Unallotment decision: Five points to watch

So now what?

The implications of Judge Kathleen Gearin’s order suspending a portion of the budget cuts singlehandedly imposed by Gov. Tim Pawlenty last summer will likely take months to play themselves out. But here’s a quick spin through some of what Donald Rumsfeld would call the “known unknowns” to watch in the days and weeks ahead.

What will higher courts do? Of course Gearin’s ruling could be overturned. This presumes that Pawlenty will appeal the injunction, and officially that was just one of the options the administration mentioned in its initial response. But it’s practically unimaginable they won’t appeal. The stakes are too high for Pawlenty to simply relent and throw it all back to the Legislature, as some have hinted he might do. Besides the fiscal chaos that would engender, it would do serious damage to his 2012 presidential campaign.

What happens if an additional $2.7 billion in cuts wind up back in the Legislature? If Gearin’s decision stands and the whole unallotment package is ultimately reversed, Minnesota state government could be faced with reconciling up to nearly $4 billion in red ink (the $2.7 billion in unallotments and the fresh $1.2 billion deficit that was already on their plate for 2010) for a budget period in which 30 percent of the money has been spent by the time the Legislature convenes. This sounds less like the foundation for a legislative session than the script treatment for a horror movie for accountants, and it could prove to be a California-scale calamity.

That, incidentally, was one reason that a lot of interested parties decided early on that they wouldn’t pursue legal action themselves. They reckoned that winning such a suit could trigger a chain of events that would leave them even worse off. As one lobbyist for local units of government said to PIM back in June, “If somebody were to successfully challenge the governor’s authority, what would the remedy be? That’s the $64,000 question.”

If the decision stands, how will it affect Tim Pawlenty’s presidential campaign? Let’s just say it probably won’t help. Right now, despite the $1 billion-plus in structural deficits that existed here before the economy crashed, Minnesota’s budget troubles make it profile nationally as just another state beset by the fallout from a terrible economy. If a substantial portion of Pawlenty’s cuts get thrown back to the Legislature at this late hour, the governor through his executive action will have made a mess so auspiciously bad that it becomes a national story, and a ready-to-hand cudgel for Pawlenty’s GOP presidential competitors.

What will the AG’s office do? The attorney general is the state’s top lawyer, and it normally represents the state’s interests in any court matter. But there is precedent for governors employing outside counsel, and a number of DFL activists and insiders are upset that DFL AG Lori Swanson is representing a Republican governor in a matter that pits branch against branch and party against party. If Swanson’s office continues to represent the governor through an appeals process, expect the conflict to grow more bitter and open.

Does this mean a fight over tax increases in 2010? Aside from the racino push that soon-to-be ex-Sen. Dick Day (R-Owatonna) will lead, no one really expected a pitched battle over new-revenue proposals in the upcoming legislative session. But a wholesale late-stage revisitation of 2010-11 budget cuts makes that practically inevitable, mathematically as much as politically. Worth noting: House Speaker Margaret Anderson Kelliher told Minnesota Lawyer’s Patrick Thornton after the Gearin decision that “all options” would be on the table in 2010. That’s precisely the phrase she used over and over last session when she was asked about tax increases.

2 Responses to “Unallotment decision: Five points to watch”

1. annon Says:
   December 31st, 2009 at 11:03 am

   What is your source that “a number of DFL activists are upset” with AG Swanson? Where did you get your information? Do you realize that the AG is bound by the constitution to represent the Governor. You must be a complete and total moron if you think otherwise. Quit postulating and try reporting.

2. Hiram Says:
   December 31st, 2009 at 3:05 pm

   “But it’s practically unimaginable they won’t appeal. The stakes are too high for Pawlenty to simply relent and throw it all back to the Legislature, as some have hinted he might do.”

   Not necessarily. This is just one lower court decision. By letting it stand, the impact could be limited just to the facts of this particular case. If the governor appeals, the appellate court could strike down unallotment generally in a decision that would have precedential effect.

   “If the decision stands, how will it affect Tim Pawlenty’s presidential campaign?”

   A lower court opinion of very limited effect probably wouldn’t matter very much at all. But if the court’s ruling is upheld on appellate levels, that would be embarrassing in itself for the governor and could set into motion a long and politically dangerous confrontation with the legislature.