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Primer on unallotment: How it works and why it’s done

Instead of a flurry of negotiations between Gov. Tim Pawlenty and lawmakers, Session 2009 might end without a deal, what with the governor’s announcement last Thursday that there would be no special session and that he would use his powers of unallotment to balance the state’s budget.

“The governor thinks he’s a dictator,” Rep. Tom Rukavina, DFL-Virginia, said at the Capitol Saturday. “He’s like George W. Bush. He’s ‘the decider.’ For him to abuse unallotment is unconscionable, especially for a guy who never got a majority of the vote.”

Pawlenty’s margins of victory in his two gubernatorial campaigns notwithstanding, Pawlenty will use two methods to bring the budget deficit to zero, making up some $2 billion between his desires and what the Legislature has passed: line-item vetoes and the dreaded unallotment.

What’s the difference?

“I want to draw a contrast between the line-item veto and unallottment,” David Schultz, who teaches government and politics at Hamline University, said Monday morning by way of a primer. “A line-item veto applies when the Legislature passes a budget bill and it goes to the governor. He can strike money before it is allocated.”

Unallotment, according to Schultz, occurs because of the requirement in Minnesota to balance a budget every biennium. “After money has been appropriated, the governor has the power to rescind the money,” he said

As Schultz figures, it’s a “unique power in the state of Minnesota,” adding that to his knowledge, no other state in the union has such a technique. Schultz pointed out that Richard Nixon used similar methods as president in the 1970s, something called “impoundment.” Congress later outlawed the tactic.

So, unallotment and similar methods are rare in politics, and also in the state of Minnesota. Only two other governors, Al Quie and Rudy Perpich, have used it; this will be Pawlenty’s third go-round.

Outlined by state statute
So rare, in fact, that by Sunday, a memo (PDF) was circulating around Capitol via email that sought to clarify what the heck actually happens when unallotment is used.

Titled “Executive Branch Power to Reduce Spending to Avoid a Deficit,” the 17-page missive, put together in March of 2008 by two legislative analysts, “provides background on the workings of and legal requirements under the unallotment law.”

The procedure exists under state statute, and “the first prerequisite to unallotment is that the Commissioner of Finance ‘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.”

Then the ball is in the governor’s court:

“After the Commissioner of Finance determines that the amount available for the biennium is less than needed, the governor must approve the commissioner’s actions before the commissioner can either reduce the amount in the budget reserve or reduce allotments.”

The Legislature is consulted but does not have any power or ultimate say in the governor’s actions. The process starts at the beginning of the next fiscal biennium, which means that Pawlenty won’t enact anything until July 1. And what he’ll do is anyone’s guess.

“Depending on what he does with line-item vetoes, I figure we’ll see anywhere from a half a billion to $2 billion in unallotments,” Schultz said. “It’s unprecedented in dollar amount and in willingness to use it.”

Is it good policy or politics?
Schultz points out that unallotment is on the books for “emergency conditions” in which “the Legislature can’t do its job,” such as a budget forecast that comes out when lawmakers aren’t in session.

But in Schultz’s opinion, Pawlenty is “creating the emergency conditions that allow him to use it.”

“He appears to not want to negotiate in good faith,” Schultz offered. “Working with the Legislature is supposed to be a cooperative venture, not a take-it-or-leave-it one.”

Schultz also thinks that while the announcement of unallotment came relatively early, Pawlenty also used it as a game-changer relatively late.

“He used it so late in the negotiations, it’s impossible for the Legislature to react,” Schultz said. “Coupled with his decision that there will be no special session, the Legislature is not in a position to act.”

That aside, many are cheering Pawlenty for taking control of a messy session and a historic budget shortfall. Certainly there are reasons Pawlenty is at this point: The DFL leadership could not come up with a palatable budget plan in four months of work.

“It’s not good governance because it undermines the job of the Legislature,” Schultz said. “Is it good politics? We could have a debate on that.”

Ultimately, Pawlenty could win kudos on a national stage for not directly raising taxes and standing up to Democrats in his home state — something that would play well should Pawlenty make a run at the presidency. But at home, his go-it-alone stance means he’ll take all the heat for making unpopular cuts.

“Is it good for Pawlenty?” Schultz asked. “Only in the sense in that he won’t run for governor again. I think this is a signal that he’s not running for a third term.”

And, of course, DFLers have no recourse. “They’ll probably spin it like it’s King Tim,” Schultz concludes. “I don’t think he cares.”

G.R. Anderson Jr. covers politics, the state Capitol and issues related to public safety.

Comments (8)

  1. Submitted by Kevin Slator on 05/18/2009 - 01:32 pm.

    There should not be a lot of disagreement about this: “unallot” and “unallotment” are not words. They’re made up. Let’s unuse them.

  2. Submitted by Greg Kapphahn on 05/18/2009 - 01:39 pm.

    So… Governor Pawlenty, this has all the ring of another of your typical adolescent tantrums… You won’t let me have my way, so I’LL SHOW YOU! We previously saw a flash of your adolescent nature after the gasoline tax override.

    But do you really think throwing the entire state of Minnesota and its duly-elected house and senate DFL majorities over the side in order to win a bridge officer’s position on the Titanic (the National Republican Party) is a smart move?

  3. Submitted by Rick Prescott on 05/18/2009 - 02:25 pm.

    Given the Governor’s intransigence on revenue, the best political course for the Democrats (short of overriding his vetos) may be to simply stop negotiating and let him have at it.

    Yes, it could be devastating for the state, but any deal they make now will likely be only marginally less devastating. The deals available to the Democrats at this point are deals they simply should not make.

    Pawlenty surely realizes that it will be substantially more difficult to run for higher office as an ex-governor. This means that unallotment represents political opportunity for Democrats in 2010.

    That’s a cold dish, but it is the delicacy the Governor has chosen to serve to Minnesotans.

  4. Submitted by Andrew Kearney on 05/18/2009 - 03:22 pm.

    Excellent comments by all. This move by Pawlenty has the whiff of being unconstitutional. Not the technical legal aspect but that fundamental contract between the governed and the governors-the sense of legitimacy that is a must for all governments not matter what the form of government. Pawlenty has made Minnesota look and more importantly act like a banana republic. This may be his lasting legacy-the demeaning of Minnesota’s constitution. I strongly condemn him for that

  5. Submitted by Eric Ferguson on 05/18/2009 - 04:21 pm.

    Hmm, an executive who refuses to just pretends to negotiate, refuses to compromise, and acts unilaterally in legally questionable ways …

    Oh wow, “Pawlenty” is Minnesotan for “Bush”!

  6. Submitted by John Wiedenheft on 05/18/2009 - 05:04 pm.

    “As Schultz figures, it’s a “unique power in the state of Minnesota,” adding that to his knowledge, no other state in the union has such a technique.”

    As a former resident of Iowa and graduate of a state college, I’ll point you to this from the President of the University of Northern Iowa:

    ” November 21, 2008
    A budget message from President Allen

    Dear faculty, staff and students:

    I know that the constant information and speculation about the state of the U.S. economy has all of us concerned about what impact the economic downturn will have on the University of Northern Iowa, especially in light of yesterday’s Des Moines Register article headlined “State to cut up to $40 million.”

    Even though my background is in economics, I recognize that none of us can be sure of what lies ahead. It appears the state’s three public universities and two special schools will be asked to return $7 million of their fiscal 2009 state appropriation. UNI’s share would be just over $1 million. The Cabinet and I are developing plans to handle a reversion of this magnitude.”

    Now, I don’t know if this return of previously appropriated monies is similar in law, but it seems very similar in principle.

  7. Submitted by William Wallace on 05/24/2009 - 11:54 pm.

    Talk about a lop-sided article.

    The legislature knew this was an option all along. They failed to do their job, and so the governor will do it for them.

  8. Submitted by Lars Nelson on 06/09/2009 - 03:40 pm.

    Yes John, you are in fact right. Iowa, as well as most other states, have unallotment statutes. However, these statutes are more typically referred to as allotment reduction statutes. More so, they are typically not, if ever, used in the manner that Pawlenty wants to. I am not sure why Professor Schultz came to the conclusion he did.

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