Unallotment may well be unconstitutional (at least this time)
Is Gov. Tim Pawlenty's wielding of his unallotment authority to balance the state budget illegal? There are both statutory and constitutional arguments that it is.
The governor's unallotment authority comes from Minnesota Statutes §16A.152. It gives him the power, once the commissioner of revenue has determined that there is a budget shortfall, to reduce spending in the state budget until revenues equal expenditures. This means refusing to spend money already appropriated or to cut the budget to ensure it is balanced. This is what unallotment is.
How broad is this unallotment authority? Previous deployment of this power by Minnesota governors has been infrequent since its adoption in 1973. When used, one if not two conditions were present. One, when a budget shortfall is discovered late into the biennial budget cycle, and two, when the Legislature is not in a position to act expeditiously, such as when it is out of session. In circumstances like this, unallotment may make sense because it gives the governor limited authority to address a budget crisis.
A basic rule of statutory interpretation
When the above two conditions are not present, as is the case with Pawlenty's proposed use here, the legality of unallotment is questionable. Thus, there are two reasons to argue that the governor's interpretation of §16A.152 is incorrect. First, it is unlikely that the original intent of the Legislature was to give the governor this broad of a power to unallot. Its original passage was to give the governor power to address small budgetary shortfalls, not make cuts that amount to major programmatic changes. Second, there is a basic rule in law regarding statutory interpretation. One should interpret laws to avoid absurd results and avoid conflicts with other laws. Here, if one accepts the governor's reading of unallotment, it would mean he alone has the power to change fiscal priorities for the state or that he could use this power to negate laws establishing statutory authorized policies. One result is absurd; the other produces a conflict in the laws.
Unallotment as the governor wishes to use it may also be unconstitutional. The governor's broad claim of unallotment authority resembles President Richard Nixon's assertion that he had the power to impound or refuse to spend money authorized by Congress. Some argued that what he did was unconstitutional in that it trampled on Congress' authority. Congress responded with the passage of the 1974 Congressional Budget and Impoundment Control Act. Minnesota Statute §16A.152 was adopted at a time when Nixon was still using impoundment, raising questions regarding whether if courts looked at it today, would it be found to be a violation of the Constitution. This is debatable. The Constitution governs relations between Congress and the president, and it may not be binding on Minnesota. However, the principle from the Nixon impoundment dispute may still apply, asking whether the governor's broad use of unallotment violates the Minnesota Constitution or the law.
In Minnesota, an explicit clause on separation
Unlike the U.S. Constitution, the Minnesota Constitution has an explicit clause that addresses separation of powers. Article III states: "The powers of government shall be divided into three distinct departments: legislative, executive and judicial. No person or persons belonging to or constituting one of these departments shall exercise any of the powers properly belonging to either of the others." One could argue that this clause protects legislative authority even more so than the federal Constitution, questioning whether unallotment as construed by the governor is permissible.
In the only case so far seeking to interpret the unallotment authority in light of Article III, the Minnesota Court of Appeals in the 2004 case Rukavina v. Pawlenty issued an exceedingly weak opinion upholding the use of unallotment as not a violation of that clause. While the court noted that "purely legislative power cannot be delegated," there are reasons to question the applicability of that precedent here because of very different facts. First, that case involved a challenge to unallotment from a special revenue fund. Second, the unallotment occurred late into a biennial budget cycle. Additionally, the reasoning in that case was weak, devoting barely a paragraph to the separations of powers issue, which was not really the major legal challenge in the case.
Were the Minnesota Supreme Court to examine the facts in the proposed use of unallotment, its constitutionality might be in doubt. One question is whether the Legislature can give the governor the broad powers he is asserting here. Besides doubting this broad assertion of unallotment is what the Legislature intended when it adopted the law in 1973, one has to ask whether the power to make the budget is "legislative power cannot be delegated."
The power to make budgets
There is no Minnesota case law stating whether the power to make the budget is a legislative function. But often courts will turn to other states for guidance when seeking to resolve novel legal issues. Here the answer is clearer. Courts in states such as California, New York, Texas, Ohio, Michigan, South Carolina, Massachusetts, Arizona, and Alaska have ruled that the power to make budgets is a legislative function. If those rulings are persuasive in interpreting Minnesota's Article III, one could argue that the assertion by the governor to interpret his unallotment authority the way he wishes usurps a purely legislative power and thus violates Article III. Perhaps unallotment authority as wielded in the past was constitutional because it was not a wholesale bypassing of legislative power, but here the governor is seeking to preempt the Legislature from acting (especially by not calling a special session) and performing its duties.
Second, the unallotment proposed here violates Minnesota Constitution Article IV, Section 23. This section outlines when a governor can veto a bill presented to him. Here one could argue that the creation of the budget is a series of bills that the governor has three days to veto. Once he chose not to veto the bills they became law. Now his decision to use unallotment amounts to a second veto. He cannot do this. No new bills are being presented to him, his three days have expired, and he does not have a second chance to veto.
Overall, while the unallotment power under Minnesota law may be legal and constitutional under certain conditions, its proposed use here may not be.
David Schultz is a Hamline University professor in St Paul, where he teaches classes in election law and government ethics.
More like this
- Primer on unallotment: How it works and why it's done
- The Supreme Court's unallotment decision was predictable
- Mpls, St. Paul, League of Cities on unallotment: Don't be absurd
- Common Cause-League of Women Voters Unallotment brief: Don't just rein it in; Strike it down
- If the Legislature overrides Pawlenty's veto, can he unallot anyway?
Recent Stories
Most Commented
-
27 comments
-
22 comments
-
19 comments
-
18 comments
-
15 comments
Comments (26)
Legal arguments will do no good at all if the dispute is perceived by the courts to be political rather than legal or constitutional. If opponents to the governor's unallotment strategy want to win as opposed to lose gracefully, or to shrink away from the fight in shame, it's past time to start dealing with that reality now.
A nice piece, David, and food for thought.
Now, why did not the lawers advising the DFL leaders in the Legislature give this advice to these leaders a month or so ago?
Or if they did, why have not Maggie K. et al taken that advice and immediately pressed it through a court challenge?
Pawlenty's move is an exercise in raw political power, which needs to be met with an equal and opposite political move.
Why are the DFLers so spineless against the Republican rabid dogs? Is it a "Minnesota Nice" thing?
C'mon ... let's see a Constitutional Crisis ... it would be fun to watch!
Though my legal background is zilch, Prof Schultz's arguments are persuasive and logical. My own view is that if challenged, the odds are great that unallotments as practiced in this situation are in clear violation of the constitutional separation of powers; and if Pawlenty's cuts are draconian, I would like to see the DFL challenge them in court.
My guess is that what Margaret's lawyers advised her is that if she pursued a lawsuit, she would, in all likelihood, lose. I know that's my opinion, but I also think that following a sound political and legal strategy against the governor's proposals could greatly enhance Margaret's chances of winning. The odds would be against her, but she would have a shot.
Tim, my impression is neither the speaker nor anyone else can sue Pawlenty until he actually unallots.
Also, legislators might not be the right ones to bring suits, The courts might require actual damages, which would mean someone whose funding was cut would have to bring the suit. David, can you address either of those?
"David, can you address either of those?"
Probably not ... he's too busy running for Ramsey County Attorney.
I'M KIDDING!
It's a differnet David Schultz who's running for that office.
This is a fact that is bound to become more confusing as both Davids will very much be in the public eye in the months to come!
I think every tagline from each David from here forward needs to mention that he's not the other one!
"Article III states: "The powers of government shall be divided into three distinct departments: legislative, executive and judicial. No person or persons belonging to or constituting one of these departments shall exercise any of the powers properly belonging to either of the others." One could argue that this clause protects legislative authority even more so than the federal Constitution, questioning whether unallotment as construed by the governor is permissible."
I take it that Prof. Schultz would then also agree it is a violation of the Minnesota Constitution when state agencies, under the guise of regulation and rule making, act in usurpation of legislative powers. I would.
Two comments.
I have been informed that unallotment actually goes back to 1939 but not used until the Quie Administration. That historical correction does not weaken my argument but strengthen it in the sense that it was enacted 70 years ago. During that 70 years there have been many changes in the US and MN constitutional jurisprudence on separation of powers, raising even more questions about its use as the governor is doing now.
Yes, it is possible that legislators may lack standing to challenge but in the past they have been granted it for challenges like this. However, depending on who actually files the complaint there may be additional federal law claims to challenge what the governor did. Hospitals and nursing homes, for example, may have federal medicare and medicaid claims they might be able to bring.
Standing is a problem. To be a party to a suit, you have to have rights at issue, and that concept can really be as elastic as the court chooses to be. I believe that a lack of standing ruling is nothing more than the court for whatever reason, doesn't want to hear the case, but then I am a cynic and no one likes me.
I believe legislator suits have come to grief before, and just in technical legal terms a sympathetic person with a good story who has been directly affected by the unallotments would seem to me the best plaintiff to choose. The power of empathy, despised though it might be by the conservative media, is not to be underestimated.
I think a big, expensive lawsuit is a great idea.
How could "real people", that favored but wholly undefined Democrat constituency, not see that pumping a few million tax dollars into the pockets of lawyers as stimulating the economy.
And then there's all of the revenue newspapers stand to collect peddling heart wrenching stories of the righteous outrage that led the DFL to throw open the doors of the state's treasury to Robins, Kaplan, Miller and Ceresi!
Politics? Nothing of the sort; it's all about "caring"....you know, for the "real people".
Besides, it's not like that 2 or 3 million would help keep the "poorest and the sickest" "real people" more comfortably cared for anyway.
See you in court.
Whether it's worth a million or two in legal fees to hear our governor explain how this widely anticipated budget shortfall was unanticipated by him is, I suppose, for others to decide.
How he managed to bury his head so deeply in the sand might be an interesting story for a national media looking for stories about prospective presidential candidates.
One of the previous comments described the governor's budget as "filling the hole" that the DFL was unable to do.
The DFL was served up by a very skilled governor. As such, a huge political victory for the governor.
Now back to that "budget hole" Tom.
I believe the "hole" that the governor filled, was done with borrowed money and shifts in payments. No doubt, a time tested method of accounting that has been used for the past number of years.
Although the governor would probably not frame it in those terms. Nevertheless it is exactly what was done to balance the budget.
This budget and all of its problems are being kicked into the next biennium and hoping for better times down the road. As you might say Tom, a "hopey, changey" kind of thing.
I am looking forward to the next biennium when there will not be a 2 billion dollar hand out from from the feds. It ought to make for a good show.
"the Governor told everyone in earshot that the state was in a financial hole."
Are you arguing the budget shortfall was anticipated? In light of the governor's subsequent claim to the contrary, how could that be?
"The DFL was served up by a very skilled governor. As such, a huge political victory for the governor."
Political victories don't pay hospital bills.
I'm curious, why would Dr Schultz suggest the State Supreme court look for advice from other states that do not have an unallotment provision in their constitution should such a case come before them? They will have to read the words of the MInnesota Constitution and rule on what our constitution says, not look for advice from other courts on the matter.
As for Pawlenty, Article VI, Section 23 also states that 'Any bill passed during the last three days of the session which is not signed and deposited within 14 days after adjournment does not become a law'. The house budget bill was passed on the second to last day before the adjournment day which means the House budget bill falls in to the category not mentioned by Dr Schultz. Thus, since the House bill did not become law not having been signed for 14 days after its passage in the House, unallotment can be invoked to address a shortfall.
Furthermore, statute 16A.152 Subd 4 says nothing about the size of shortfall as Dr Schultz suggests as a parameter necessary for the legality of unallotment. Dr Schultz is gleaning that from his own interpretation of the statute, but it is clearly not written in the statute even if that may have been the original intent. We have to interpret what the statute says, not what may or may not have been intended at the time it was written.
Lastly, Dr Schultz's opinion is written with 'maybe', 'possibly', 'perhaps', and 'questionable' to describe the legality or Constitutionality of Pawlenty's actions for unallotment. That, in and of itself, doesn't make a concrete argument in my book.
One could write a similar piece suggesting that 'maybe Pawlenty's actions are legal and might also be Constitutional' and the opinion would still be just as vague.
--
Patrick Dempsey
Chaska, MN
"I'm curious, why would Dr Schultz suggest the State Supreme court look for advice from other states that do not have an unallotment provision in their constitution should such a case come before them?"
I think the reason the Supreme Court could look at cases from other jurisdictions is that they might feel such cases provide insights into the case at hand. In any event, the Supreme Court can look at anything they like.
I am not sure what the point is about the constitution. The bill passed by the legislature didn't become law. I believe it was vetoed. That's not disputed. An argument could be made that by vetoing balanced budget bills, the governor waived his right to unallot, but I don't think that's the strongest of arguments.
The legal issue really comes down to this. Was the shortfall anticipated? If it wasn't, as the governor claims, he can unallot. If it was, it's possible at least that a court will rule that he does not have that power. It's simply a question of how an obscure, and vague provision of law is construed.
"The legal issue really comes down to this. Was the shortfall anticipated?"
If that's correct, then if the Legislature's last bill (rasing taxes) would have balanced the budget, then only by his action of vetoing it could Gov. Pawlenty have said he "anticipated" a shortfall. But that would have been by his action. If that's legally acceptable anticipation, then a governor can veto anything to unbalance a budget and say the imbalance is "anticipated". That would make Minnesota's governors into autocrats.
That is kind of a problem. But I think that takes us farther than we really need to go.
It's the job of the state government, legislature and governor to balance the budget. If that doesn't have, both have failed, and both should be held to account.
Anyone who thinks that using a legislatively mandated budgeting tool like unallotment instead of the constitutionally set way of state budgeting would lose in court system doesn't understand the court system very well. For instance, if I managed to get a law passed that said stupid people don't have the right to express their opinions that wouldn't override the First Amendment protection. Our laws are full of contradictions and that's what courts do – decide which law prevails. Our U.S. Supreme Court decisions are filled with instances where someone passed a law and the Supreme Court said it was unconstitutional. Yes, we live in a Democracy. But it is a Constitutional Democracy – meaning certain rights can not be legislated away. Unallotment is an emergency management tool to save the state from going into debt because our state constitution says we have to have a balanced budget. It is not a budgeting tool announced six weeks before the budget even begins.
If people think this is a waste of money, then I suggest they tell the governor not to open the state up to the liability caused by a poor understanding of the constitution.
Looking at Article XI Sec 6, which is the real budget limitation, I suggest that the legislature probably should not have passed the unallotment statute in the first place. That provision puts in place a process for funding in advance of tax collections and extends it to Dec 1 following the end of the biennium, at which point the auditor has to levy taxes to fund the certificates that are then outstanding. I also am concerned about the standing issue, following the logic of the U.S. Supreme Court recently it is difficult to see how the legislature is able to bring such a lawsuit, and since most of the cuts will not happen in immediate future few others will also.
The good professor sees thing in the Minnesota constitution he wishes to see. Using his extreme separation of powers interpretation, the governor would not be able to veto anything as that would infringe on the powers of the legislature.
Practically speaking, it doesn't matter because by the time the courts tried to sort this out, the next session will be in and there will be a political solution before there's a legal solution. Elections have a way of focusing politicians.
Can we get some national exposure on how this governor has no respect for the state constitution and how he thinks that he might be presidential caliber (as he hoped to be vice president candidate back in 2008). And show what he has done to the state moving it into a third world nation status.
He is doing this because to challenge him as he (and others) will attack look at the waste in the case. His lawyers (paid for by the state) and the legislature's lawyers (also being paid by the state). One would think that some law firm would take on the challenge for free (to protect the state residents from this improper action being attempted by this governor)! They can not be all the money grubbing people, I knew one lawyer that was also a Lutheran minister.
The article fails to acknowledge that in the vast majority situations, legislative intent is completely irrelevant under Minnesota Law. Minn. Stat. § 645.16 specifies “When the words of a law in their application to an existing situation are clear and free from all ambiguity, the letter of the law shall not be disregarded under the pretext of pursuing the spirit.”
The author’s argument that without an ambiguity in the law, that the courts should intervene to safeguard the spirit of the law would be illegal. In fact, if one truly understands the Minnesota Constitution then one would easily understand the necessity and breadth needed in the law.
The Minnesota Constitution Article XI Section 6 provides: “If money on hand in any fund is not sufficient to pay all non-refunding certificates of indebtedness issued on a fund during any biennium . . .the state auditor shall levy upon all taxable property in the state a tax collectible in the ensuing year sufficient to pay the same on or before December 1 of the ensuing year with interest to the date or dates of payment.”
Thus, if the governor does not un-allot, pretty much every Minnesota household will see a special property tax levy of around $2000 to $3000 arriving on Dec. 1 2011.
The argument that the governor is required to constitutionally pay out all monies appropriated by the governor is also without merit. The Minnesota Constitution Article XI. Section 1 provides: “No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law.” The State Constitution does not require that money that is appropriate be spent. Rather it is simply a restriction on the executive branch from spending money on what the legislature.
A lot of the argument of the author and the commentators seem to deal with the fairness of the whole situation. Politics is not a fair sport, and a perfectly credible analysis of the situation is that the incompetence of the majority party in the Minnesota Legislature is to blame for the whole situation.
If the Minnesota Legislature wanted to increase taxes all it needed to do was pass it a tax increase in January and not passed any spending bills until the Governor relented. If the Governor did not relent then we would have had a government shutdown and public pressure to reach a compromise.
In any case, the conduct of the legislature and the executive in passing and vetoing of laws is a political question that a court is not going to weigh in that it violates the separation of powers clause that the author cites.
Damages caused by unallotment would be most effectively demonstrated by an injured party.
The most likely injured parties do not have resources for hiring legal representation. So the governor in choosing to use unallotment is effectively saying to the populace: "Let them eat grass."
And perhaps he'll find on his lawn at the governor's mansion the empty wheelchairs of the casualties of unallotment.
While lawsuits are expensive, littering the no longer needed appliances of the dear departed is relatively cheap.
Given the governor's line item veto power and the provisions of Articles III and XI, Sec. 6, discussed above, it seems to me that a credible argument could be made that the unallotment statute itself violates the Minnesota Constitution, both on the grounds of improper delegation of legislative power to the executive and as directly contrary to the Constitutionally dictated means of addressing a situation in which revenues are insufficient to support statutorily mandated programs and operations. But I don't believe we'll see a court challenge by the DFL. They have nothing to gain politically. Politics is what this is all about.
Pawlenty shifted two-thirds of the shortfall ($1.8 billion) into the next biennium and spread another $1 billion in cuts over a fairly broad range, much of which will not be felt until late this year or well into 2010. I suspect he's counting on another showdown with the Legislature in 2010 and a change in revenue forecasts.
This should have been sorted out between the Legislature and the Governor during session. That it wasn't suggests that the two major political party core supporters are very far apart on governing philosophy.
Apparently both political parties think that having the State disrupt virtually every public function through funding disruptions is better than finding compromise with people of a different view.
A pox on both the major parties for that. I'm a amall "i" independent, and I remember pols who put party ahead of the public. I hope everybody else does too, and administers appropriate ballot-box justice.