A brief, filed Friday on behalf of the Minnesota House of Representatives, argues that Gov. Pawlenty’s use of his unallotment powers at the end of the 2009 legislative session were illegal and unconstitutional.
The brief, written by Joel Michael of the House Research Department, focuses strenuously on the argument that while unallotment is possible when there is an unanticipated revenue shortfall during a biennium, the shortfall on which Gov. Pawlenty based his unallotment actions were anticipated, known and, in fact, caused by Pawlenty’s own decision to veto a tax bill that would have prevented the shortfall, at least at the time that he vetoed it.
The amicus (or friend of the court) brief was filed Friday with Ramsey County Judge Kathleen Gearin who is considering a request for a temporary restraining order (TRO) that would overrule a portion of the uanallotments. The House Rules Committee voted to file the brief Monday morning, just as Gearin was preparing to hear arguments on the TRO matter. Gearin has not ruled on the TRO nor said when she will, but it’s quite likely that she was holding off, at least partly, so she could hear from the House on the matter.
The House’s entry into the case may also raise the stakes, at least politically, around Attorney General Lori Swanson’s decision to represent Pawlenty in the unallotment case. Her office has pointed out that previous attorneys general have represented previous governors in previous unallotment cases and that the AG is expected to represent the governor. The amicus brief does not make the Legislature a direct party in the case, although it could be viewed as a step in that direction. If the argument ever becomes a direct one between two branches of the state government, it will be awkward for the AG to be on one side of the case.
The brief, in brief
Michael’s brief cuts to the heart of the widespread outrage among DFL legislators at what they viewed as an unconstitutional power grab by Pawlenty so that he could balance the budget without signing into law any new taxes.
The brief focuses closely on the issue what the 1939 statute, which gave Minnesota governors the unusual power of unallotment, meant when it said that the power is triggered when a determination is made that “probable receipts for the general fund will be less than anticipated.”
Because of the bad economy, each of several revenue projections heading into the 2009 session showed less revenue than the previous projection. But when the Legislature passed the final spending and tax bills, they were operating on the then-current February 2009 revenue estimate. If all of those bills had been signed, the budget would have then been balanced (although the revenue picture has continued to deteriorate since then and the state is now preparing to borrow money in order to pay its bills.)
The most immediate cause of the imbalance when Pawlenty announced his intention to unallot was therefore Pawlenty’s own decision to veto the tax bill. (That’s a power he unquestionably has.) Furthermore, in designing his unallotments, Pawlenty continued to rely on the February revenue estimate.
Pawlenty claims there was an unanticipated revenue shortfall when he acted, because the February estimate was lower than the previous November 2008 forecast. The brief argues the shortfall cannot be called unanticipated because the Legislature had the up-to-date forecast when it passed bills that would have created a balanced budget and Pawlenty relied on the very same forecast in deciding how much to unallot.
If the courts allow Pawlenty’s unallotments to stand, they will have transferred unprecedented power over budget-making from the Legislature to the governor, in violation of the separation of powers established by the Minnesota Constitution, the brief argues.
One simple illustration is given in the brief of how the balance would be altered. The governor is empowered to veto appropriations with which he disagrees, but the Legislature is empowered to override those vetoes. This didn’t happen in 2009, but suppose it did. If the governor has the power he has asserted, he would only have to unallot the appropriation which would have the effect of overriding the override. Thus the final word on the matter would have been transferred from the Legislature to the governor.
The full brief is here for those who would like it. Below are several excerpts for those who want more than my little summary but are not willing to read a 34-page brief.
Minnesota Statutes Section 16A.152, subdivision 4 (the “unallotment law” or the “unallotment statute”) grants authority to the executive branch to reduce allotments of appropriations to respond to an unanticipated reduction in state revenues and a resulting state budget deficit. This extraordinary authority is intended to address financial emergencies in the state budget.
Because the unallotment law grants crucial budget powers to the executive, the House has a strong interest in ensuring that the unallotment law not be used (1) in circumstances where it does not apply or (2) to rewrite, modify or subvert the budget priorities that have been enacted into law pursuant to Article IV of the Constitution. Moreover, if the unallotment law authorizes the executive to take the actions it has in this case, the House’s legislative powers related to enacting the state budget may be substantially impaired or subverted.
The language of the statute requires the commissioner to determine that probable receipts will be “less than anticipated” before the unallotment power is triggered. This plainly has not occurred, since Defendants and the legislature have used exactly the same estimate of probable receipts – the February 2009 MMB revenue forecast – in preparing and enacting the state budget and in imposing Defendants’ unallotment.
Nor can Defendants‟ apparent approach of using forecasts of earlier reductions (i.e., the forecast drop in revenues between the November 2008 and February 2009 forecasts) be used to satisfy the statute; the baseline or reference to measure when revenues are “less than anticipated” must mean the numbers used to write the budget, not some earlier forecast.
Under any reasonable construction of the language, probable receipts cannot be less than anticipated if the same amount of receipts was used to write the budget and to make the unallotments. To interpret the law otherwise would require the Court to grant the executive unfettered discretion to determine when unallotment may be used. Doing so is not legally justified or consistent with constitutional principles.
First, the only reasonable interpretation of the meaning of “anticipated” receipts under the statute are the receipts that the legislature and executive branches used to write the budget. The statute does not explicitly define or state how to determine “anticipated” receipts (e.g., by reference to a mandated revenue forecast or something similarly specific) or say who did the anticipating or when it was done. This likely was simply because the 1939 legislature thought it was obvious – i.e., it must be the amount that the legislature (and governor) used to enact the budget or appropriations, which can no long be funded because revenues are now expected to drop. Certainly neither the legislature nor defendants were anticipating the level of receipts in the November 2008 forecast by March (when the Governor‟s supplemental budget was submitted) or in May when the legislative budget bills were enacted. Both of those actions were based on the February forecast. Earlier forecasts of revenues are not relevant to budget-setting.
Defendants‟ position does not follow the literal or plain language of the law. Rather, their interpretation reads a great deal of content into the word “anticipated” – e.g., it implicitly reads the statute to mean what the executive anticipated (the legislature never enacts a biennial budget based on the November forecast) at some prior point in time that the executive chooses. In effect, Defendants are arguing for granting vast discretion to the executive branch in deciding when it can use the unallotment power. The statute should not be read in such an expansive manner, given the sweeping nature of the power (no standards or restrictions as to which spending may be cut or by how much and, according to Defendants, the ability to rewrite the terms of statutory programs in effectuating those reductions). The Court should carefully consider whether it wants to grant the executive branch such sweeping budget powers.
if the law authorizes defendants‟ actions, it would even permit the executive to effectively overturn a duly enacted appropriation that was re-passed over an item veto by the governor.