Unallotment Update
By: KEVIN P. GOODNO
January 8, 2010
The legislative process is typically very contentious and fluid. With the addition of an ongoing lawsuit that may disrupt the balance of power and the jockeying for election position, the 2010 legislative session is bound to be one of the most unpredictable and nasty ever. Considering the tenor of recent sessions, that is saying quite a lot. The latest twist was the ruling last week by a Ramsey County District Court judge involving Governor Pawlenty’s unallotment authority. The ruling, although limited in its scope, has major potential ramifications for both the 2010 legislative session and the future of unallotment. The ruling allowed recipients of the Minnesota Supplemental Aid Special Diet program to continue to receive funding retroactive to the unallotment effective date of November 1, 2009 pending a final hearing on the matter.
What did it do?
Ruling. The ruling restrained Governor Pawlenty and his administration from unalloting funds for one specific program—the MSA Special Diet Grant.
Signal. In the memorandum attached to the Order, the judge signaled her eventual action by writing that “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.” These comments do not have the impact of law, but certainly provide a roadmap as to where the judge will be heading after the hearing scheduled for March 1, 2010.
Encouragement. This ruling and other writings in the order, show a strong inclination and encouragement on the part of the judge to have the legislature and Governor reach a compromise on the 2009 unallotments prior to the March 1, 2010 hearing by stating that “either the Legislature or the Governor may bring a motion before this Court to end this order if either believes that a legitimate exercise of either branch’s constitutional powers has made the issues in this lawsuit moot.”
Possible Reactions.
Global Compromise. The Judge’s statements may put some pressure on the Governor to reach a compromise with the Legislature on his 2009 unallotments. Additionally, the Legislature has wanted to address the elimination of General Assistance Medical Care (GAMC) caused by the Governor’s line-item veto (which is not impacted by the unallotment lawsuit). Until now, the Governor has had no political reason to reach an early compromise on the GAMC issue with the Legislature. The unallotment ruling could provide this impetus. If the parties can agree on a compromise of the Governor’s 2009 unallotments, the lawsuit becomes moot and further legal action would be unnecessary.
GAMC. The Governor line-item vetoed this program beginning July 1, 2010 and unalloted the remaining program effective March 2010. Supporters of the program have been pushing for a compromise that can be acted on early in the legislative session. With the hearing on the merits of the unallotment lawsuit scheduled for March, there is an incentive to address the 2009 unallotment issue prior to that time.
Impasse. If the parties cannot agree on a compromise to address the 2009 unallotments, then there are a number of possible ramifications. Please note that arguably the parties need only address the unallotments made in response to the “expected” deficit that was forecasted in February 2009, not the additional deficit identified in November 2009 nor the reinstatement of the GAMC program.
Consequences of no compromise.
Unallotments Upheld. Although unlikely because of the “signal” sent by the judge when issuing the temporary restraining order, a higher court could overrule the district court and find the 2009 unallotments appropriate. The Governor has promised he will appeal the ruling of the district court and has criticized the judge’s interpretation of the law. If the unallotments are upheld, the Governor’s previous actions will remain in effect and he will be free to use unallotment in the future as a budget balancing tool.
Limited application. The judge could rule that the 2009 unallotments are unconstitutional and grant relief only to the plaintiffs who brought the lawsuit. Such a ruling would not cover other persons impacted by the 2009 unallotments and could also be appealed to higher courts. Unless overturned, such a ruling will likely lead to more lawsuits being filed by others parties impacted by the 2009 unallotments. Any disallowed unallotments would increase the projected deficit. This limited application is a definite possibility unless other impacted parties intervene in the lawsuit to seek relief.
2009 Unallotments Unconstitutional. Another potential action of the court would be to find that the way in which the Governor used the unallotment authority in 2009 was unconstitutional. This likelihood was clearly “signaled” in the recent ruling of the judge. The judge stated that the Governor’s unallotment was used to solve an “expected” deficit—a deficit that was known by the legislature and Governor prior to the enactment of the biennial budget bills. The Governor signed the budget bills necessary to fund state government while making limited use of his line-item veto authority, vetoed revenue raising legislation, and then unalloted spending that was contained in legislation that he just signed. This process seems to use the unallotments as a “super” veto that would be a greater veto authority than is currently allowed by the Minnesota Constitution. Such a ruling would make the entire 2009 unallotments null and void. With this result, the only way to address the subsequent $2.7 billion deficit is through compromise either during the regular session or a special session. Arguably, such a ruling would still allow the Governor to use his unallotment authority to address “unexpected” deficits. Again, such a ruling would likely be appealed to higher courts, which could reverse it, uphold it, or expand it.
Statute Unconstitutional. While the judge’s memorandum acknowledged case law upholds the unallotment statute, the issue has not been decided by the Minnesota Supreme Court. In filing appeals of the district court decision, higher courts may look at the constitutionality of the statute itself even if the district court does not. If the statute is ruled unconstitutional, then the authority of the Governor to unallot would be stricken completely and any actions to address the deficit, either “expected” or “unexpected”, would have to be the result of compromise among the parties.
In the end, what takes place during the session will be based on a political assessment of the Governor and legislative leadership about the risks and benefits of seeking compromise versus the risks of a continuing impasse and the pending court decision. But, whatever the decision, it will likely add to the contentiousness and unpredictability of the session rather than reduce it.