Supreme Court ruling adds to deficit problem

Published 3:50 pm Saturday, May 8, 2010

The Minnesota Supreme Court issued a ruling this week that deepens the budget challenges facing the state. When the Legislature began session in February, the state’s budget was about $1 billion short of needed revenue to pay for state responsibilities through fiscal year 2011. After this week’s ruling, that deficit could be increased by $2 billion or more.

The Legislature is constitutionally mandated to adjourn on May 17. That doesn’t leave much time to address this problem, but we are working vigorously with the governor’s office and House leaders to determine how to move forward. The Legislature has spent the better part of this legislative session focused on streamlining government and reducing spending; that goal will not change because of this ruling.

Specifically, the Supreme Court ruled that the unallotments Gov. Tim Pawlenty made last June are beyond the scope of his power provided in Minnesota statute. When he didn’t like the balanced budget solution presented to him by the Legislature last May — even though many of those bills passed with bipartisan support — the governor waited until the Legislature adjourned for the year to strike all of those bills and, in turn, issue $2.7 billion in budget cuts that he decided upon himself, without consulting the Legislature.

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According to the Supreme Court, this is not how unallotment powers were intended to be used. Governors are granted unallotment authority to use in emergency situations, not to utilize as a type of self-government.

The court’s ruling actually was aimed at one particular cut made by the governor, which affected a state nutrition program worth about $5 million. That group pursued court action against the unallotment and succeeded. Although the ruling only invalidates this $5 million cut, the court’s decision calls into question the legality of the other unallotments made in 2009.

The Legislature could allow the remaining $2 billion worth of unallotments to stand, but it’s likely the other groups that were targeted could pursue legal action to also have their cuts overturned. For instance, cities and counties sustained $300 million in state aid cuts under 2009 unallotments. They could pursue legal action to have those cuts reversed, which would add $300 million to the state’s deficit. It’s likely that such a decision wouldn’t be made until well after the Legislature has adjourned for the year, leaving very little time or resources to solve a new budget deficit. It’s simply too risky for the state to live under that type of uncertainty.

To avoid the kind of turmoil this would cause, Senate and House leaders already have asked the governor to consider rescinding his other 2009 unallotments and return to the bargaining table to agree on reasonable, permanent budget cuts that can be passed by both legislative bodies before the end of session. Obviously, this will be a difficult task, but it’s not insurmountable. If Pawlenty is willing to come to the table, compromise and work with the Legislature, there still is time to produce a balanced budget.

Many important decisions will be made at the Capitol in the coming days. If you have any questions or concerns as this process continues, please do not hesitate to contact me at; 651-296-9248; or Room 317 State Capitol, St. Paul, MN 55117.

Dan Sparks, DFL-Austin, is the state senator for District 27.