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Gildea's unallotment dissent, redux

Lorie Skjerven Gildea
Lorie Skjerven Gildea

Rushing to get my judicial appointments post up on Friday, I left off a section I've been mulling about Justice (now-Chief Justice-designee) Lorie Gildea's spirited dissent in the unallotment case

In rereading the opinions, I've also noticed that the majority actually bent over backward to leave the unallotment statute on the books, which could have significant implications for the months just ahead.

So let me get both of those thoughts off my chest in hopes of soon leaving my obsession with that landmark case behind. With apologies in advance because I am not a lawyer and do not even play one on TV:

To be blunt, Gildea wrote her opinion in the cloak of a justice who (unlike her colleagues who signed the majority opinion) wanted to show proper judicial modesty and respect for the plain meaning of the statute. But another way of looking at it, and after mulling for a few days this is my way, is that Gildea showed deference NOT to the plain meaning of the statute, but to the governor's unprecedented and strained reading of the statute. If the Pawlenty/Gildea interpretation of the statute had been accepted, it would have transferred considerable authority from the Legislative to the Executive branch. There are several ways to characterize what properly modest judging requires. Ratifying such an executive branch power grab doesn't necessarily qualify under all definitions.

The full ruling (the Magnuson-written majority opinion is on top, Gildea's dissent is below) is here.

The strongest element of the dissent is Gildea's assertion that the four-member majority has invented a provision — specifically that unallotment power cannot be used until after a balanced budget has been enacted and then thrown out of balance by an unanticipated shortfall in revenue — that is nowhere mentioned in the statute.

Judges are not supposed to make up laws or portions of law. When a statute has a clear meaning, properly modest judges are bound by that meaning, even if they think the law is a bad idea, Gildea wrote. Magnuson agrees. It's actually pretty basic to the job — and Minnesota has enacted the principle by statute — that when the language of a law is clear, plain, unambiguous, susceptible to only one reasonable meaning, then the court's have no business reading a different meaning into the law.

The weakest element of Gildea's opinion is that she repeatedly states, with disdainful certainty, that the statute in question had a clear meaning and that clear meaning authorized Pawlenty's 2009 unallotments. For example (from the Gildea dissent):

"Unlike the majority, I do not find the language the Legislature used uncertain or ambiguous as applied to the unallotment at issue in this case. I would not rewrite the statute; I would apply the language as written. Because I would hold that the executive branch complied with the plain language of the statute ..."

I just went through and counted. Gildea's opinion used the phrase "plain language" eight times, (including one "plain unambiguous language") and a few variations like "plain on its face."

Clear as mud?
So, at a fundamental level, the majority and minority opinions are really about whether the statute is crystal clear.

The law in question, and the section in which the unallotment power resides, reads as follows:

"Subdivision 4: (a) If the commissioner determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the Legislative Advisory Commission, reduce the amount in the budget reserve account as needed to balance expenditures with revenue."

Pawlenty decided that this law meant he was empowered to make wholesale changes in the appropriation bills that he had just signed, that the "remainder" of the biennium could refer to the entire biennium, and that there need be no relationship between the size of the "unanticipated" revenue shortfall and the amount of the unallotment.

Unlimited unallotments
This aspect of Pawlenty's legal argument has not received the attention is deserves because it is so complicated and confusing. But Pawlenty's position was that any shortfall, noticed by his budget commissioner at any time on any basis, can trigger an unallotment of any magnitude.

In this particular case, Pawlenty did not rely on the fact that at the end of the 2009 legislative session there was a $2.7 billion gap between projected revenues and projected expenditures (a gap which had been proximately caused, not by a dip in revenue collections, but by Pawlenty's veto of a tax bill that would have raised about $900 million in taxes).

[The paragraph above has been corrected. The earlier version overstated the size of the tax increase that Pawlenty vetoed.]

No, the Pawlenty legal team pointed to a June finding by Budget Commissioner Tom Hanson that revenues were running $70 million less than the amount he had projected in February. This was not an official revenue forecast such as the February and November forecasts required by law. It was just a letter from Hanson to the governor.

So, based on that letter, Team Pawlenty argued, the governor was empowered to unallot $2.7 billion, a sum more than 30 times greater than the amount by which revenues "would be less than anticipated." Presumably, the trick would've worked if the revenue shortfall had been $10 and the deficit had been $10 billion.

This is the reading of the law that Justice Gildea ruled complied with the plain, unambiguous meaning of the statute. Go back and check out the statutory language again and see what you think.

Galen Robinson, attorney for the plaintiffs in the case, argued that "remainder" meant less than the entire biennium and that the amount unallotted had to bear some reasonable relationship to the amount by which revenues were projected to be less than anticipated.

Straining at meaning
Magnuson's majority opinion said the two sides in the case were offering differing interpretations of the meaning of the statute. Both were reasonable, he said, although Pawlenty's reading was more "strained." When statutory language is susceptible to two different reasonable interpretations, the court is then authorizing engage in the legal process called "statutory construction," which includes trying to figure out what the Legislature intended when it enacted the law and the consequences of the different interpretations.

After going down that path, the four justices of the majority ruled that the Legislature intended the unallotment power for instances in which a balanced budget was first achieved by the normal give and take between the legislative and executive branches, and then fell out of balance because of an unanticipated revenue shortfall.

In an act of judicial modesty for which Gildea gave him no credit, Magnuson wrote that this case did not require the court to decide on the constitutionality of the statute itself. The norms of judicial restraint suggest that if the case can be decided on a statutory basis, don't go constitutional.

Thus the unallotment law remains on the books as clarified — or, as Gildea suggests, amended — by the court's doctrine that unallotment is something that can occur only after a biennial balanced budget has first been enacted.

This is actually a fairly big deal, considering Monday's legislative news. We now have a balanced budget. If there is a revenue shortfall between now and July 2011 that throws the budget out of balance, Gov. Pawlenty or his successor could presumably address it with unallotments rather than needing to call a special session.

And the judicial modesty element is larger still, since the majority opinion hinted pretty strongly that if it had decided to make a constitutional ruling, it would have struck down the law. The Constitution intends for the Legislature to have the primary role in creating the state budget. The governor's role is limited, by the Constitution, to signing or vetoing (or line-item vetoing) taxing and spending bills, but not to usurping the Legislature's primacy in the setting the state's spending priorities.

Magnuson did write (in a passage that hasn't received the attention it deserves)

"[Gov. Pawlenty's] interpretation of the unallotment statute envisions a much broader role for the executive branch in the creation of biennial budgets than the process established by the constitution. Under appellants‘ interpretation of the unallotment statute, the executive branch has authority to modify spending decisions previously enacted into law if revenues projected (apparently at any time) for the biennium fall short of the spending authority in appropriation bills passed by the Legislature and signed by the Governor, whether the shortfall results from revenues lower than projected, a gubernatorial veto of a revenue bill, or legislative failure to pass adequate revenue legislation. The unallotment authority so construed would result in an alternative budget-creation mechanism that bypasses the constitutionally prescribed process. There is nothing to suggest that was the purpose for which the unallotment statute was enacted."

The majority ruled that Pawlenty's actions violated the Constitution, but that by construing the unallotment power as less expansive than Pawlenty did, they are able to leave the statute on the books, at least for now.

Gildea blasts the majority for overreaching by deciding that unallotment requires a previously balanced budget. But her dissent offers little acknowledgment that if not for the majority's williness to "divine" a new provision in the law, they apparently would have struck it down entirely.

Final thoughts
As I mentioned above, by finding a way not to strike down the statute, the ruling actually put the unallotment arrow back into the Pawlenty quiver for the last months of his tenure, and leaves it there for future governors.

When the Supreme Court nullified Pawlenty's unallotments, it seemed like a terrible slap to the guv, and seemed to throw the next phase of his combat with the DFL-controlled Legislature into  potential chaos. The end of the session suggests otherwise. Although it certainly didn't want to, the DFL majority of the Legislature in the end had to, or felt it had to, pretty much ratify almost all of TPaw's unallotments.

It seems that even without the souped-up unallotment powers that Pawlenty asserted, a governor whose party controls neither house of the Legislature has all the power he needs to force his will through, at least under these circumstances. The circumstances include that he has the unbreakable support of enough legislators in at least one house to prevent overrides of his vetoes. It helps if the governor in such a fight is the anti-taxer and is willing to stick to his anti-taxing principle while Rome burns. (Imagine a governor who wanted more spending than the Legislature was willing to authorize. The pressure points that worked for Pawlenty won't work for that other guv.) And, ultimately, it requires a governor who is more willing to see hell freeze over than his legislative adversaries.

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Comments (11)

I predict (again) that Justice Gildea will be the worst sort of politically-motivated, activist judge imaginable.

She will do everything in her power to support whatever authoritarian desires are expressed and acted upon by a Republican governor and to thwart any independent or DFL governor.

If we end up with an independent or DFL governor working with a DFL majority legislature working diligently to try to undo the damage governor Pawlenty has worked across the state of Minnesota, she will uphold any and all law suits seeking to overturn those efforts, no matter how far fetched the basis for those law suits.

She will not allow such trivial things as precedent or the Constitution of the State of Minnesota get in the way of pursuing her political ideology.

There are many reasons why this governor has been the worst in my 77 years as a native Minnesotan. Unfortuantely, his appointments to the Supreme Court will likely mean a continuance of his influence well after he is gone.

What has irked me the most is his continual "trick" conservatives use to disparage government. This involves starving government agencies (including those vital and even mandated) of revenues...then making the disengenuous claim that "government does not work".

We can all agree that government costs should be controlled and effective; and that trimming is often needed. But to take a hatchet to do the job of a scalpel is analagous to clear cutting a forest, and leaving only rotting stumps. And sadly, that is how Governor Pawlenty is leaving my beloved state of Minnesota.

The key to this entire discussion is the forecasting itself. If a weather forecaster ends up off the mark due to any number of factors influencing the weather, life goes on nonetheless.

If an economic forecast is missed due to any number of possibilities, the implications are potentially far more significant. Political events, natural disasters, terrorism, financial market turmoil, turmoil in commodity markets, etc. can all wreak havoc in short order.

Part of the whole 1981 debacle in Minnesota was over the forecasting model(s) used in those times to project revenue collections and overall economic conditions. I do not know the track record of the forecasts that are currently used by the state, so I have no way of trying to pass judgment as to whether or not they have been generally "reliable."

Obviously, today's economy is very different from three decades ago which probably makes the job of forecasting economic activity all the more difficult. And one can be sure there are many flavors of forecasts to choose from.

However, if these forecasts are going to form the basis for making difficult decisions, it would be interesting to get a synopsis of what is used. Just a thought.

What's needed now is for the Leg to amend the Unallotment statute to make its limitations clear. Of course they would have to override a veto if a GOP governor is in office ;-).

A legislative session operates under certain rules, one of which I have always understood to be that the most recent official revenue forecast defines the fiscal boundaries within which the various players must operate.

Another such rule is that the fiscal notes prepared for each bill define how taxing or spending bills fit into or redraw those boundaries by reducing or creating new revenue or by spending more or spending less.

Both the forecasts and the fiscal notes attached (or not) to each bill are subject to error or bias, but they are prepared using certain long-standing rules, various standardized inputs of data (including projected inflation) and certain factual assumptions concerning the variables addressed in the budget and each bill.

Living within those boundaries is what defines each legislative session and animates the inevitable flury at the end of each session as all sides go into their 2-minute drill.

Without a mutual (universal) willingness to abide by those rules and the boundaries they establish, a legislature could not function.

Those rules went unheeded by Governor Pawlenty in his unconstitutional unallotments and unaddressed in the SCOM dissenting opinion.

A player choosing to run outside the boundaries on his way towards the endzone does not change the rules, he merely reveals whether he feels bound by the rules applicable to all others.

Governor Pawlenty, touchdown dance notwithstanding, ran out of bounds on his way to the goal.

He may have considered his position so politically correct, so fiscally necessary, that he felt justified in that diversion from the historic norms.

But Constitutional forms of government are built to restrain such individual self-righteousness (even if and when justified) from overriding the basic structures of checks and balances that we rely on to protect us all in the long run.

The Supreme Court made the correct call and ruled that his "score" did not count.

The whole outcome is a fiscal disaster for the state. The really scary thing is not just that this fiasco was deliberately engineered by the governor and his party; but that they either still don't comprehend or don't care about the structural damage they've inflicted. This will be a nightmare for years to come.

"The key to this entire discussion is the forecasting itself. If a weather forecaster ends up off the mark due to any number of factors influencing the weather, life goes on nonetheless."

I disagree.

The forecast is what is "anticipated" in the terms of the statute. It will almost certainly not be correct; no one can know with certainty what the future will be. It's enough that it provides a reasonable basis for budgetary planning. If revenues come in less than anticipated, then the governor's unallotment power is triggered. But what is "anticipated" must mean something more than what the governor is thinking about at any given moment. It must be something fixed so that all parties have the opportunity to legislate with respect to it. The Supreme Court was very wise in recognizing that, coming down with a decision very narrow in it's specific application but which also provides real guidance for future governors and legislatures, respecting the roles of both.

Hiram, you miss the point.

Joel talks about the "official revenue forecast." In 1981, a key part of that discussion was the underlying assumptions used in various forecasts.

What is an "official revenue forecast?" Who makes it? What are the assumptions? Who decides what forecast will be used? Depending on the variable, change one even a smidge and you may have a very different result when you compare actual to forecast.

The state economist makes it. He does it a couple of times year. That's what the governor and the legislature use to establish a budget that complies with the obligation to balance the budget. Everybody accepts the forecast.

Despite the fact that I've been a resident for less than a year, I find myself sympathetic to Miles Spicer's lament, especially the disingenuous "trick" that people who call themselves "conservative" have successfully used for a generation – that is, ratcheting down the funding for state programs and agencies, then using the result to "prove" that government doesn't work.

I await their functional alternative to government...

Meanwhile, since I have no prior experience, I don't know if Pawlenty will turn out to be the worst Governor the state has ever had. I only know that I'd never vote for him myself.

His appointment of Gildea to the Chief Justice's chair certainly does not inspire confidence. Exectutive power comes at the expense of the rest of us (i.e., the legislature). Democracy is often frustrating to watch, especially for the people at the top, because it's not fast, and it's a poster child for inefficiency more often than not, but it isn't supposed to be quick or efficient. By design, democracy lets policy be determined by the slow, messy, and sometimes ill-informed will of the public.

Since there's no such thing as a truly free lunch, if the Governor makes a fetish, as Pawlenty apparently has, of "no new taxes," then, when costs go up, the only way to balance the budget is to hack away at the expense side of the ledger, and as far as I know, the constitution of every state in the union follows the lead of the U.S. Constitution in giving the power of the purse – the power to do that budgetary hacking – to the legislature, not the Governor.

Fortunately, the Minnesota Supreme Court followed suit, but Eric has – correctly, I think – pointed out some issues that have received far less attention than they merit.

Our greatest loss this year may be the retirement of Chief Justice Magnuson.

And the elevation of Gildea one of our greatest disasters.