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Court rules against Dayton’s bid to defund the Legislature. Why it matters — and where it goes from here

The decision restored funding for House and Senate operations for the next two years. But it also spoke to several other big questions.

Gov. Mark Dayton shown announcing a last-minute budget deal at 11:15 Monday night, May 22, as House Majority Leader Joyce Peppin, House Speaker Kurt Daudt and Senate Majority Leader Paul Gazelka looked on.
MinnPost photo by Briana Bierschbach

The Minnesota Legislature got all of its funding back, at least for now.

On Wednesday, Ramsey County Judge John Guthmann ruled against Gov. Mark Dayton’s May decision to line-item veto funding for the Minnesota House and Senate. Guthmann said the Democratic governor violated the separation of powers clause in the state constitution by effectively abolishing a separate branch of government, doing so in order to change other state policies he didn’t like.

By ruling the veto “null and void,” the judge restored about $130 million in funding for House and Senate operations for the next two years. A temporary funding agreement for the Legislature, signed off on earlier, would have ended on Oct. 1. The next legislative session does not convene until Feb. 20, 2018.

But that’s just the immediate impact of the ruling, part of a case that also spoke to a much bigger question: Can one branch of government eliminate funding for another?

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Before Dayton, no governor had ever vetoed funding another entire branch of government. Guthmann’s ruling, which will likely face more scrutiny from the Minnesota Supreme Court, could inform how legislators and governors handle this same question — not to mention how governors view their own veto power — for years to come.

“The courts have placed [limitations] on what the governor can do on his own,” said David Schultz, an attorney and political science professor at Hamline University. “Yes, it will be appealed, but the implications in terms of the Ramsey court setting precedent are significant.”

Here are the key takeaways from Guthmann’s ruling — and where the issue goes next:

The state constitution must be ‘taken by its four corners’
At the center of the case were two clashing clauses in the Minnesota Constitution, including one that gives the governor the power to line-item veto any budget item he opposes. Attorneys for the governor said that was put in place to create a balance of power with the Legislature, which is the only branch that can create budget proposals, and that Dayton was completely within his constitutional authority to veto their budget.

But Doug Kelley, the lead attorney for legislative leaders, pointed to the constitution’s separation-of-powers clause, which says there must be three separate but co-equal branches of government that do not interfere with the other. Dayton violated that principle when he vetoed the entire legislative budget, Kelley argued.

“The challenge for the court is the fact that both positions are technically correct,” Guthmann wrote in his ruling. But, he added, the state constitution “must be taken by its four corners” and read as an entire document.

“The difficulty with the governor’s position…becomes apparent when the court obeys the mandate to construe and give effect to the entire constitution,” Guthmann wrote. “The Separation of Powers clause imposes a ‘constitutional test’ of it’s own.”

Defunding the Legislature = abolishing the Legislature
Another key question of the case was whether eliminating funding for the Legislature is the same thing as effectively abolishing it. That’s what the Legislature argued, and in the ruling, Guthmann unequivocally agreed.

Lawmakers need funding both during session and in the interim to conduct research and do constituent services, not to mention pay the salaries of hundreds of staffers. The constitution also requires that legislators are issued paychecks. The “genuine” importance of their funding was reinforced, Guthmann noted, when the governor agreed in June to provide temporary funding for the Legislature until Oct. 1 while the legal battle played out.

There are still times when a governor could veto legislative funding
Guthmann didn’t completely close the door to the governor vetoing the budget for the Legislature, however, arguing he could have objected to the level of funding set aside for lawmakers and vetoed it for that reason. “The Court’s ruling is by no means intended to prevent governors from issuing a line-item veto of the Legislature’s appropriation if they actually object to the manner in which the Legislature funded itself,” he wrote.

The reason for a veto matters
Dayton opened the door to questioning about the motives for issue the veto thanks to his veto letter, in which he said he zeroed out the Legislature’s funding as a negotiating tactic — to compel lawmakers to come back to the table to discuss provisions in two state budget bills and a $650 million tax cut package.

Dayton wasn’t actually opposed to the level of funding passed for the Legislature’s operations, but Sam Hanson, Dayton’s attorney, said that didn’t matter. The state constitution gives the governor the power to line-item veto budget provisions for whatever reason he chooses, he argued, and the wisdom of those decisions cannot be questioned by the other branches of government, which itself would violate the separation of powers.

Guthmann disagreed, at least when it came to this case: “Separation of powers principles usually require the judiciary to avoid considering the motive behind a valid exercise of authority of a co-equal branch of government,” he wrote. “But, it is equally clear that caution should not be thrown to the wind when the issue involves judicial review of an action that produces a constitutionally suspect result.”

Guthmann dug deep into case law related to the power of the line-item veto and its purpose, noting that it was meant to be a “negative authority, not a creative one.” That means it can only be used to eliminate provisions, not try to create all new ones, which is the job of the Legislature. More specifically, governors can only use it as a check on budget items, not policy provisions. Guthmann said Dayton used it as a “refashioned…tool to secure the repeal or modification of policy legislation unrelated to the vetoed appropriation.”

That rationale was similar to the one used by the Supreme Court in ruling against former Gov. Tim Pawlenty, who used his power of unallotment to slash more than $2 billion from the state budget after lawmakers went home. The court ruled that was stepping beyond the authority of the executive branch in budget setting.

“Between this decision and the [Pawlenty case] a few years ago, the power of the Minnesota governor vis-a-vis the legislature is now weaker,” Schultz said. “In both cases the governor overplayed his hand.”

The courts really, really don’t want to be in the middle of this
Guthmann’s ruling is filled with language that made it very clear he didn’t relish the situation, saying lawmakers put him and the courts in “political quicksand” no matter which way he stepped. For example: Dayton’s counsel said the court should dismiss the legislative claim and stay out of a political battle between two branches of government. At the same time, Dayton asked the court to step in and provide emergency funding to the Legislature while those political battles played out. But when it comes to violations of the constitution, it’s the court’s job to get involved, Guthmann said.

It’s definitely not over
Guthmann’s order was sweeping, but it will also face scrutiny. Dayton said he plans to appeal the lower court’s ruling to the Minnesota Supreme Court and seek and expedited hearing.

“Today’s District Court ruling is only a preliminary step in this case’s judicial process,” Dayton said in a statement. “It is unfortunate that Republican Legislative Leaders are using this ruling to avoid completing their work by correcting their serious errors in the last Legislative session. From the beginning of my administration, I have worked hard to restore sound fiscal integrity to our State Government. My line-item veto was targeted to achieve this result. As I have said, the tax bill passed last May by Republican Legislators jeopardizes Minnesota’s structurally balanced budget in the future.”

Republican legislative leaders are asking Dayton to drop the appeal, but they’re ready for an expedited case if that happens. “We are disappointed that the governor is apparently refusing to accept the court’s decision,” House Speaker Kurt Daudt said in a statement. “The Legislature has not and does not agree to an appeal of the ruling nor do we think it is a good idea. The court could not have been clearer.”