Feb 08 Unallotment Deadline Looming

According to this AP article, Gov. Palwenty's administration has until Tuesday to explain why it chose to unallot:

State lawyers representing Pawlenty have a deadline for filing a brief to the high court over his so-called unallotments. Pawlenty is appealing a lower court ruling that said he went too far in balancing the budget on his own.

I quoted Minnesota's unallotment in this post. Here's the language of the statute:

If the commissioner [of finance] determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the legislative advisory commission, reduce the amount in the budget reserve account as needed to balance expenditures with revenue.

I said then that the legislature was told that, had the DFL's budget become law, the budget surplus would've been a whopping $3,625 at the end of the biennium. In other words, the commissioner of finance's best estimate couldn't guarantee that the DFL's budget would've balanced. In other words, there isn't proof that the DFL legislature met its constitutional responsibility.

Based on the unallotment provision's language, Gov. Pawlenty was obligated to unallot.

I've talked with numerous State Capitol insiders. Without exception, they think that, though the DFL publicly says that Judge Kathleen Gearin's ruling was a great victory, privately, they're scared to death that Minnesota's Supreme Court will uphold Judge Gearin's ruling. The people I've talked with say that the only thing coming out of this trial is additional scrutiny on the DFL's budget.

Speaker Kelliher certainly doesn't want this scrutinized because she couldn't hold her caucus together, with Reps. Hoppe and Pelowski abandoning her on overriding Gov. Pawlenty's veto of the Tax Omnibus Bill.

Vulnerable DFL incumbents certainly don't want the additional scrutiny. First, their vote for a major income tax increase won't sit well with small businesses. Second, The fact that the tax increase didn't even come close to closing the deficit won't sit well with many voters. Third, this just gives their opponents ammunition to label DFL incumbents as disorganized and pawns of the DFL leadership. That isn't where they want to be, especially heading into an election cycle with them running into a stiff wind.

This is a test of Minnesota's Supreme Court, too. The unallotment provision's language is unambiguous. If the Finance Commissioner determines that Minnesota's biennial budget spends more than they'll take in, the statute says he will, "the approval of the governor, and after consulting the legislative advisory commission," reduce state's rainy day fund first, then, if necessary, start unalloting until the budget balances.

There was no money in Minnesota's rainy day fund after the 2008 budget agreement.

If Minnesota's Supreme Court rules according to the letter of the law, then Judge Gearin's ruling will be overturned. That's because, in past rulings, the Supreme Court has held that unallotment is constitutional because the legislature was ruled to have given the executive branch the authority to unallot.

Here's the bottom line: Whether Minnesota's Supreme Court rules in Judge Gearin's favor or not, Gov. Pawlenty will unallot. Judge Gearin admitted in her TRO that current conditions would allow Gov. Pawlenty to unallot.

Finally, this puts a gun to the DFL leadership's head. Either they pass legislation that meets with Gov. Pawlenty's approval or he vetoes the bill, then unallots. If the DFL proposes anything remotely similar to the budget that they proposed last year, they'll suffer more defections than they experienced last year. If that happened, Speaker Kelliher's gubernatorial hopes would be essentially be extinguished.

Comments welcome at LFR.