At issue was whether the quietly powerful Controlling Board thwarted the intentions of the Legislature by allowing $2.56 billion in federal money to be spent on the expansion of Medicaid allowed under President Barack Obama's federal healthcare law.
The groups and GOP lawmakers contended the board exceeded its authority and asked the court to order the panel to void its decision. They claimed such a ruling was necessary to prevent serious harm to the checks and balances of government, particularly given that state lawmakers sent Gov. John Kasich a budget bill that effectively barred expansion of Medicaid. Kasich had vetoed the provision.
Attorneys for the state said the board's decision was legal and the plaintiffs lacked standing to bring the case, among other arguments.
Writing for the majority, Chief Justice Maureen O'Connor said the definition of "legislative intent" is not what lawmakers send to the governor, but the policy that prevails at the end of a legislative process in which the governor has a constitutional say.
Under the Ohio constitution, an act becomes law after both chambers of the Legislature approve it and the governor either signs it or allows it pass into law without his signature.
"Any other conclusion would create a constitutional crisis," she added.
Under the scenario presented by the plaintiffs, the legislative branch "would have the power to command the controlling board, in all cases, to disregard the governor's veto in the implementation of appropriations."
Her opinion was joined by Justices Paul Pfeifer and William O'Neill. Justice Judith Ann Lanzinger concurred in judgment only.
Among dissenters was Justice Terrence O'Donnell, who said there was no legal question before the high court.
"The General Assembly established the Controlling Board solely as a convenience, delegating to it authority to make the myriad adjustments to appropriations needed on a periodic basis," he wrote. "Because it is a creature of statute, the Controlling Board is wholly accountable to the legislative branch of government."
Justices Sharon Kennedy and Judith French dissented without opinion, indicating they would dismiss the case.
Kasich's administration had gotten approval from the federal government to expand Medicaid, the federal-state health program for the poor and disabled. However, Medicaid officials needed state legislative approval to spend the federal money on an estimated 366,000 newly eligible residents.
The GOP-controlled Legislature balked at the expansion, so administration officials asked the Controlling Board for the authority to spend the federal dollars. The seven-member board, which handles certain adjustments to the state budget, approved the expansion money in October.
Under state law, the Controlling Board is to carry out the intent of the General Assembly regarding program goals and levels of support for state agencies.
In the two-year state budget that lawmakers passed in June, majority Republicans inserted a provision that would have barred the Medicaid program from covering the additional low-income residents allowed under the new federal health care law. That was the item Kasich vetoed.
Kasich spokesman Rob Nichols said Friday, "Obviously, we're pleased with the court's ruling and glad that Ohio can now move forward."
The state had argued that should the plaintiffs prevail, the expanded coverage would be unfunded.
A long list of groups — including chambers of commerce, the Ohio National Guard Association, the Ohio State Medical Association, AARP and others — filed court briefs in support of the state's position. The conservative American Policy Roundtable filed court documents backing the plaintiffs.