Judge Gearin allows some state functions to stay open, but this shutdown will sting

The big shutdown ruling from Ramsey District Court Chief Judge Kathleen Gearin is in. The full order is here.

Gearn has ruled that many, but far from all, state government functions can continue to function during July even if the budget impasse is not resolved.

Gearin accepted the main argument made by Attorney General Lori Swanson that – as happened in 2005 – the court has the authority to keep “critical core functions” of the state open. And she rejected Gov. Dayton’s request that the court issue no orders and allow him to operate portions of the state government under what he claimed were “inherent” emergency powers of the governor.

But as far as what will stay open and what will close, Gearin adopted with a few changes the list of critical services that Dayton had submitted.

She appointed former Supreme Court Chief Justice Kathleen Blatz as “special master” to oversee the detailed spending decisions that will arise as this order is put into practice. But it appears that Blatz have fewer decisions to make than the special master did in 2005, because Gearin has gone further in defining what should and what should not be considered core functions.

It will take a while to sort out precisely what is open and closed. Gearin sought a middle ground between those urging a strict construction of the constitutional “no-spending-without-appropriations” language, and the soft shutdowns of the past in which only state parks, highway rest stops and drivers’ license exams seemed to be the only things that were shut down.

Although authorizing a lot of spending without appropriations might be deemed a usurpation of the Legislature’s constitutional power over the purse, Gearin noted that neither the state House nor the Senate had made the argument that she lacked authority to keep the core functions of the state open.

Update 1:
Assuming the Legislature and the governor do not work out a last-minute deal, Gearin’s order will take effect July 1 (that’s Friday) and  remain in effect until July 31, unless extended by the court.

If the shutdown runs on for even a week, I expect there will be further court filings challenging portions of Gearin’s approach.

Here are some concrete examples from the ruling:

Gearin agrees with Gov. Mark Dayton that these core functions must continue:

  • “Basic custodial care” for prison inmates, residents of state-operated regional treatment centers, nursing homes, veterans homes and residential academies;
  • Maintenance of public safety and immediate public health concerns;
  • Payment of benefits and medical services to individuals;
  • Essential elements of the financial system of the government;
  • Maintenance of computer systems, internet security.

Gearin also ruled that the “supremacy clause” of the federal constitution means that the state must keep paying its share of several big state-federal matching fund programs, such as food stamps, Medicaid and Temporary Assistance to Needy Families (TANF). Basically, Gearin ruled, by originally agreeing to participate in those programs, Minnesota incurred an obligation to fulfill the terms of its participation.

The idea that the state prisons or state mental hospitals would close always seemed unthinkable, and now it’s official. The maintenance of benefit payments, which I presume includes, for example, unemployment checks and various forms of assistance to the poor, and especially health benefits, is a big finding and will limit the immediate impact of the shutdown on the sick, elderly and most economically vulnerable.

Don’t let a bridge fall down, but don’t build a new one
Gearin specified that road construction projects, including those for which contracts have been let, cannot continue unless the money to pay for the projects has been appropriated. I’m not clear at the moment on how big an impact that will have on construction. But many of them will shut down, even if only because state employees thart are necessary to keep them going will be laid off.

Responding to an argument by the Minnesota Association of General Contractors to the effect that all construction contracts must continue “due to perilous economic condition of the State’s construction industry,” Gearin wrote that if the industry loses money, if the state ends up paying more to stop and then restart construction projects, if construction workers get laid off and the temporary shutdown of projects inconveniences Minnesotans in the affected areas, those are not good enough reasons to spend unappropriated funds. If those bad things happen, it will be because the Legislature and governor couldn’t agree on a budget.

Even more specifically, responding to an argument that the replacement of the Lafayette Bridge in St. Paul must continue because the current bridge is unsafe, Gearin wrote:

“The court agrees that any part of a contract which keeps the bridge from collapsing does constitute a critical function that needs to be funded. [The court] does not agree that replacement of the bridge constitutes a critical core function necessary to protect the life, health and safety of its citizens.”

Update 2: Legal analysis
(Sorry if this is disjointed. I’m trying to get the elements of the ruling up as fast as I can digest them.)

Article XI, Sec. 1 of the Minnesota Constitution says: “No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law.” Gearin quotes this repeatedly and says that she is trying hard to respect that provision. But “the Minnesota Constitution must be read as a whole and each provision interpreted in the context of the entire document and the provisions of the U.S. Constitution.”

The reference to the U.S. Constitution means that state functions that are necessary to protect the federal constitutional rights of Minnesotans must be preserved. An example (this comes from me, not from Gearin) would be the federal guarantee that prison inmates not be subjected to cruel and unusual punishment. If the state stopped feeding the prison inmates because it had no appropriated funds with which to do so, it would violate that federal constitutional provision.

Gearin also uses the “supremacy clause” of the federal Constitution to justify continuing state-spending on state-federal programs, as I mentioned above.

But the really big rationale for keeping many state functions going is the “Minnesota Constitution must be read as a whole.” Since the Constitution sets up the executive branch, so the executive branch must be allowed to at least perform its critical core functions.

Gearin, as I mentioned above, has mostly accepted the governor’s definition of critical core functions. She says explicitly that her list is not as expansive as the definition originally suggested by Attorney General Swanson. Swanson never actually submitted a concrete list of core functions, but proposed, at least originally, that each executive branch agency decide for itself what it’s core functions are.

In her order, Gearin reqpeatedly states, as she did in court last week, that the court’s power is not sufficient to keep all kinds of bad things from happening to Minnesotans as a result of a shutdown and that it is the job of the Legislature and the governor to create a budget based on what the should do to help the economy or to help needy people. Here’s a sample, in which she refers to various letters and briefs she has received from entities arguing that the programs on which they depend will be harmed in the shutdown:

“The briefs and letters submitted represent many programs, agencies, and contracted private businesses that will be significantly and adversely impacted by the failure of the executive and legislative branches to successfully enact laws appropriating funds. It has been argued compellingly that many of these programs and entities are beneficial to the people of the State, provide services that may aid citizens in working their way out of poverty, may provide jobs for private industry, may improve the state infrastructure, may result in benefits that help working class people obtain and maintain employment, and provide a myriad of other benefits to the State. In light of Article XI, the Court believes that the negative impact of a government shutdown on these programs does not justify a court in over-extending its authority. In light of Article XI of the Minnesota Constitution, the Court must construe any authority it has to order government spending to maintain critical core functions in a very narrow sense. Discretionary appropriations are the province of the Legislature, not the courts.”

Comments (33)

  1. Submitted by Neal Rovick on 06/29/2011 - 11:52 am.

    What would make for interesting research is whether there are links between the politics and forces of looming federal debt ceiling crisis and the Minnesota budget crisis.

    The rhetoric is almost identical in both instances.

    Is Minnesota a low-rent test plot for the politics and resolution of the federal crisis?

    Is there any closer observation and guidance by the federal level politicians and strategists in the Minnesota issues that are helping or hindering resolution in Minnesota?

  2. Submitted by Jackson Cage on 06/29/2011 - 12:02 pm.

    A horrible decision. Shut everything down. Why make this comfortable for Minnesotans? Maybe if they get to experience a total shutdown, they’ll remember it during the next election. Now Judge Gearin’s made it nice & convenient for everyone.

  3. Submitted by Richard Pecar on 06/29/2011 - 12:24 pm.

    So…does this action mean the judicial branch “created new money”? Just like the Federal Reserve System? It’s my understanding the reason the court acted in this fashion is because there is no money to pay for the programs the court is continuing?

    Or, have the courts “pre-appropriated existing money” already in the state’s coffers, and all they have done is guess what legislative branch will do?

  4. Submitted by John Ferman on 06/29/2011 - 12:31 pm.

    I hope some sharp, investigative reporter will collect information on the shutdown in human terms. Not just saying the seniors are being, but getting explicit about who, how, when, and why These visual, human faces must be used to continually confront the perpetrators in a public and personal way. The Republicans came to power with an agenda and they have gotten their way – but every coin has two sides and the public must be made to know what the Republicans have wrought.

  5. Submitted by David Greene on 06/29/2011 - 12:40 pm.

    So far (post Update 1) it sounds about right to me as far as identifying the correct things as essential.

    After perusing the ruling somewhat, here are some things that are really going to hurt:

    * Child care assistance will not be funded. This will seriously harm low-income working families.

    * Most road construction will halt. I-94 is currently torn up from 35-W to Cretin. It hurts now and will continue to hurt much longer than it would have otherwise. The Lafayette bridge replacement will largely be halted. Many projects could spill over into next season if we have a lengthy shutdown. I believe Central Corridor construction will continue as all state funding for that was appropriated in previous years.

    * Transit service is not listed as a critical service. Metro Transit has reserves that will keep it going about a month. After that, no way to get to work, doctors, etc. for many people.

  6. Submitted by Herbert Davis on 06/29/2011 - 01:07 pm.

    good reporting..thanks for getting it up quick

  7. Submitted by Claire Lundgren on 06/29/2011 - 01:29 pm.

    Judge Gearin has possibly dealt a death blow to the Racing industry in Minnesota. The tracks are private businesses that support a $2 billion a year industry in the state. The only service the government supplies to the industry is the Minnesota Racing Commission which is entirely funded by the tracks. There is no state money involved. By closing the tracks because it is not a core service, she has failed to recognise that the money to run the MRC has already been paid in advance. The state is now in a position of receiving payment for a service that is not being provided. Isn’t that fraud? Meanwhile, the horses will move to tracks in operation in order to pay for their livelihood. They won’t be able to afford to move back in sufficient numbers to sustain racing. The tracks won’t be able to hold the required meet days to be eligible to operate the card clubs and simulcasting. The tracks will close and the Racing industry and the Equine industry will be devastated. Say goodbye to a large segment of the agricultural community and the related businesses it supports. The only hope now is that the shutdown lasts only a few days. Any longer and it will be too late.

  8. Submitted by Don Medal on 06/29/2011 - 01:43 pm.

    #3-Richard: The State has money. Income and Sales taxes continue to come in. With the majority of programs shut down there will be a (very temporary) surplus even if revenue is substantially less.

  9. Submitted by Rachel Kahler on 06/29/2011 - 01:57 pm.

    @#5
    I know that Metro Transit isn’t wholly dependent on state money. However, how would funds being witheld from Metro Transit from the state affect operation in the short-, mid-, and long-term, I wonder. I ride the bus to work every day. No Metro Transit would seriously cost me a lot of money and headaches.

  10. Submitted by Brian Simon on 06/29/2011 - 02:07 pm.

    Richard Pecar asks
    “does this action mean the judicial branch “created new money”? Just like the Federal Reserve System? It’s my understanding the reason the court acted in this fashion is because there is no money to pay for the programs the court is continuing?”

    No. Neither the state of MN nor the judicial branch of the government of the state of MN has the power to print money. The problem being solved is not a lack of money, but a lack of a law directing how money is to be spent. The Legislature has the ‘power of the purse,’ meaning they write laws that dictate how the state is allowed to money. This is done with the state budget in a biannual process – the budget is set for two year cycles (a biennium). The last budget that passed will expire tomorrow, June 30, 2011. The legislature, with the minor exception of a small ag bill, has not budgetted any money sheduled to be spent on July 1, 2011 or after.

  11. Submitted by Paul Udstrand on 06/29/2011 - 02:15 pm.

    //By closing the tracks because it is not a core service, she has failed to recognise that the money to run the MRC has already been paid in advance.

    “Small guvmmint” comes to horse racing. it wasn’t the judge that delivered this blow, it was Republican intransigence. Maybe Dick Day should call his colleagues and tell them to pass some budgets the governor will sign.

  12. Submitted by Bernice Vetsch on 06/29/2011 - 02:24 pm.

    Neal (#1) — The Minnesota actions and those in Washington as regards the debt ceiling both arise from the philosophy of Ayn Rand and the Chicago School of economic thought led by Milton Friedman. The anti-tax/anti-government groups (Americans for Tax Reform and the Leave Us Alone Coalition) founded by Grover Norquist, creator of the Taxpayer Protection Pledge, greatly influence right-wing thought.

    State Senator John Marty notes in his latest Apple Pie essay (www.applepie.org) that “Norquist is not an insignificant figure. He founded Americans for Tax Reform, and is a key strategist behind the Republican Party attack on government. This assault on government is not a compassionate attempt to serve the public good. Norquist says, ‘Our goal is to inflict pain. It is not good enough to win; it has to be a painful and devastating defeat. It is like when the king would take his opponent’s head and spike it on a pole for everyone to see.’ ”

    Looks like a lot of pain to me.

  13. Submitted by Eric Paul Jacobsen on 06/29/2011 - 02:31 pm.

    I have a modest proposal to amend the Minnesota constitution.

    Whenever a state budget is not passed on time, due to disagreement between the executive and the legislature, the previous budget will be automatically renewed.

  14. Submitted by Hiram Foster on 06/30/2011 - 07:14 am.

    I think the news media should do more about providing answers to stupid questions, for which no one seems to have the answers.

    1. What is a state budget?

    2. Why, exactly, does the government have to shut down?

    3. What does the state spend money on?

    Does anyone else have a stupid question? One that asks for some piece of information that everyone should know but doesn’t?

    Throw it out there. We won’t judge.

  15. Submitted by Tony Wagner on 06/29/2011 - 03:12 pm.

    #13: “Whenever a state budget is not passed on time, due to disagreement between the executive and the legislature, the previous budget will be automatically renewed.”

    Sounds good in theory, but then whichever party finally gets a budget passed has no incentive to negotiate with the other party on the next budget. There would be stalling and stonewalling even worse than the current situation. Plus, the previous budget may not be balanced in the next biennium, which would violate an already existing constitutional requirement.

  16. Submitted by jody rooney on 06/29/2011 - 03:33 pm.

    It is good to know Mr. Black that even professional writers make typos and tense mistakes when on deadline. It makes me feel better about my writing mistakes.

    Eric #13 I think we should go one step further and draft a real constitutional amendment if they fail to pass a budget in the allotted time that is balanced using state generated numbers and no creative accounting shifts they should all stand for re election 30 days after the end of the regular session. That way there would be a whole new crop of legislators before the end of the fiscal year.

    While Clair Lundgren is one of the nicest people in racing I am not exactly sure why racing would end. Wagering would end but racing could continue.

  17. Submitted by Jackson Cage on 06/29/2011 - 04:03 pm.

    Eric, we have no time for such nonsense. We’re too busy amending the Constitution to protect marriage.

  18. Submitted by Dan Landherr on 06/29/2011 - 04:05 pm.

    #2 – A horrible decision. Shut everything down.

    I hope you’re not serious. Creating anarchy so politicians can prove a point is a terrible idea. A hard shutdown would have been followed by Dayton calling in the National Guard to keep order.

    This shutdown will be plenty uncomfortable for many citizens of this state.

  19. Submitted by Lora Jones on 06/29/2011 - 05:50 pm.

    #17. I agree that this “partial” shutdown will be plenty uncomfortable. Road construction season being put on hold will, of itself, cause plenty of discomfort. Nearly 30 miles of one-lane each way traffic on 35W over the 4th — when all good Rangers and a whole lot of City dwellers head North — very, very ugly. No State parks or campgrounds — well, I suppose that might alleviate some traffic. Won’t do much for the anger, though.

    I’m very glad that people in nursing homes and otherwise on Medicaid will still get care, and their providers and caregivers the reassurance of eventual payment. Even so, having some inkling of just how many services (mental health, adult day-care/respite, STI testing) are, like road construction, contracted, and of necessity suspended — well, even Mr. Michele Bachmann may suffer

  20. Submitted by David Greene on 06/29/2011 - 07:48 pm.

    @Rachel (#9)

    In the short term (less than one month) there should be no effects on transit. After that, no one really knows. I suppose some level of service can be kept going based on the ~30% of funding from fare boxes but that kind of cutback is unprecedented here or anywhere else in the country.

    It gets even more ridiculous when you consider the federal government requires public hearings on major transit service changes. This would, I think, qualify as “major.” To date I have heard no talk of any such hearings.

  21. Submitted by Sharon Anderson on 06/29/2011 - 08:33 pm.

    http://www.mncourts.gov/district/2/?page=4446

    Government4LawyersBY Lawyers Denying Citizens the Right “dueprocess” to E-File

    Affiant has to re:read Gearins Order re: Separation of Powers MN Art. III not in the US Const.?
    Separation of powers under the United States Constitution …en.wikipedia.org/…/Separation_of_powers_under_the_United_State… – CachedSimilar
    This article refers to the separation of powers specifically in the United States. For the article on the theory of separation of powers, see: separation of …

    Legislative power – Executive power – Judicial power – Checks and balances

  22. Submitted by Doug Cody on 06/29/2011 - 08:55 pm.

    We’ve been on the other side of the looking glass for so long, no one seems to take issue with the Judicial branch usurping the authority of the Legislative and Executive branches with this ruling.

    Setting budgets and directing spending is the purview of our elected officials… and NONE of the business of a judge. Is there nothing a jurist doesn’t think that he or she has authority over today?

    This ruling should be ignored – if state operations shut down, it is an issue between the voters and those they voted into office. The effects of a shutdown should be fully felt by the people… that’s the way governments work.

  23. Submitted by Paul Udstrand on 06/29/2011 - 08:59 pm.

    Clair,

    I’m sorry if my comment (#11) came across as harsh, I don’t wish hardship on anyone.

    Bernice in #12 raises an important issue. Basically the Republican agenda for the last 40 years has been to deliver “shock therapy” via a standard shock doctrine to the US. It’s been a disaster elsewhere mainly resulting in the establishment of totalitarian regimes. Naomi Kline does a good job of critiquing this in her book “The Shock Doctrine”. I recommend it.

  24. Submitted by Eric Paul Jacobsen on 06/29/2011 - 10:33 pm.

    Thank you for your critique, Tony Wagner, and for your comment, Jody Rooney.

    I now agree with Jody Rooney’s modest proposal to amend the Minnesota constitution. It wouldn’t prevent government shutdowns, but it would empower the voters to “share the pain” with the politicians who caused it.

    I also favor Ranked-Choice Voting, which might give us a better mix of elected officials the next time around.

  25. Submitted by Claire Lundgren on 06/29/2011 - 11:52 pm.

    In response to Jody Rooney’s query about why racing will end. Even if the horsemen would be willing to race without purses ( which would be foolhardy to use up their horses with no chance of gain) racing at the track would still fall under the jurisdiction of the state vets and stewards. And even if that weren’t true, with no purses there is little reason to race at Canterbury when there are other tracks that are conducting races in other states. The horsemen will simply leave with their horses to pursue a living. And it is too costly to return. Shipping horses is not cheap. And neither is moving all the barn hands and equipment. There are about 1300 horses on the backside and they are all there to make money. A lot of jobs will follow them taking some serious money out of Minnesota’s economy.

  26. Submitted by Claire Lundgren on 06/30/2011 - 12:00 am.

    I would like to point out to Mr. Green that money that was appropiated earlier for road construction and transit will not be available to those projects as there will be no one at the capitol to cut the checks. This is what is happening to Canterbury. The money that goes to the state to oversee the tracks is already paid. Because the MRC has been ruled non-essential, there is no one to disperse that money to the state employees at the track. Thus, it is effectively “Shut Down!”

  27. Submitted by Claire Lundgren on 06/30/2011 - 12:11 am.

    I have a question for anyone who has an answer. If the Government is unable to dispense money during the shutdown, how is it able to collect money? Who is going to process taxes collected? Should this mean that sales taxes are suspended as long as the shutdown is underway? By reason, it would only be fair. If the Government can withhold money to pay for services, why can’t the citizens withhold payment for services not rendered?

  28. Submitted by Hiram Foster on 06/30/2011 - 06:20 am.

    As I understand it, as people who should know more about this stuff than I do but maybe don’t, have explained it to me, the problem isn’t with putting a budget in place. There is a budget in place now that mandates spending at 39 billion dollars. The problem is that the state doesn’t and won’t have 39 billion dollars to spend at current tax rates. Revenue are projected to come in at 34 billion dollars, and that’s the 5 billion dollar deficit.

  29. Submitted by Paul Brandon on 06/30/2011 - 10:43 am.

    @ Claire #26:
    We are a government of laws (which may or may not be fair). These laws are made by the elected legislators, executed by executives (governors, presidents, etc) and overseen by the courts.
    If you do not think that a law is fair, talk to your local representative.
    If you do not think that that individual represents your interests; work to get another one elected.
    If you think that a law is not consistent with state and federal constitutions, bring it to the courts (hire a lawyer).
    That is our political system of checks and balances.

  30. Submitted by Paul Brandon on 06/30/2011 - 10:50 am.

    On ‘racinos’:
    There’s an interesting contradiction here:
    The race tracks are described as private business, which means that governments cannot shut them down unless they are in violation of a law.
    The fact that they are apparently managed by a state agency compromises this status.
    It would appear that they are in fact a heavily subsidized private/public chimera, with the assumption that they bring more public and private income to the state than they receive in public support.
    This in turn is usually based on the questionable assumption that money spend at the tracks would NOT be spend on something else in the state if the track did not exist.
    In fact; gambling and entertainment spending is fungible; if it is not spent on one thing than it will be spent on something else that is similar.
    So, even if withdrawing public subsidies for gambling resulted in some race tracks being closed, the total state revenue loss would not be as much as track spending.

  31. Submitted by Brad Lundell on 06/30/2011 - 11:48 am.

    Great discussion.

    Eric (#13), in response to your suggestion that you later amended after comments by Tony (#14) and Judy (#15), I would add that if we simply reverted to the previously passed budgets in the event of a shutdown, it would enhance the power of “previous legislatures” in that dawdling, and refusing to settle, would ensure the status quo. In government, “for every accelerator, there’s a hundred set of brakes,” and this could be one giant emergency brake.

    You’d be handing out a couple hundred fiddles and get to watch Rome burn while a cacophonous symphony of public officials played in the background, especially when government was divided, as it is now.

    Judge Gearrin has clearly attempted to achieve the Solomonic with her decision, but if this drags on for awhile, my guess is we’ll see court challenges from both ends of the argument; those contending that more services should be essential and those who believe no expenditure of state revenue can proceed without specific legislative authorization.

    I almost love reading the comments as much as the articles.

  32. Submitted by Claire Lundgren on 07/01/2011 - 10:40 pm.

    Paul Brandon (#30)

    I am amazed that you are under the impression that the tracks are a “heavily subsized” segment of the economy. The tracks receive NO money in any form from the state or any special favors unless you can call the licenses, which they pay for, a special favor. The MRC, that regulates the tracks, is funded entirely by the tracks with money put into escrow ahead of the time period they work. In other words, they are paid up front. Canterbury is a private corporation that is traded on the stock exchange. Because the fees have already been paid for this period, and the MRC dispenses the funds without involving the state governments services, it would appear to be totally an arbitrary ruling to shut the tracks down as being non-essential services. The true non-essential services are all based on support money they are being provided for by the state.

  33. Submitted by Paul Brandon on 07/02/2011 - 03:10 pm.

    @ Clair #32:
    Please reread my post.
    and…. what is your connection to Canterbury?

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