriated etc. While estimating for the state expenses in the draft budget of the state, the Government is bound by the imperative of an open, just and harmonious civil society, the constitutional principle of the separation of powers as well as other constitutional norms and principles.

It needs to be noted that the constitutional imperative of an open, just and harmonious civil society, the necessity to ensure the constitutional rights and freedoms of persons and to protect the other values entrenched in the Constitution imply the duty of the Government, in the course of the preparation of the draft budget of the state, to take account of the state functions established in the Constitution, the existing economic and social situation, the needs and possibilities of society and the state, the available and potential financial resources as well as state liabilities, as well as other important factors.

A duty of the Government to provide for the necessary funds so that the state institutions that exercise state authority, i.e. the Seimas, the President of the Republic, the Government, the Judiciary, would be guaranteed the independence, that the balance of powers might be ensured, and that the said institutions might perform the functions established for them in the Constitution and laws stems from Article 5 of the Constitution and other constitutional articles which establish the powers of state institutions exercising state authority and which establish the principle of the separation of powers.

The Government, while preparing the draft budget of the state, must take account of the amounts of appropriations from the state budget, which have been presented from the other institutions, pointed out in Paragraph 1 of Article 5 of the Constitution, exercising state authority, i.e. from the Seimas, the President of the Republic, the Judiciary, and which are needed to perform the functions of these institutions established in the Constitution and laws. The pre-conditions for violating the constitutional principle of the separation of powers and Article 5 of the Constitution would be created, if the draft budget of the state prepared by the Government provided for considerably less appropriations for the Seimas, the President of the Republic, the Judiciary than they are needed so that the institutions exercising state authority might perform the functions established for them in the Constitution and laws and that the independence of these state institutions exercising state authority, the balance of powers, and their independence from the Government as an institution of the executive would be guaranteed.

The Government shall implement laws (Item 2 of Article 94 of the Constitution). From the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as these laws are not amended, a duty arises for the Government, in the course of the preparation of the draft budget of the state, to estimate the expenditures that are provided in the said laws (the Constitutional Court’s ruling of 14 January 2002).

2.3. The Constitutional Court, while construing the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as these laws are not amended, held that the laws specified in Paragraph 2 of Article 131 of the Constitution that provide for certain expenditures are not laws that would substitute for or change the law on the state budget. Such laws can only provide for expenditures necessary in order to achieve a defined, generally important goal over a certain period of time established by law, provided these needs cannot be satisfied in one budget year. Such laws may not provide for funds necessary for the execution of routine functions of the state, for funds necessary to finance every-day needs of society, such laws may not regulate the relations, which, under the Constitution, may be regulated by the law on the state budget only. In the same ruling, the Constitutional Court emphasised that laws providing for certain expenditures cannot establish such legal regulation that would deny the Government’s constitutional powers to form the state budget for the budget year and the Seimas’ constitutional powers to approve the state budget for the budget year specifically. Otherwise, the constitutional concept of the budget year would be distorted, the constitutional institute of the budget year would lose its sense, the constitutional powers of the Government to prepare the draft budget of the state and the constitutional powers of the Seimas to approve the state budget for the budget year, while taking into consideration the existing social and economic situation, the needs and possibilities of society and the state, the available or potential financial resources and the liabilities of the state, as well as other important factors, would be denied.

3. The petitioner doubts whether the impugned provisions of the laws and of the Statute of the Seimas are in compliance with Article 5 of the Constitution.

Article 5 of the Constitution provides:

In Lithuania, the powers of the State shall be exercised by the Seimas, the President of the Republic and the Government, and the Judiciary.

The scope of powers shall be defined by the Constitution.

State institutions shall serve the people.”

The Constitutional Court has held in its rulings more than once that this article of the Constitution, as well as the other constitutional articles providing for the powers of the state institutions exercising state authority, establishes the principle of the separation of powers. Under the Constitution, the legislative, executive and judicial branches of power must be separated, sufficiently independent, however, there must be a balance among them. Each state institution is granted its purpose-consistent competence the concrete content of which depends on the place of that branch of state power in the overall system of branches of power as well as its relation to the other branches of power. Since the Constitution directly establishes the powers of each particular institution, one institution may not take over the functions of another, it may not transfer or waive them, and these powers may not be changed or limited by law.

In its ruling of 14 January 2002, the Constitutional Court held that the constitutional concept of the state budget implies a presumption that the drafting (forming) of the state budget, its consideration in the Seimas and its approval by law, as well as its implementation, are separate steps of the budgetary process. It was also held in the same ruling that while drafting the state budget as well as while considering and approving it, the powers of the Seimas as a legislative body and the powers of the Government as an executive body are separated; the constitutional principle of the separation of powers has to be ensured in this area.

In the context of the case at issue, it needs to be noted that, under the Constitution, the Seimas may not establish any legal regulation limiting or denying the powers of the Government established in the Constitution to prepare the draft budget of the state. If a law denied or limited the powers established in the Constitution for the Government to prepare the draft budget of the state, the constitutional principle of the separation of powers would be denied, thus, Article 5 of the Constitution as well.

4. According to the petitioner, the impugned provisions of laws and of the Statute of the Seimas conflict with the constitutional principle of a state under the rule of law.

The Constitutional Court has held in its rulings more than once that the principle of a state under the rule of law implies, along with the other requirements, that the Constitution has the supreme legal power and that the laws, government resolutions and other legal acts must be in conformity with the Constitution, that the institutions exercising state authority and other state institutions must act on the basis of law and in compliance with law.

As it has been mentioned, the principle of the separation of powers is enshrined in the Constitution. In the context of the case at issue it needs to be noted that the principle of a state under the rule of law also implies that the institutions exercising state authority may not exceed the powers established for them in the Constitution, and that one institution of state authority may not interfere with the powers of another institution of state authority, which are established for the latter in the Constitution.

Thus, after the Constitution had established the powers only to the Government to prepare the draft budget of the state, then no other state institution, no other entity may interfere with these powers.

5. According to the petitioner, the impugned provisions of the aforementioned laws and of the Statute of the Seimas conflict with Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution.

Item 14 of Article 67 of the Constitution provides that the Seimas shall approve the draft budget of the state. Under Paragraph 1 of Article 131 of the Constitution, the draft budget of the state shall be considered by the Seimas, and shall be approved by law by the beginning of the new budget year.

Thus, Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution establish as to what entity is empowered to approve the draft budget of the state: under the Constitution, only the Seimas is empowered to do so.

Under the Constitution, the approval of the draft budget of the state (enactment of the law on the state budget) is the final point of the formation of the budget. The constitutional powers of the Seimas to approve the draft budget of the state also include the powers of the Seimas to provide for the financial resources of the state budgetary revenues, the estimated state budgetary revenues and their amounts as well as the expenditures of the state budget, the entities to which the finances from the state budged are allocated, the amounts of the appropriations etc.

The Seimas may not waive the powers established to it by the Constitution to approve the draft budget of the state or transfer these powers to other state institutions, while the latter may not take over these powers from the Seimas. Otherwise, the constitutional powers of the Seimas to approve the draft budget of the state would be denied: thus, the constitutional principle of the separation of powers would be denied and Article 5 of the Constitution would be violated.

While considering and approving the budget of the state, the Seimas is also bound by the constitutional imperative of an open, just and harmonious civil society, the principle of the separation of powers, as well as the other norms and principles of the Constitution. It needs to be noted that the constitutional imperative of an open, just and harmonious civil society, the necessity to guarantee the constitutional rights and freedoms of persons and to protect other values entrenched in the Constitution imply the duty of the Seimas, in the course of the consideration and approval of the state budget, to take account of the functions of the state which are established in the Constitution, of the existing social and economic situation, the needs and possibilities of society and the state, the available or potential financial resources and the liabilities of the state, as well as other important factors.

A duty of the Seimas arises out of Article 5 and the other articles of the Constitution which establish the powers of the state institutions exercising state authority and which enshrine the constitutional principle of the separation of powers, while the Seimas considers and approves the draft budget of the state, to provide the needed funds for the state institutions exercising state authority, i.e. the Seimas, the President of the Republic, the Government, the Judiciary, so that the constitutionally established independence of these state institutions exercising state authority and the balance of powers would be guaranteed and that these institutions might perform the functions established for them in the Constitution and laws.

The Seimas is bound not only by the Constitution, but also by the laws that it has passed. Paragraph 2 of Article 131 of the Constitution provides that expenditures established by law may not be reduced as long as said laws are not amended. If certain laws provide for certain expenditures, the Seimas, while considering and approving the draft budget of the state, must establish in the draft budget the expenditures provided for in the said laws.

Under Article 129 of the Constitution, the budget year shall begin on the 1st of January and shall end on the 31st of December. The constitutional right and duty of the Seimas follows from this constitutional provision to approve the state budget for the budget year only.

III

On the compliance of Article 39 of the Law on the Health System with Article 5, Item 14 of Article 67, Item 4 of Article 94, Article 130, Paragraph 1 of Article 131 of the Constitution and the constitutional principle of a state under the rule of law.

1. Article 39 of the Law on the Health System provides: “The base amount of the financing of the Lithuanian National Health System activities including the funds of state budget and municipal budgets and the funds of the compulsory health insurance fund budget must account for not less than 5% of the value of the gross domestic product each year.”

2. The health of an individual and of society is one of the most important values of society. Paragraph 1 of Article 53 of the Constitution provides that the state shall take care of people’s health and shall guarantee medical aid and services in the event of sickness. Under Paragraph 1 of Article 53 of the Constitution, the procedure for providing medical aid to citizens free of charge at state medical facilities shall be established by law.

3. Under Article 39 of the Law on the Health System, the base amount of the financing of the health system which must account for not less than 5% of the value of the gross domestic product each year should consist of the funds provided for the said purposes in state budget and municipal budgets and in the compulsory health insurance fund budget. Thus, this article prescribes a rule that, in order to finance the health system, each year the state budget and municipal budgets must provide for a certain portion of expenditures which is not less than that set in advance (expressed in proportional portion of the gross domestic product); the amount of the said portion depends on the value of the gross domestic product in the respective year, and on the amount of the compulsory health insurance fund budget.

4. While determining whether Article 39 of the Law on the Health System is in compliance with the Constitution, one must, first of all, elucidate whether the legal regulation established in this article, under which each year a certain portion of expenditures ought to be allocated to finance the health system, which is not less than that set in advance, is in compliance with the constitutional concept of the laws that may provide for expenditures which may not be reduced as long as the said laws are not amended, as pointed out in Paragraph 2 of Article 131 of the Constitution.

5. As it has been mentioned, it is not permitted to establish such legal regulation by means of the laws indicated in Paragraph 2 of Article 131 of the Constitution which would deny the constitutional right and duty of the Government to prepare the state budget for the budget year and the constitutional right and duty of the Seimas to approve the state budget for the budget year, while taking account of the existing social and economic situation, the needs and possibilities of society and the state, the available or potential financial resources and the liabilities of the state, as well as other important factors. The laws specified in Paragraph 2 of Article 131 of the Constitution can only provide for expenditures necessary in order to achieve a defined, generally important goal over a certain period of time established by law, provided these needs cannot be satisfied in one budget year. Such laws may not provide for funds necessary for the execution of routine functions of the state, for funds necessary to finance every-day needs of society (the Constitutional Court’s ruling of 14 January 2002).

6. Article 39 of the Law on the Health System establishes as to how many funds expressed in the proportional portion of the gross domestic product value must be allocated to finance the national health system activities. The formula “the amount of the financing of the national health system” employed in Article 39 of the Law on the Health System shows that this article prescribes as to how many funds ought to be allocated to one of the sectors financed by the state, i.e. the national health system activities. This article does not define any concrete objectives to be achieved during the prescribed time period by allocating the funds pointed out in the said law. The formula “the amount of the financing of the national health system” should be regarded as one establishing expenditures to finance every-day needs of society, i.e. the health system. The financing of the national health system activities is a routine function and duty of the state.

Thus, the legal regulation established in Article 39 of the Law on the Health System is not in line with the constitutional concept of the laws that may provide for expenditures which may not be reduced as long as the said laws are not amended, as pointed out in Paragraph 2 of Article 131 of the Constitution.

It needs to be noted that Article 39 of the Law on the Health System regulates the relations which, according to the constitutional concept of the state budget, may be regulated by means of the law on the state budget only. After the Law on the Health System has established that every year not less than a certain portion of the national budget and municipal budgets’ funds must be allocated to finance the national health system activities, pre-conditions are created to deny the constitutional concept of the budget year, as well as the time limit of the budget year established in Article 129 of the Constitution.

Taking account of the arguments set forth, it should be concluded that Article 39 of the Law on the Health System conflicts with the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended as well as Article 129 of the Constitution.

7. After Article 39 of the Law on the Health System has established that every year not less than a certain portion of the national budget and municipal budgets’ funds, which is not less than that set in advance (expressed in proportional portion of the gross domestic product), must be allocated to finance the national health system activities, the Government, in the course of the preparation of the draft budget of the state for a certain year, must provide for the amount of allocations to finance the health system activities, which is established in Article 39 of the Law on the Health System. Such legal regulation limits the constitutional powers of the Government, in the course of the preparation of the draft budget of the state for a certain year, to take into consideration the existing social and economic situation, the needs and possibilities of society and the state, the available or potential financial resources and the liabilities of the state, as well as other important factors.

Taking account of the arguments set forth, it should be concluded that Article 39 of the Law on the Health System conflicts with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state, and the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state.

8. Article 5 of the Constitution provides that the scope of powers shall be defined by the Constitution. It has been mentioned that in this article as well as the other articles establishing the powers of the institutions exercising state authority the principle of the separation of powers is entrenched, which also means that after the Constitution has directly established the powers of a particular institution of state authority, then a certain institution of state authority may not take over such powers from another institution. This also means that such powers may not be changed or limited by law. Having held that the laws limit the powers established for a particular institution of state authority by the Constitution, it must be held, alongside, that Article 5 of the Constitution and the constitutional principle of the separation of powers are violated.

The Constitution has the supreme legal power. The laws, resolutions of the Government and other legal acts must be in conformity with the Constitution. The institutions exercising state authority as well as other state institutions must act on the basis of the Constitution and in compliance with it. If it is held that the laws, resolutions of the Government or other legal acts disregard the said requirements, it should be held, alongside, that the constitutional principle of a state under the rule of law is being violated.

It has been held in this ruling of the Constitutional Court that Article 39 of the Law on the Health System conflicts with the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended, the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state, the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state, and Article 129 thereof. Alongside, it should be held that Article 39 of the Law on the Health System conflicts with Article 5 of the Constitution, the constitutional principle of the separation of powers, and the constitutional principle of a state under the rule of law.

9. Item 14 of Article 67 of the Constitution provides that the Seimas shall approve the state budget. Paragraph 1 of Article 131 of the Constitution provides that the draft budget of the state shall be considered by the Seimas, and shall be approved by law by the beginning of the new budget year.

It has been mentioned that, under Paragraph 2 of Article 131 of the Constitution, expenditures established by law may not be reduced as long as said laws are not amended, therefore, if certain laws provide for certain expenditures, the Seimas, while considering and approving the state budget, must establish the expenditures which are provided for in the said laws.

Article 39 of the Law on the Health System provides that the amount of the financing of the national health system including the funds of state budget and municipal budgets and the funds of the compulsory health insurance fund budget must account for not less than 5% of the value of the gross domestic product each year. Thus, according to Article 39 of the Law on the Health System, each year certain amount of expenditures must be provided for in the state budget and municipal budgets which is not less than that set in advance (expressed in proportional portion of the gross domestic product), the amount of which depends on the value of the gross domestic product in the respective year, and on the amount of the compulsory health insurance fund budget in the respective year.

10. It has been mentioned that the Seimas is bound not only by the Constitution, but also by the laws that it has enacted. Under the Constitution, the laws may establish legal regulation defining the implementation of the powers of the Seimas and thus binding the Seimas, however, the Seimas is not absolutely free to establish any bindings for itself by law: by binding itself with laws the Seimas may not violate the Constitution. In the context of the case at issue it needs to be noted that the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended means that the Seimas may enact laws providing for certain expenditures and, as long as the said laws are not amended, it may bind itself by these laws at the time of the consideration and approval of the draft budget of the state. However, while considering and approving the draft budget of the state, the Seimas may bind itself not by any laws but only by such which would be in line with the constitutional concept of the aforementioned laws.

11. It has already been held in this ruling of the Constitutional Court that Article 39 of the Law on the Health System is not line with the constitutional concept of the laws pointed out in Paragraph 2 of Article 131 of the Constitution which provide for certain expenditures that may not be reduced as long as the said laws are not amended.

Thus, Article 39 of the Law on the Health System limits the powers of the Seimas to approve the state budget as provided for in Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution.

Taking account of the arguments set forth, it should be concluded that Article 39 of the Law on the Health System conflicts with the provision of Item 14 of Article 67 of the Constitution that the Seimas shall approve the state budget and Paragraph 1 of Article 131 of the Constitution.

12. The Constitutional Court notes that the conclusion that Article 39 of the Law on the Health System conflicts with the Constitution may not be interpreted as prohibiting the Government, when it is preparing the draft budget of the state, or as prohibiting the Seimas, when it is considering and approving the state budget, form providing for the funds to finance the national health system activities which would comprise 5% of the gross domestic product value. In case of need, one may allocate the funds to finance the national health system activities, which might comprise more than 5% of the gross domestic product value. However, the amount of the funds to be allocated to finance the national health system activities in each budget year must be established not by defining a portion of funds set in advance but in the course of the preparation and approval of the state budget of a respective year.

IV

On the compliance of the Law on the Long-term Financing of Science and Education with Article 5, Item 14 of Article 67, Item 4 of Article 94, Article 130, Paragraph 1 of Article 131 of the Constitution and the constitutional principle of a state under the rule of law.

1. The Law on the Long-term Financing of Science and Education provides:

The Seimas of the Republic of Lithuania, taking account of the importance of science and education for the Lithuanian economy, the welfare of the people and stability of the state, holding that not enough funds from the state budget and from the municipal budgets have been allocated to science and education, comprehending the importance of a more effective system of science, studies and education, passes this Law.

Article 1. State Budget Appropriations for Science and Studies.

The following proportional indicators shall be established to finance science and studies:

1) not less than 1.35 percent of the gross domestic product shall be allocated in 2001;

2) not less than 1.5 percent of the gross domestic product shall be allocated in 2002;

3) not less than 1.75 percent of the gross domestic product shall be allocated in 2003;

4) not less than 2 percent of the gross domestic product shall be allocated in 2004.

Article 2. State Budget and Municipal Budgets’ Appropriations for Education.

The following proportional indicators shall be established to finance education: not less than 6.5 percent of the gross domestic product shall be allocated to finance education in 2001, 2002, 2003, and 2004.

Article 3. Proposals for the Government.

To propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this Law and guarantee that, by gradually increasing the financing of science, studies and education, the whole system of the establishments of science, studies and education be reformed.”

2. Education and science are constitutional values. Under the Constitution, the state has the duty to allocate funds to finance education and science.

3. Article 1 of the Law on the Long-term Financing of Science and Education provides for the indicators of the appropriations of the state budget for science and studies; these indicators are expressed in proportional portions of the gross domestic product. Article 2 of the same law provides for the indicators of the appropriations of the state budget and municipal budgets for education; these indicators are expressed in proportional portions of the gross domestic product. Article 3 of the same law contains the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this Law”.

4. While deciding whether the Law on the Long-term Financing of Science and Education is in compliance with the Constitution, one must, first of all, elucidate whether the legal regulation entrenched in this law under which each year a certain portion of expenditures ought to be allocated to finance science, studies and education, which is not less than that set in advance (expressed in proportional portions of the gross domestic product), is in compliance with the constitutional concept of the laws that may provide for expenditures which may not be reduced as long as the said laws are not amended, as pointed out in Paragraph 2 of Article 131 of the Constitution.

5. As it has been mentioned, the laws specified in Paragraph 2 of Article 131 of the Constitution can only provide for expenditures necessary in order to achieve a defined, generally important goal over a certain period of time established by law, provided these needs cannot be satisfied in one budget year. Such laws may not provide for funds necessary for the execution of routine functions of the state, for funds necessary to finance every-day needs of society.

6. The title “State Budget Appropriations for Science and Studies” of Article 1 of the Law on the Long-term Financing of Science and Education and the formula “the following proportional indicators shall be established to finance science and studies” employed in the same article show that the article provides how many funds of the state budget (expressed in proportional portions of the gross domestic product) must be allocated to one sector financed by the state, i.e. to science and studies. The title “State Budget and Municipal Budgets’ Appropriations for Education” of Article 2 of this law and the formula “the following proportional indicators shall be established to finance education” employed in the same article show that the article provides how many funds of the state budget and municipal budgets (expressed in proportional portions of the gross domestic product) must be allocated to one sector financed by the state and municipalities, i.e. to education.

The Law the on Long-term Financing of Science and Education does not contain any concretely defined objectives to be achieved during the time period established in the same law by allocating the funds provided for in the law. The said law provides for the funds designated for the every-day needs of society, i.e. the financing of science and studies as well as education. The financing of science and studies as well as education is a routine function and a constant duty of the state.

Thus, the legal regulation established in Articles 1 and 2 of the Law on the Long-term Financing of Science and Education is not in conformity with the constitutional concept of the laws that provide for expenditures which may not be reduced as long as the said laws are not amended, as pointed out in Paragraph 2 of Article 131 of the Constitution.

The expenses established in Articles 1 and 2 of the Law on the Long-term Financing of Science and Education are expenses for the implementation of the routine functions of the state and for the financing of the every-day needs of society. The said articles regulate the relations which, under the constitutional concept of the state budget, may be regulated by means of the law on the state budget only. After it had been established in Article 1 of the Law on the Long-term Financing of Science and Education that in 2001, 2002, 2003 and 2004 a certain portion of expenditures from the state budget (expressed in proportional portions of the gross domestic product) ought to be allocated to finance science and studies, which is not less than that set in advance, and in Article 2 of the same law that in 2001, 2002, 2003 and 2004 a certain portion of expenditures from the state budget (expressed in proportional portions of the gross domestic product) ought to be allocated to finance education, which is not less than that set in advance, pre-conditions were created to deny the constitutional concept of the budget year and the time period of the budget year specified in Article 129 of the Constitution.

Taking account of the arguments set forth, it should be concluded that Articles 1 and 2 of the Law on the Long-term Financing of Science and Education conflict with the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended, and with Article 129 of the Constitution.

7. From the provision of Paragraph 2 of Article 131 of the Constitution that expenditures established by law may not be reduced as long as said laws are not amended a duty arises for the Government in the course of the preparation of the draft budget of the state to provide for as many funds as established in the laws providing for such funds. Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education set a duty for the Government in the course of the preparation of draft laws on approving the financial indicators of the 2001–2004 state budgets and municipal budgets to provide for the funds established according to the proportional indicators provided for in Articles 1 and 2 of the Law on the Long-term Financing of Science and Education. Such legal regulation limits the constitutional powers of the Government to prepare the draft budget of the state for the budget year while taking account of the existing social and economic situation, needs and possibilities of the state and society, available or potential financial resources, state liabilities and other important factors.

Taking account of the arguments set forth, it should be concluded that Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education conflict with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state and the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state.

8. It has been held in this ruling of the Constitutional Court that Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education limit the constitutional powers of the Government to prepare the draft budget of the state and, therefore, conflict with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state and the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state. Alongside, it must be held that Articles 1 and 2 as well as the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education conflict with Article 5 of the Constitution, the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

9. Item 14 of Article 67 of the Constitution provides that the Seimas shall approve the state budget. Paragraph 1 of Article 131 of the Constitution provides that the draft budget of the state shall be considered by the Seimas, and shall be approved by law by the beginning of the new budget year.

It has been mentioned that the Seimas, while binding itself with laws, may not violate the Constitution.

It has been held in this ruling of the Constitutional Court that Articles 1 and 2 of the Law on the Long-term Financing of Science and Education conflict with the constitutional concept of the laws that may provide for expenditures which may not be reduced as long as the said laws are not amended, as pointed out in Paragraph 2 of Article 131 of the Constitution.

Thus, Articles 1 and 2 of the Law on the Long-term Financing of Science and Education limit the powers of the Seimas to approve the state budget which are established in Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution.

Taking account of the arguments set forth, it should be concluded that Articles 1 and 2 of the Law on the Long-term Financing of Science and Education conflict with the provision of Item 14 of Article 67 of the Constitution that the Seimas shall approve the state budget as well as Paragraph 1 of Article 131 of the Constitution.

10. The conformity of the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education with Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution should be assessed in a different manner.

The impugned provision of the Law on the Long-term Financing of Science and Education is addressed to the Government. This provision does not limit or deny the powers established for the Seimas in Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution to approve the state budget.

Taking account of the arguments set forth, it should be concluded that the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Law on the Long-term Financing of Science and Education is in compliance with the provision of Item 14 of Article 67 of the Constitution that the Seimas shall approve the state budget as well as with Paragraph 1 of Article 131 of the Constitution.

11. The Constitutional Court notes that the conclusion that Articles 1 and 2 as well the impugned provision of Article 3 of the Law on the Long-term Financing of Science and Education conflict with the Constitution may not be interpreted as prohibiting the Government in the course of the preparation of the draft budget of the state and as prohibiting the Seimas in the course of the consideration and approval of the state budget form providing for the funds in the budget to finance science, studies and education which would comprise an amount not less than the portion of the gross domestic product as established in the Law on the Long-term Financing of Science and Education. If necessary, the funds may be allocated to finance science, studies and education that would comprise even a bigger portion of the gross domestic product than established in the said law. However, the fact as to how many funds ought to be allocated to finance science, studies and education must be established by preparing and approving the state budget for a corresponding year, but not by defining funds set in advance.

V

On the compliance of Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas with Article 5, Item 14 of Article 67, Item 4 of Article 94, Article 130 and Paragraph 1 of Article 131 of the Constitution as well as the constitutional principle of a state under the rule of law.

1. Paragraph 2 of Article 18 of the Law on the Structure of the Budget provides: “The Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates.”

Under Paragraph 1 of Article 172 of the Statute of the Seimas, the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates.

2. While deciding whether Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas are in compliance with the Constitution, the fact is of essential importance that, under Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas, the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, must include into the draft the amounts of appropriations for the Office of the Seimas which have been presented by the Board of the Seimas.

3. It has been mentioned that, under the Constitution, the powers to prepare the draft budget of the state are established for the Government, and that the powers to prepare the draft budget of the state mean that only the Government has the powers to estimate in the draft budget of the state how many funds must be received and their sources, how many and what funds must be allocated for particular purposes etc.

After Paragraph 2 of Article 18 of the Law on the Structure of the Budget and Paragraph 1 of Article 172 of the Statute of the Seimas had established that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, must include into the draft the amounts of appropriations for the Office of the Seimas which have been presented by the Board of the Seimas, the constitutional powers of the Government to prepare the draft budget of the state were limited.

Taking account of the arguments set forth, it should be concluded that Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the provision of Paragraph 1 of Article 172 of the Statute of the Seimas that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates conflict with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state and the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state.

4. It has been held in this ruling of the Constitutional Court that Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the provision of Paragraph 1 of Article 172 of the Statute of the Seimas limit the constitutional powers of the Government to prepare the draft budget of the state, therefore, they conflict with the provision of Item 4 of Article 94 of the Constitution that the Government shall prepare the draft budget of the state and the provision of Article 130 of the Constitution that the Government shall prepare the draft budget of the state. Alongside, it must be held that Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the provision of Paragraph 1 of Article 172 of the Statute of the Seimas that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates conflict with Article 5 of the Constitution, the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

5. Item 14 of Article 67 of the Constitution provides that the Seimas shall approve the state budget. Paragraph 1 of Article 131 of the Constitution provides that the draft budget of the state shall be considered by the Seimas, and shall be approved by law by the beginning of the new budget year.

Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the impugned provision of Paragraph 1 of Article 172 of the Statute of the Seimas provide that the Government must include the amounts of appropriations for the Office of the Seimas which have been presented by the Board of the Seimas into the prepared draft law on approving the financial indicators of the state budget and municipal budgets.

The impugned provisions do not limit or deny the powers of the Seimas to approve the state budget which are established in Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution.

It needs to be noted that there is no reason to recognise Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the impugned provision of Paragraph 1 of Article 172 of the Statute of the Seimas as conflicting with Item 14 of Article 67 and Paragraph 1 of Article 131 of the Constitution also due to the fact that the Seimas, enjoying the constitutional powers to consider and approve the state budget, is not bound by the amounts of appropriations for the Office of the Seimas which are provided for in the draft budget of the state that is prepared by the Government and submitted to the Seimas: the Seimas may change the amounts of appropriations provided for in the draft budget of the state.

Taking account of the arguments set forth, it should be concluded that Paragraph 2 of Article 18 of the Law on the Structure of the Budget and the provision of Paragraph 1 of Article 172 of the Statute of the Seimas that the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates are in compliance with the provision of Item 14 of Article 67 of the Constitution that the Seimas shall approve the state budget and Paragraph 1 of Article 131 of the Constitution.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 54, 55, 56 and Item 3 of Paragraph 1 of Article 69 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Article 39 of the Republic of Lithuania’s Law on the Health System conflicts with Article 5 of the Constitution of the Republic of Lithuania, the provision of Item 14 of Article 67 thereof that the Seimas shall approve the state budget, the provision of Item 4 of Article 94 thereof that the Government shall prepare the draft budget of the state, Article 129 thereof, the provision of Article 130 thereof that the Government shall prepare the draft budget of the state, Paragraph 1 of Article 131, and the provision of Paragraph 2 of Article 131 thereof that expenditures established by law may not be reduced as long as said laws are not amended, as well as with the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

2. To recognise that Articles 1 and 2 of the Republic of Lithuania’s Law on the Long-term Financing of Science and Education conflict with Article 5 of the Constitution of the Republic of Lithuania, the provision of Item 14 of Article 67 thereof that the Seimas shall approve the state budget, the provision of Item 4 of Article 94 thereof that the Government shall prepare the draft budget of the state, Article 129 thereof, the provision of Article 130 thereof that the Government shall prepare the draft budget of the state, Paragraph 1 of Article 131, and the provision of Paragraph 2 of Article 131 thereof that expenditures established by law may not be reduced as long as said laws are not amended, as well as with the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

3. To recognise that the provision “to propose that the Government, when it prepares respective draft laws on the approval of the financial indicators of the 2001–2004 state budgets and municipal budgets, take into consideration the provisions of this law” of Article 3 of the Republic of Lithuania’s Law on the Long-term Financing of Science and Education conflicts with Article 5 of the Constitution of the Republic of Lithuania, the provision of Item 4 of Article 94 thereof that the Government shall prepare the draft budget of the state, the provision of Article 130 thereof that the Government shall prepare the draft budget of the state, as well as with the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

4. To recognise that Paragraph 2 of Article 18 of the Republic of Lithuania’s Law on the Structure of the Budget conflicts with Article 5 of the Constitution of the Republic of Lithuania, the provision of Item 4 of Article 94 thereof that the Government shall prepare the draft budget of the state, the provision of Article 130 thereof that the Government shall prepare the draft budget of the state, as well as with the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

5. To recognise that the provision “the Government, while preparing the draft law on approving the financial indicators of the state budget and municipal budgets for a corresponding year and submitting it to the Seimas, on the proposal of the Board of the Seimas, shall include into the draft the amounts of appropriations for the Office of the Seimas which have been approved by the Board of the Seimas for the programmes of the Office of the Seimas according to the expenditure estimates” of Paragraph 1 of Article 172 of the Statute of the Seimas of the Republic of Lithuania conflicts with Article 5 of the Constitution of the Republic of Lithuania, the provision of Item 4 of Article 94 thereof that the Government shall prepare the draft budget of the state, the provision of Article 130 thereof that the Government shall prepare the draft budget of the state, as well as with the constitutional principle of the separation of powers and the constitutional principle of a state under the rule of law.

6. To dismiss the case in the part concerning the compliance of Article 16 of the Republic of Lithuania’s Law on the State Regulation of Economic Relations in Agriculture with the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:                                                  Armanas Abramavičius

Egidijus Jarašiūnas

Egidijus Kūris

Kęstutis Lapinskas

Zenonas Namavičius

Jonas Prapiestis

Vytautas Sinkevičius

Stasys Stačiokas