The news that a district court judge has undone Governor Pawlenty's budget fix via unallotment sounds quite horrible for conservatives. Gary has the expected reactions from GOP officials. However, I want to argue that it's a useful order that Judge Gearin has given, even though I disagree with several substantive points. The arguments are over things that are sufficiently vague that one hopes the higher courts take up the case. She at times seems to want to have it both ways, and at other times seems begging a higher court for help. Here's betting she gets that help.

Here's the full order. The part quoted by the newspapers is indeed one of the points of contention.

"The authority of the Governor to unallot is an authority intended to save the state in times of a previously unforeseen budget crisis," wrote Gearin. "It is not meant to be used as a weapon by the executive branch to break a stalemate in budget negotiations with the Legislature or to rewrite the appropriations bill."

The sentence appears on page 6 of the order. The full paragraph is as follows:

In the beginning of June of 2009, Defendants took the steps to unilaterally balance the budget by unalloting specific programs enacted into law during the session. By exercising his unallotment authority to apply to reductions in revenues that were determined by a forecast made before the budget had even been enacted and by not excluding reductions that were already known when the budget was enacted, the Governor crossed the line between legitimate exercise of his authority to unallot and interference with the Legislative power to make laws, including statutes allocating resources and raising revenues. The authority of the Governor to unallot is an authority intended to save the state in times of a previously unforeseen budget crisis, it is not meant to be used as a weapon by the executive branch to break a stalemate in budget negotiations with the Legislature or to rewrite the appropriations bill.

I believe the facts presented beforehand illuminate Judge Gearin's reasoning. It seems more a matter of timing to her. The biennium had not started. And yet the law doesn't require one to wait for a forecast. The trigger for the unallotment process is a letter from the Commissioner of Finance. The House Research Department reviews this:

Subd. 4. Reduction.(a) If 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, 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.

Judge Gearin says the law has been determined constitutional, citing Rukavina v Pawlenty. I talked about this in June. (Note the link to the case in the June article has gone dead -- the one above worked this AM.)

In the Rukavina case the Court of Appeals stated: "We conclude that MinnStat 16A.152 does not reflect an unconstitutional delegation of Legislative power, but only enables the Executive to protect the State from financial crisis in a manner designated by the Legislature." That remains the settled law in the State of Minnesota, and it would be improper for this Court to revisit the constitutionality of the unallotment statute itself. It is constitutional. It was the specific manner in which the Governor exercised his unallotment authority that trod upon the constitutional power of the Legislature, and the Legislature alone, to make laws that, in the Court's opinion, was unconstitutional. (p. 4)

She then reviews the history of the 2009 session, noting the Governor Pawlenty signed the HHS appropriations bill, simultaneously noting that he would unallot to balance the budget if he did not get a balanced one. This came days after telling the Legislature that he would not accept a tax increase (see his letter of May 8 in re the tax bill.) After the announcement the Legislature and the Governor passed budget proposals back and forth. The Legislature then does three things: fails to override the tax bill veto; fails to override the GAMC line-item veto; passes a new tax bill unveiled a mere two hours before adjournment. The Legislature was given time to act to come to an agreement with the Governor. They did not agree.

Most of that history does not appear in Judge Gearin's order. She mentions the second revenue bill like it is well-formed, with no requirement upon them to bargain in good faith with Pawlenty. The burden of bargaining in good faith seems put too much on him.

Timing appears to be an issue for Judge Gearin, and on this point I think a valid concern is raised. The trigger letter from MMB Commissioner Tom Hanson is dated June 16. Note that there is in the law NO requirement of waiting for a forecast from Finance or the state economist, just this letter; nowhere does the law say the Commissioner must wait for a new forecast. On that point I think she's wrong. A statement begins two days later on how the unallotment will be effected -- the biennium has not yet been set. Given Judge Gearin's fascination with June, it appears she thought that the Governor was obligated to call the Legislature back into special session. Yet that is nowhere in 16A.152. There is a vagueness that I for one would have liked clarified.

My point, then, is that while Judge Gearin says she can't rule on the constitutionality of the unallotment law, she is trying to put limits on where it can be used. At no point does Rukavina tell you when the unallotment is constitutional, and it does not give the Legislature an upper hand in taxing authority.

Although appropriation of money is the responsibility of the legislature under Minn. Const. Art. XI � 1, it is an annual possibility that the revenue streams that fund those appropriations may be insufficient to actually realize each appropriation. For that purpose, the legislature, by statute authorized the executive branch to avoid, or reduce, a budget shortfall in any given biennium. Minn. Stat. � 16A.152 does not represent a legislative delegation of the legislature's ultimate authority to appropriate money, but merely enables the executive to deal with an anticipated budget shortfall before it occurs.

It may be that you have to be in the biennium to enjoy this power. That is not for Judge Gearin to decide -- that will be up to the Court of Appeals and, I'll dare say, the state Supreme Court. The TRO she places on Pawlenty is in essence an invitation to the higher courts to clarify: Does he have to wait for the beginning of a biennium? If he knows there's a deficit, does he have to try again with a special session? Given that, in the present case, the Legislature never gave Pawlenty an overall budget target to which he could refer for the purpose of line-item vetoes, was Pawlenty entitled to treat the appropriations as things the Legislature would have to bargain over with him? It should be obvious from a reading of the history that they did not bargain. They passed a bill he disagreed with, that they knew he disagreed with, and for which they did not have the votes to override. Yet they continued to send spending bills. It's unfortunate that Judge Gearin chose not to include that history in her order.

At any rate, probably much ado about something that will be overturned quickly. Judge Gearin wants either the Governor and Legislature to agree to something, or for a higher court to review the constitutionality of the law as being perhaps overly broad. She'll get at least one of those, at which time her order will be a footnote. But she's doing us a favor, clarifying what has long been a rather vague statute.

Labels: DFL legislature, Minnesota, Pawlenty