Minnesota’s Supreme Court upended the legislative session on Wednesday with a decision that invalidated Gov. Tim Pawlenty’s unilateral budget cuts last year.

The 4-3 ruling throws into doubt $2.7 billion in cuts and payment delays. It also potentially morphs a current deficit in the hundreds of millions to one of more than $3 billion.

The unraveling complicates the end of the session, with less than two weeks remaining before a constitutional adjournment deadline. Lawmakers and Pawlenty have erased about a third of a nearly $1 billion deficit that developed after last year’s cuts, and now legislators are likely to revisit at least some of the earlier reductions he made without their consent.

Democrats who control the Legislature said they expect the ruling to force Pawlenty into negotiations over new taxes, anathema to the potential GOP presidential candidate who leaves office early next year. Pawlenty made the cuts after last year’s session deadlocked over proposals to raise taxes.

“We’re sitting there at the negotiating table and the court just told him to go back and sit down in the chair,” said Rep. Ryan Winkler, a Democrat from Golden Valley.

Pawlenty downplayed the significance of the ruling, saying it affects only $700 million in cuts if the Legislature ratifies a $1.8 billion payment delay for schools. That hasn’t happened, but a House education bill includes the provision. He is also calling on lawmakers to ratify the rest of the reductions. They have refused to do so.

Pawlenty said thae deficit-ridden state has no money to reverse the cuts.

Gov. Tim Pawlenty is sitting down with top lawmakers a day after the Minnesota Supreme Court ruled against him in a case over budget cuts.

Today’s meeting in the governor’s office is focused on the fallout of the court ruling and the budget.

“The funds don’t exist, and so the Legislature is going to have to make adjustments,” he said. “I would do it for them if the unallotment authority exists, but again, that’s unclear at this point.”

The court found that Pawlenty exceeded his authority when he used an emergency executive power called unallotment to trim $5.3 million from a medical nutrition program without legislative consent.

Pawlenty made that and other cuts after a difficult 2009 legislative session in which he faced Democratic majorities in the House and Senate. He signed major spending bills but used a line-item veto to block some items, and then vetoed a tax increase passed by Democrats. Instead, to balance the budget as required by the state constitution, he unilaterally canceled or delayed $2.7 billion in spending.

Democrats argued that Pawlenty created his own emergency by signing spending plans while striking down the tax plan to pay for it.

Calling what Pawlenty did “unlawful and void,” the high court affirmed a lower court decision against the governor’s use of unallotment. It said the law was not meant to shift so much power to the governor, who has the power to cut funds only after the executive and Legislature agree on a balanced budget.

“Because the legislative and executive branches never enacted a balanced budget for the 2010-2011 biennium, use of the unallotment power to address the unresolved deficit exceeded the authority granted to the executive branch by the statute,” said the decision, written by Chief Justice Eric Magnuson.

Justices Alan Page, Paul Anderson and Helen Meyer joined in the majority. Justices Lorie Gildea, G. Barry Anderson and Christopher Dietzen dissented.

Unallotment has been on the books in Minnesota since 1939. Pawlenty used it twice in smaller amounts before last year.