Unallotment ruling may have turned Minnesota’s recent political gridlock into new political chaos

Gov. Tim Pawlenty

MinnPost photo by Craig Lassig
Gov. Tim Pawlenty

The ruling of a Ramsey County District Court judge has turned Minnesota’s recent political gridlock into new political chaos.

Wednesday’s decision by Judge Kathleen Gearin that Gov. Tim Pawlenty overstepped his executive powers by his pre-emptive use of unallotment may mean that the governor and the Legislature will be trying to complete work traditionally done in June in February.

The governor announced this morning that his office will appeal the judge’s ruling, saying she “inserted herself into the middle of a political dispute” and didn’t properly interpret his unallotment powers granted by statute.

But it’s unclear how long an appeals process might last. In the meantime, Pawlenty said he would “continue” to work with legislative leaders on budget problems that just keep getting worse.

Pawlenty appealing ruling and not budging on taxes
But he’s not budging from his no-new-taxes stance.

“I’m going to continue to fight against increased taxes,” Pawlenty said. “I’m going to continue to fight against increased government spending, and I’m going to hold state government accountable to live within its means.”

As a result, resolution never seemed further away.

It’s also become ever harder to determine what separates political ambition and what’s best for the state. Several key players — the governor, House Speaker Margaret Anderson Kelliher and Senate Tax Committee Chairman Tom Bakk — either are seeking higher office or, in Pawlenty’s case, widely believed to be seriously weighing such a move. Who can yield in that environment?

“I’d hoped we’d be able to get out of there [the Capitol] in a hurry this session,” said Rep. Tom Huntley, DFL-Duluth. “I was hoping we’d be out by the end of March. Now, I’d say we could be there right up to the end of May.”

Even that might be optimistic, given how deeply both the Republican governor and the DFL-controlled Legislature are dug into their respective positions.

The judge, of course, ruled on a very small portion of the $2.7 billion cuts Pawlenty made last June through unallotment, shifts and some line-item vetoes. Gearin addressed only a $5.3 million special dietary program that Pawlenty had unalloted.

More court challenges ahead?
But there’s a possibility that Gearin’s decision to grant a temporary restraining order on that unallotment might open the door to court challenges from other programs the governor unilaterally whacked after announcing he would not call a special session to try to reach agreement with the Legislature.

For example, one of the prime targets of Pawlenty’s unallotments has been money once promised to cities through the Local Government Aid program. Will cities, which already have been cut by $64 million and are scheduled to take a $128 million hit in 2010, try to become partners in the suit that claims that Pawlenty overreached?

“Our board considered legal action last July and again in October,” said Gary Carlson, the intergovernmental relations director of the League of Cities. “In both those cases, considering the totality of everything, we decided not to intervene.”

But the judge’s ruling, Carlson said, may set the stage for the League’s board to meet again.

“We’re trying to keep this out of the political realm and just concentrate on what’s best for our cities,” said Carlson.

But keeping all of this “out of the political realm” is virtually impossible.

In some respects, Pawlenty’s unallotment approach last June made life politically easier for everyone at the Capitol.

Pawlenty got what he wanted: preservation of his image as a no-new-taxes executive.

But DFL legislators got something, too. After passing a budget, based on a combination of cuts and tax increases, indignant DFLers got to point fingers at Pawlenty for his unilateral cuts, many of which undermined programs serving the poorest of the poor. While they were tsk-tsk-ing Pawlenty, they got to get out of St. Paul without having to actually come up with a workable budget solution.

Situation more complicated than ever
Huntley, one of Pawlenty’s harshest critics, admitted that legislative jobs have become ever more complicated in the wake of the ruling.

“The [upcoming] session becomes like a special session,” he said. “Much as everyone wanted to get out early, this is a huge issue for the state. The judge made the right decision for the long-term good of the state. It’s up to us to resolve it.”

Huntley’s special interest, the General Assistance Medical Care program, was only partially touched by unallotment. Most of that $380 million program — which aided the poorest of the poor, and the hospitals that treat that demographic — was wiped out by line-item veto.

But Huntley said the DFL had come up with ways to preserve that program and still save the state money.

Much other work, however, remains to be done. In December, the state announced that the slow economy means that the current two-year budget is $1.2 billion in the red, even after line-item vetoes and unallotment. So, even before Gearin’s ruling, the governor and legislators were faced with that problem.

And the fact is the governor and many legislators will be under a microscope as never before.

“I’m sure everyone will be second-guessing everything the speaker says and everything the chairman of the Senate Tax Committee says,” said Huntley.

That’s, of course, because both are considered to be in the top tier of DFLers in the gubernatorial scramble.

“But I’m sure they’ll both do what’s in the long-term interest of the state,” Huntley said. “I’ve known Margaret for a long time. I have faith that she’ll do that.”

Not surprisingly, Huntley doesn’t have much faith that Pawlenty can budge from his long-held conviction that the budget must be balanced by cuts, not any infusion of new revenue.

“I would support some increase in revenue,” Huntley said, “but I’d be surprised if he [Pawlenty] turned into a modern version of Al Quie.”

From 1979 to 1983, Quie was the Republican governor who eventually announced that he would not seek a second term during a budget crisis. Instead, he ultimately accepted a tax surcharge to help put the state’s budget in balance.

But that was then. This is now.

A judge has ruled that the governor and the Legislature must try to settle their differences.

But Republican legislators so far are saying they support the governor, who is still saying, “No new taxes.” And DFLers are saying that cuts are necessary but must be accompanied by new revenue.

At the Capitol, the year ahead smells a lot like the old.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.

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Comments (16)

  1. Submitted by Hiram Foster on 12/31/2009 - 04:41 pm.

    This may sound like conspiracy thinking, but I suspect at least, that the DFL preferred unallotment to what seemed the only alternative, a prolonged series of special sessions in which the DFL would be demanding an unpopular tax increase. Because they didn’t want to go down that road, the DFL took a dive by putting all the spending bills on the governor’s desk at once, thereby losing all leverage to a governor who was willing to unallot on a large scale.

  2. Submitted by James Hamilton on 12/31/2009 - 04:48 pm.

    Governor Pawlenty’s remarks on Judge Gearin’s ruling are embarrassing. He’s an attorney. He knows that a court presented with a conflict over the meaning of a statute must decide what the statute means, what it permits, and what it doesn’t permit. Yet he suggested today that Judge Gearin should have declined to rule and, instead, tell the Legislature to clear up any ambiguity in the statute granting the unallotment powers.

    Judge Gearin may or may not have gotten it wrong. We’ll have to wait to hear from the Court of Appeals and then the Minnesota Supreme Court. Until then, perhaps the governor can rein in his political ambitions a bit and quit playing to the uninformed.

  3. Submitted by James Hamilton on 12/31/2009 - 05:23 pm.

    Having now read Judge Gearin’s memorandum, I have to say that it is impossible to form an opinion as to its accuracy based solely on the memorandum, for the simple reason that nowhere in the order does Judge Gearin quote or discuss the application of that statute to the facts. Here, for the benefit of those interested, is the text of the statute in question: 16A.152, Subd. 4:

    Subd. 4.Reduction.(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.

    (b) An additional deficit shall, with the approval of the governor, and after consulting the legislative advisory commission, be made up by reducing unexpended allotments of any prior appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.

    (c) If the commissioner determines that probable receipts for any other fund, appropriation, or item will be less than anticipated, and that the amount available for the remainder of the term of the appropriation or for any allotment period will be less than needed, the commissioner shall notify the agency concerned and then reduce the amount allotted or to be allotted so as to prevent a deficit.

    (d) In reducing allotments, the commissioner may consider other sources of revenue available to recipients of state appropriations and may apply allotment reductions based on all sources of revenue available.

    (e) In like manner, the commissioner shall reduce allotments to an agency by the amount of any saving that can be made over previous spending plans through a reduction in prices or other cause.

  4. Submitted by Dan Hintz on 12/31/2009 - 10:15 pm.

    While Gearin may not quote the statute, she does discuss the application of the statute on the facts of the case. This is really a very simple decision: the governor can unallot when revenue is less than anticipated – that is, after the budget is made you need to re-budget to deal with a shortfall. The governor used unallotment to set the budget in the first place. That is beyond the scope of the statute, and by improperly using the statute to usurp the power of the legislature, the governor has violated the separation of powers.

  5. Submitted by Hiram Foster on 01/01/2010 - 06:46 am.

    This is the key language:

    “If the commissioner determines that probable receipts for the general fund will be less than anticipated,”

    The argument is that the shortfall was anticipated, that is, forecast early enough in the session for the legislative process to react to it. In my own opinion, to accept the governor’s reading of the statute would mean turning over the legislature’s appropriation authority to the governor whenever there is an anticipated budget shortfall. I believe that’s an unacceptable outcome, but again that’s just my opinion. What matters is what judges decide.

    The court could have gone either way, and I think we can expect that some courts who get the same question will decide it differently.

  6. Submitted by Duke Powell on 01/01/2010 - 07:31 am.

    Don Hintz, in comment #4, has provided us a most accurate and concise explanation of Judge Gearin’s ruling.

    However, by not citing the statute, she conveniently is able to ignore paragraph (b)and its “nothwithstanding” clause.

    It is also curious that the Judge would not use the phrase “less than anticipated” and substitute “unknown and unanticipated” in its stead. It is as if she needed to buttress a weak argument by deliberately misinterpreting the law.

    I invite you to test this yourself. In comment #3 Mr Hamilton provides us with the statute. In paragraph (a) attempt to insert “unknown and unanticipated” for “less than anticipated” and see what you come up with.

  7. Submitted by Paul Udstrand on 01/01/2010 - 09:39 am.

    I think it’s easy to loose the forest in the trees here. The first question, already decided was whether or not, under what circumstances the unallotment law is constitutional. It is settled law that it is constitutional so long as it does not grant the executive more power than it’s entitled to under the separation of powers scheme. No constitutional violation takes place so long as the executive and the legislature work together to develop a budget, and then due to unforeseen circumstances that budget fails. The quick fix in that scenario is executive intervention. The judge is right in focusing on the constitution rather than parsing the lantuage the unallotment law because the real issue is executive abuse of power. Even if one can argue that Pawlenty technically fallowed the law, it’s only constitutional so long as he didn’t abuse his executive power. This was an Enron accounting trick, he basically used the unallotment law like a modified line item veto. The constitution doesn’t allow that. This shortfall was not unanticipated or unforeseen, and Pawlenty didn’t even balance the budget with it, he still left us with a deficit. He circumvented the negotiated settlement he’s required to pursue under the constitution. The judges ruling focuses on that. If you go back as some are doing here and try to parse the language on the unallotment law, you simply re-open the constitutionality argument of that law when the real question is whether or not Pawlenty’s use of the law was constitutional. In other words, if Pawlenty’s use of the law was correct in this case, then the law is unconstitutional. If his use of the law was incorrect, than his actions were unconstitutional. Ether way your looking at violation of separation of powers. The logic of the ruling is that since the unallotment law has already been declared constitutional, Pawlenty’s use of the law must be at fault. In other words a finding in Pawlenty favor would render the unallotment law unconstitutional, contrary to settled law.

  8. Submitted by Paul Udstrand on 01/01/2010 - 09:50 am.

    In addition, you have to remember, Pawlenty announced unallotment before the budget was even passed. I saw it on tv, McClung sat there and the told the committee that what Pawlenty planned to do, so there’s way he can argue that he worked something out with the legislator and then was surprised by a shortfall. When it comes to the constitution, the spirit of the law can be as binding as the letter of the law.

  9. Submitted by Dan Hintz on 01/01/2010 - 10:53 am.

    The “notwithstanding” passage Mr. Powell cites in paragraph B is actually a limit on the governor’s power. It provides that the governor’s power to unallot may be limited by other conflicting laws. It also refers to “prior statutorily created obligations” which gets to the heart of Gearin’s ruling – unallotment is only appropriate when dealing with “prior statutorily created obligations” and not when setting the budget in the first place. There would be no reason for Gearin to address this passage.

    Substituting “unknown and unanticipated” into the statute makes for an awkward read, but again you don’t need to parse the language to understand the issue here. Whether you are talking about “less than anticipated” or “unknown and unanticipated,” the point is that unallotment is to be used when changed circumstances arise after the initial budget is set.

    Gearin should have quoted the actual language, if for no other reason than to head off the criticism that she is getting over not doing so. If the decision is reversed, however, her failure to do so will not be the reason.

  10. Submitted by Paul Udstrand on 01/01/2010 - 11:26 am.

    // Gearin should have quoted the actual language, if for no other reason than to head off the criticism that she is getting over not doing so

    I think this may be a really smart judge. The use of the term “unknown” may be strategic. The problem that arises with “anticipated” is it begs the question: “anticipated by whom”? What if the executive simply decides to issue false statements that they expect the budget to balance? This has already happened, remember the 2006 election cycle? The Republicans ran around the state telling everyone there was going to be surplus, while the Democrats predicted another deficit. The Democrats were right. What if Pawlenty just says: “Hey, I didn’t predict a shortfall so this wasn’t anticipated by me”? You can easily see where the courts end up tangled in arguments about whether or not there’s actually a deficit, or who’s prediction counts. In a situation where the outcome is disputed, the best you can say is it’s unknown. This effectively prevents the executive from making their own independent projections contrary to the legislator and then claiming to be surprised by the outcome. If the outcome is disputed (unknown) the executive can’t claim to be surprised by a shortfall even if their predictions turned out to be inaccurate because accurate projections were available.

  11. Submitted by Duke Powell on 01/01/2010 - 11:48 am.

    In comment #9 Dan Hintz writes:

    “The ‘notwithstanding’ passage Mr. Powell cites in paragraph B is actually a limit on the governor’s power.

    Unless I am wrong,(and if I am, I’ll stand corrected) “notwithstanding” means “despite.” Consequently the sentence in paragraph (b) reads: “Despite any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.”

    I think a proper reading is much different than Mr Hintz indicates and is why Judge Gearin chose to stay away from this statute in her ruling. It is very inconvenient to her decision.

  12. Submitted by Dan Hintz on 01/01/2010 - 04:00 pm.

    You are correct about the definition of “notwithstanding” but your interpretation of the statute is otherwise complete nonsense.

    First, you can’t pull one clause out of a statute and ignore the rest – which you would need to due with your purported interpretation. Second, even if the statute was comprised only of the section you cite, Gearin’s argument still holds because that section provides that the governor’s unallotment power arises where there are “prior statutorily created obligations,” and that didn’t happen. The governor did not unallot prior statutorily created obligations. He used unallotment to set the obligations in the first place. Gearin didn’t cite that passage because it had no bearing whatsoever on her decision.

    Gearin wrote this decision knowing full well it would be addressed by the appellate courts. Because this is a purely legal and constitutional issue, the appellate courts are not bound by Gearin’s holding – they will examine the issue de novo. So the idea that Gearin used convenient reasoning or tried to otherwise sneak one by is again, just nonsense.

  13. Submitted by Tony Spadafora on 01/02/2010 - 04:53 pm.

    Doesn’t bode well for a new $1 billion+ Vikings stadium project, does it?

  14. Submitted by Rebecca Hoover on 01/03/2010 - 07:16 pm.

    The Dems actually irritate me more than Pawlenty irritates me. Why did not the Dems long ago file a lawsuit to get court review of this inappropriate use of power by Pawlenty? The Dems are so into wailing and gnashing their teeth and doing nothing. Is this leadership? Since when are politicians so into theatrical wailing that they fail to do anything?

  15. Submitted by Sharon Anderson on 01/04/2010 - 02:56 pm.

    Separation of Powers re: LAWYERS,LAWYERS,LAWYERS
    Plaintiffs, Bernhagen,Branley,Bryton,Bullock,Griffin,Mahabady from Coon Rapids,Duluty,Aitkin,Corcoran MN
    are represented by Galen Robinson a Legal Aid Attorney and not the County Attorneys MS388, where the Applications are made.


    Interesting Amicus Brief by MN House In Support
    of Great Brief by the Way “but for” Joel Michael Lic. #0072631 and Mark Shepard Lic.#0100110 tel 651-296-6753 Fax 296-9887 are appearing ProSe with a $320.00 filingfee due today
    THEN: Alan Gilbert AG’s Office for Defendants

    How can Gearin issue any Temporary Injunction without hearing from a “Live” Plaintiff?
    Has Gearin in the 2008 US Senate also issued Election Votes on over 2 thous. Dead Persons
    Documents transposed at http://www.sharon4anderson.wordpress.com for Public Scrunity and Demand that 62cv09-1163(Vandenorth) has File with 3 thousand Property Owners at risk in pdf format.

  16. Submitted by Colleen Morse on 01/06/2010 - 08:04 pm.

    Pawlenty is lying when he says he’s against raising taxes. All he did was change the name. New fees and a shifting of taxes from income to property does not signify lowering taxes. I really hope he never gets to be president. Either he’s really stupid or else he thinks all of us are really stupid. He needs to learn how to compromise.

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