On Monday morning, the Minnesota legislature passed a budget deal that concluded a less than satisfying legislative session. The bill, which closed a $3 billion budget gap, passes nearly all of Gov. Pawlenty’s unallotments into law and pulls $1.9 billion from K-12 funding through a shift. Ideally, this all gets paid back next year, but as the Post-Bulletin pointed out, if schools run out of money, they’ll have to get short-term loans. It’s not a good situation for a state that has seen years of decline in general fund spending and anticipates another huge deficit in the next biennium. In our analysis yesterday, Minnesota 2020 emphasized that the bill’s overall drop in public investment will cost Minnesota more jobs than a tax increase on high income households would have.

What do you think?  What effects do you foresee the budget deal having on our schools and the long-term well-being of Minnesota?

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In a 4-3 ruling, the Minnesota Supreme Court struck down Governor Pawlenty’s use of the executive unallotment authority to eliminate funding for a state program.  It is now time for Governor Pawlenty to do what he should have been doing all along: compromise with the Legislature.

The ruling, written by Chief Justice Magnuson, concludes that both plaintiffs (the party that challenged the ruling, specifically six recipients of assistance under Minnesota Supplemental Aid Special Diet Program who were harmed by the unallotment of funding for this program) and the defendant (Pawlenty and three state commissioners) both offered reasonable interpretations of the unallotment statute, although the Governor’s interpretation is “more strained.”  However, because of ambiguity in the statute, the Court was led to consider the intent of the Legislature in crafting the unallotment statute.

In a key paragraph, the ruling notes that:

In the context of the limited constitutional grant of gubernatorial authority with regard to appropriations, we cannot conclude that the Legislature intended to authorize the executive branch to use the unallotment process to balance the budget for an entire biennium when balanced spending and revenue legislation has not been initially agreed upon by the Legislature and the Governor.  Instead, we conclude that the Legislature intended the unallotment authority to serve the more narrow purpose of providing a mechanism by which the executive branch could address unanticipated deficits that occur after a balanced budget has previously been enacted.

The ruling goes on to note that Pawlenty’s interpretation of the unallotment statute “would result in an alternative budget-creation mechanism that bypasses the constitutionally prescribed process.  There is nothing to suggest that was the purpose for which the unallotment statute was enacted.”

The ruling declares the Governor’s unallotment of funding for the Special Diet Program “null and void.”  However, the broader implications of the ruling are not yet clear.  For example, will Pawlenty have authority to use his unallotment after the current legislative session if there is failure to reach a budget compromise?  The following sentence from the Supreme Court ruling would appear to preclude that outcome:

The [unallotment] statute does not shift to the executive branch a broad budget-making authority allowing the executive branch to address a deficit that remains after a legislative session because the legislative and executive branches have not resolved their differences.

In light of this, the warning issued by Pawlenty yesterday that he will unallot if the legislature does not acquiesce to his demands could be an empty threat.

I am no lawyer—and thus I’ll defer to legal thinkers about the actual ramifications of the Court’s ruling.  However, the whole controversy could be rendered moot if Pawlenty simply recognizes that he is a governor–his role is to compromise on an appropriate budget solution, not to make demands like a petulant child and wait for the legislature to give him his way.

The legislature too has responsibilities.  They have already enacted deep cuts–and more cuts may be necessary.  However, they should also stand firm on the need for a revenue increase.  Since 2002, Minnesota has cut own-source revenue more than any other state in the nation; in light of this, there is no defensible policy rationale for taking revenue increases entirely off the table.  Lawmakers should not reward the intransigence of the Governor by yielding to him.

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I think that AFSCME Council 5 Executive Director Eliot Seide is on to something.

Standing before a Labor rally on the Minnesota State Capitol steps, shaking a model human backbone, Seide demanded that state legislators “get a spine.” He cast his challenge in partisan terms but the challenge extends, I think, to all state public policy leaders and not one particular party.

Governor Tim Pawlenty has, in policy terms, had his way. Legislators have almost entirely yielded to Pawlenty’s direction. No amount of insistence changes that observation. The conservative legislative minority has supported Pawlenty, preventing a veto override, clearly leaving the majority frustrated. However, after repeated budget cuts, particularly reinforced by Pawlenty’s “unallotment” initiative and his proposed $1.2 billion budget deficit spending plan, I’ve reached a near-sputtering frustration.

In the film, “Apocalypse Now,” loosely drawn from Joseph Conrad’s “Heart of Darkness,” the Kurtz character asks his executioner, Willard, “Are my methods unsound?” Willard replies, “I don’t see any method at all, sir.”

Minnesota cannot cut its way out of the budget deficit anymore than it can cut its way to prosperity. It’s time to raise state revenue. Enough forcing property tax increases on cities; let’s start with a $1.2 billion new revenue target. Communities, counties and school districts have repeatedly raised their property taxes and cut program outlays, adjusting for repeated unilateral state revenue sharing cuts. State leaders need to do the same.

We shouldn’t be surprised at Seide’s frustration; he speaks a shared sentiment.

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