First of two articles.

Fact 1: The Minnesota Constitution contains a strong, clear provision that state money cannot be spent without an appropriation.

Here’s the actual constitutional language from Article XI (Appropriations and Finances) Section 1 (Money paid from state Treasury):

“No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law.”

That makes perfect sense. That’s how government spending is supposed to work. In some ways, it is the essence of the separation of powers. On the other hand…

Fact 2: Recent experience suggests that when the government is forced to “shut down” because — well, because the money to keep it running has not been appropriated by law — a great many state government functions and a great deal of spending continue, without benefit of appropriations, while the governor and the Legislature work on a deal to put things back on the normal basis.

For various reasons, including Fact 1, it’s possible that the expected state government shutdown of 2011 will not follow the familiar pattern and that a far larger portion of the state government could shut down in July 2011 than shut down in July 2005.

“If you took that [constitutional] language at all seriously, you couldn’t spend anything” after July 1, said state Rep. Ryan Winkler, DFL-Golden Valley. And Winkler, who is a lawyer, was taking it seriously, at least when I spoke to him last week.

Winkler was aware of how then-Gov. Tim Pawlenty, then-Attorney General Mike Hatch and Ramsey County District Chief Judge Gregg Johnson found a path around the constitutional language in 2005. Judge Johnson ruled that — for various reasons — the “core functions” of the executive branch had to continue. The judge appointed a “special master,” empowered to decide what functions were “core” enough to qualify.

Because of that arrangement — and also because in 2005 a lot of big appropriations bill had actually been signed into law (by contrast, this time, only the Agriculture budget has been signed) — the public was relatively undisturbed by the shutdown. Also, the shutdown lasted only two weeks and, as part of the final settlement, the Legislature retroactively ratified the spending that had occurred under the special master’s supervision.

So, a happy ending, sorta, except for a brief period during which the constitutional requirement that no money be spent without an appropriation was — what should we say — suspended? Ignored? How about circumnavigated?

“I’ve looked at what was done in 2005, and it was completely unconstitutional,” said Winkler.

Is that so? And if it is so, how and why did it happen? And will it be done differently in the next shutdown, possibly as soon as one month from now?

Here’s what happened in 2005
Attorney General Hatch did not try to hide the Fact 1 constitutional provision. He quoted it in his brief, but then went ahead providing the court with three different rationales for circumnavigation.

1. Hatch argued that the failure to pass a budget that funds the “core functions” of the executive branch was itself a violation of the constitutional separation of powers because it amounted to the Legislature defunding the executive branch. (Kind of a stretch, if you ask me, since the legislature had, indeed passed the bills that would have funded the executive branch, but the governor had vetoed the bills.)

2. He argued that rights established by the state and federal constitutions could not be guaranteed without a budget. For example, the state constitution guarantees a “general and uniform system of public schools.” This would be hard to maintain without state education aid to public schools. (One weak spot in this argument is that public education is one of a few state functions covered by a permanent appropriation that could — I haven’t seen this argued out — provide state K-12 funding even during a shutdown. But I’m over my head here.)

3. Lastly, Hatch argued that Minnesota has chosen to participate in several federal programs that benefit Minnesotans but require state matching funds to operate. (Medicaid would probably be the biggest of these.) But they would be jeopardized if state funding dried up. And, the Hatch brief mentioned, the Supremacy Clause of the U.S. Constitution means that the state must fulfill its obligations under these federal laws, even if there is no appropriation with which to do so.

Replied Winkler on argument No. 3: If the Supremacy Clause problem is serious, the federal government can get its own court order, from a federal court, ordering Minnesota to do something. But it doesn’t require Minnesota to voluntarily violate its own constitution.

But Professor Mary Jane Morrison of Hamline Law School, author of a book on the Minnesota Constitution, read the Hatch brief at my request and called his arguments “exquisite” and “convincing.” 

If the Minnesota court decided that the “core functions must continue” argument was valid in 2005, why wouldn’t it decide the same in 2011?

It could. But bear this in mind. The ruling was made by a single district judge in 2005, and at the time the court was hearing only from Hatch and Pawlenty, both of whom (even as they prepared to run against one another for governor in 2006) wanted a limited, short-term shutdown. No one even presented the contrary no-appropriations-means-no-expenditures argument at the time. At least not right away.

Judge Johnson’s order gave them just three weeks to operate under the special master. The alternative was fairly unthinkable. Right away, one’s mind goes to crazy things like the state prisons shutting down (with the prisoners locked in or out?) and state police unable to patrol. Those unthinkables would still be around if the constitutional argument was taken seriously this time. The state constitution, at least, does not provide a clear way around this and, curiously, the prisons and state troopers are not covered by one of those permanent appropriations like the schools are.

But, in 2005, two weeks into that interim, Pawlenty and the Legislature reached a budget deal for the biennium and retroactively approved everything that had been spent without appropriations.

Judge Johnson’s short-term ruling did not have the precedential weight of a state Supreme Court decision.

If no-appropriations-means-no-appropriations is a serious argument, why didn’t anyone make it at the time?

Well, someone did, albeit a little late. A group of legislators — at first only House Republicans (led by then-House Speaker Steve Sviggum) but ultimately members of both houses and both parties (still mostly Repubs) — filed suit after the 2005 budget had been settled arguing that the spending of money without appropriations violated the state Constitution.

The attorney in that case, Erick Kaardal of Minneapolis, argued that what happened amounted to the executive and judicial branches ganging up to usurp constitutional powers that are explicitly reserved for the legislative branch, namely the power of the purse.

In an interview this week, Kaardal summarized the argument this way: “Appointing a special master to determine core functions and to pay for those functions without an appropriation is far removed from what our system is supposed to be, which is that the people elect a Legislature to decide how its money will be spent.”

The argument didn’t fare well, but it was never decided on its merits by anyone other than Judge Johnson. Kaardal first asked the state Supreme Court to hear the case, but they told him to start over with Johnson. Johnson affirmed his original actions. Kaardal appealed.

A three-judge panel of the Minnesota Court of Appeals did consider the case but rejected it on technical grounds, essentially that it should have been filed when the shutdown was still under way and the unappropriated money was still being spent. Since the Legislature had already ratified what was done, the court wasn’t going to get involved. Or, in legalese:

“A controversy that has been resolved by the legislature in the exercise of its constitutional powers is nonjusticiable because it fails to present a redressable injury that is capable of resolution through the judicial process.”

Kaardal argued publicly at the time, and ever since, that the court left open the question of how it would have ruled if the issue had been raised when Hatch and Pawlenty first sought the “special master” order, or while the shutdown (and the spending of unappropriated funds) was still occurring.

In fact, the Appeals Court almost invited the legislators to try again — but to do it earlier in the government shutdown process. Wrote the three-judge panel:

“We recognize the legislators’ compelling argument that the commissioner’s court-approved disbursements interfered with their appropriations power and improperly affected the dynamics of the legislative process during the special session. If so — and we do not decide the issue — then the damage has already been done, and it is not subject to judicial redress or remedy at this point in time...

“If the events of 2005 repeat themselves, the legislators can raise a timely challenge to seek a judicial remedy for their asserted injury.” (Emphasis added.)

Kaardal told me this week that he has been in touch with some of his clients from the previous round, and he seemed to think it is highly likely that, if the process continues to point toward a shutdown, and if the governor and attorney general seek a court order on “core functions,” that there will be a timely challenge. He noted that in the 2005 round, that governor/attorney general court petition was filed on June 15, which is less than two weeks away.

Making shutdowns easier and more common
Did you catch the reference that the Appeals Court made two paragraphs up about how the special master/core functions arrangement may have “improperly affected the dynamics of the legislative process?”

That, apparently, means this: If the governor and the Legislature are facing down the barrel of the chaos that might ensue if the state truly shuts down — not knowing how crazy things could get nor whom the public would blame for it — they have an extra incentive to compromise their differences and make a deal.

If, on the other hand, there is a court order in place to allow money to flow from the treasury and core functions to continue, the urgency of compromise may decline.

Winkler alluded to this when I spoke to him the other day. If a “shutdown” means a few functions, like access to state parks and the ability to take drivers’ license exams, if the main people inconvenienced by a shutdown are state employees who go on furlough, then shutdowns will become more frequent and longer.

“We shouldn’t come to get comfortable with government shutdowns,” Winkler said. “That’s really, truly dysfunction. A shutdown should be seen as thermonuclear.” That will make them shorter and less frequent.

Peter Wattson, who worked for the Legislature for 40 years and was counsel to the Minnesota Senate in 2005, wrote a 2007 paper tracing the history of Minnesota’s “power of the purse,” but much of it seems to be a reaction against the 2005 shutdown, and parts of it read like a brief against the idea that the courts are authorized to step in as the appropriator of last resort in the event of a shutdown. One of his chapters is titled “The Judicial Branch Is Not Authorized to Exercise this Legislative Power.”

Another section is titled “What Constitutes a ‘Core Function’ is a Nonjusticiable Political Question,” which certainly seems to argue that Judge Johnson should not have accepted supervision of the “core function” question but left it up to the political branches, the Legislature and the executive, to work that out in the normal interplay of legislative power and veto power.

Wattson also endorsed the idea that the 2005 shutdown lasted longer because the “core functions” approach made it easier on everyone. “With the court’s order to fund ‘core functions’ in place, the Governor and legislative leaders knew that the adverse consequences of failing to reach an agreement would be limited,” Wattson wrote. “They could afford to hold out a while longer, and they did.”

Interestingly, Wattson finally left the Legislature in January and is now general counsel to Gov. Mark Dayton. So if we reach that point, the constitutional argument against what happened in 2005 will certainly be available within Dayton’s inner circle.

Friday: Will either party press the issue this time?