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Sunday, May 16, 2010

Courts - Minnesota Supreme Court restricts governor's ability to "unallot" appropriated funds; dissenter appointed chief justice

In this June 23, 2009 entry. the ILB looked at the 2009 budget bill and the authority it gave Gov. Daniels to both "augment" ("to add to an appropriation in this act from revenues accruing to the fund from which the appropriation was made") appropriations in the budget act, and to "withhold allotments of any or all appropriations contained in this act for the 2009-2011 biennium, if it is considered necessary to do so in order to prevent a deficit financial situation."

This March 8, 2008 ILB entry quoted from an article at Stateline.org, including:

In the final days of Minnesota’s legislative session last year, the governor invoked a rarely used authority granted more than 70 years ago that allowed him to rescind $5.3 million of already allocated program funds. He did so to help balance the state budget. But six low-income people whose state supplemental diet plan went away with that cut sued the state. The case has now found its way to the state Supreme Court, which will decide the constitutionality of the governor’s use of his so-called “unallotment” power. * * *

The Supreme Court has said it will review both the constitutionality of Pawlenty’s use of the unallotment authority and whether it violated separation of powers, meaning the case could have wide implications for the state.

On Wed., May 5, 2010, the Minn. court issued its ruling in the case. Here is a long report by Elizabeth Dunbar and Tom Scheck of Minnesota Public Radio. Some quotes:
St. Paul, Minn. — A Minnesota Supreme Court ruling that struck down a unilateral cut Gov. Tim Pawlenty made last year could make the Legislature's task of balancing the budget more complicated.

The Supreme Court, in a 4-3 ruling, said Wednesday that Pawlenty overstepped his authority when he used his unallotment authority to cut a nutrition program for low-income Minnesotans.

However, the decision did not turn on constitutionality, but on statutory grounds:
While Pawlenty and the Legislature negotiate on the current two-year budget, the court ruling could have implications for future budget negotiations between the governor and legislators.

Supreme Court Chief Justice Eric Magnuson noted in the ruling that Pawlenty's decision to cut the Minnesota Supplemental Aid Special Diet Program came before the budget-making process was completed.

While the unallotment statute gives the governor authority to address "an unanticipated deficit that arises after the legislative and executive branches have enacted a balanced budget," that wasn't the case last year when Pawlenty used the authority, the court wrote.

"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," Magnuson wrote.

As expalined by Ms. Dunbar in a side-bar:
Unallotment is executive power the governor of Minnesota may exercise under certain circumstances to cut the state budget or delay payments without the Legislature's approval.

The Minnesota Legislature formally gave the governor this power in 1939 after Gov. Harold Stassen needed to cut the state budget following an economic recession. The law was aimed at giving the governor power to protect the state from financial crisis.

The Indiana authorization is also contained in a statute, but in our case it is included as part of the "boiler plate" in the biennial budget law.

Here, via Minn. public radio, is a link to the 47-page opinion in Brayton v. Pawlenty.

From a story
by Martiga Lohn and Steve Karnowski of the AP, dated May 5, more details:

Pawlenty made his 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.

One of Pawlenty's cuts -- the $5.3 million from the nutrition program -- prompted the lawsuit that led to the court case. Ramsey County Chief District Judge Kathleen Gearin had blocked the cut, writing that Pawlenty overstepped a boundary between legitimate use of unallotment and the legislature's power.

The Supreme Court said the unallotment law was not meant to shift so much power to the governor, and that the governor 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," the decision said.

Chief Justice Eric Magnuson wrote the decision, with Justices Alan Page and Paul Anderson issuing a separate concurrence. Justice Helen Meyer joined in the 4-3 majority. Justices Lorie Gildea, G. Barry Anderson and Christopher Dietzen dissented.

The justices did not decide if the unallotment statute is unconstitutional.

Page suggested that it might be, saying the statute gives the governor "virtually unfettered discretion" to decide how to cut funds. He expressed concern that it "may constitute an unlawful delegation of legislative authority."

Gildea asserted that the plaintiffs had failed to prove that the statute is unconstitutional. Gildea noted that the state constitution requires a balanced budget, and that the executive and legislative branches had agreed on a process through the unallotment statute to ensure that it can occur. Whether that is the best process is for the people, not the court, to say, Gildea wrote.

On May 13, Governor Pawlenty named dissenting justice Lori Gildea as Chief Justice.

As the MinnLawyer Blog points out: "There’s no check on a governor’s ability to appoint whomever he wants in Minnesota – no process required." Justices are elected in a nonpartisan election for a 6 year term, but vacancies are filled by gubernatorial appointment. The American Judicature Society comments: "According to the constitution, judges are chosen in nonpartisan elections, but many judges resign before their terms end, allowing the governor to appoint their replacements."

From a May 13, 2010 AP story by Martiga Lohn:

ST. PAUL, Minn. - Gov. Tim Pawlenty deepened his imprint on the Minnesota Supreme Court on Thursday, promoting Lorie Gildea to lead the court and naming a 35-year-old law professor who once clerked for U.S. Supreme Court Justice Clarence Thomas to fill her seat.

The Republican governor said the elevation of Gildea and appointment of David Stras fit within his philosophy of a limited role for the judiciary. Both took his side in a case that went against him last week when the court found he exceeded his authority by cutting the budget without legislative consent — Gildea in a dissenting opinion, Stras with a friend-of-the-court brief. * * *

In Minnesota, Supreme Court justices are either named by governors or, more rarely, elected directly. They stand for election every six years. Gildea will be on the ballot in 2012.

Straus was the focus of this May 14th ILB entry, headed "Blogger appointed to the Minnesota Supreme Court."

Finally, I ran across this fascinating article by David Schultz, a professor in the School of Business, Hamline University, writes the day after the court decision, but a week before the Supreme Court appointments. Some quotes:

The Minnesota Supreme Court's unallotment decision was predictable. As I argued in a June 16, 2009, Community Voices commentary, several constitutional and statutory arguments suggested that if Gov. Tim Pawlenty used unallotment to balance the budget as he promised, a court would find his action illegal.

The governor did what he promised, and the court found it illegal. In a 4-3 ruling, with Chief Justice Eric Magnuson writing the majority opinion and casting the deciding vote, he crafted a classic opinion that actually is the model of judicial restraint. In reaching its decision Magnuson noted that the court could have ruled on either statutory or constitutional grounds but that since it could handle the matter by statute, it would not address the constitutional issues. * * *

Winners and losers? Of course the plaintiffs and Galen Robinson of Mid-Minnesota Legal Assistance are the major winners. They get their money for the diet program. They also brought the case when the DFL chickened out last year and decided not to go to court. But if the Legislature ratifies the unallotment, their actions may be for naught.

The second winner is Chief Justice Magnuson. A former law partner of the governor who appointed him to the bench, Magnuson has spent nearly his entire time fighting the governor's budget cuts to the judiciary. Unlike the other three Pawlenty appointees to the Supreme Court who supported the governor (possibly with dreams of getting named chief justice), Magnuson's announcement before the case that he was stepping down from the court liberated him to follow what the law told him to do. The final decision was 4-3, with the chief justice casting the deciding vote (as I predicted it would be). His decision will be remembered as a courageous one, marked with independence and integrity. * * *

Now the losers. Pawlenty, of course, lost legally and politically. * * *

Finally, other losers include law professors David Stras and Michael Paulsen of the University of Minnesota and St. Thomas law schools. They filed a brief in this case drawing upon federal constitutional principles to defend the governor. They might know the U.S. Constitution, but they did not understand Minnesota constitutional law.

Posted by Marcia Oddi on May 16, 2010 12:45 PM
Posted to Courts in general