Yesterday morning, the Minnesota Supreme Court ruled that Gov. Tim Pawlenty’s unilateral unallotment of funds earlier in the biennium did not meet the statutory requirements for using that power.  The majority found that the language of the statute and the design of the State government do not allow for a Governor to use unallotment prior to agreeing to a budget.  Chief Justice Magnuson wrote for the majority (Link goes to PDF):

…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 court chose to rule on narrow grounds, and it was a 4-3 decision.  They intentionally did not take up the question of the underlying constitutionality of the unallotment statute.  However, the implications represent a substantial shift in the balance of power at the Capitol.  Just hours earlier, Gov. Pawlenty had vowed to cut an additional $500 M from the budget if the Legislature failed to do so, invoking unallotment.  This decision makes that threat less credible.

Now, the pressing and serious question of how to balance the budget comes back to the Legislature. The full impact of this ruling is not yet known, but it is likely that it will create a substantial amount of conflict in the coming days.  The budget must be balanced, and Federal money that both Gov. Pawlenty and the Legislature was counting on has not yet arrived. They must agree to a  budget, but we do not expect the negotiations to be easy.  Deeper cuts and the potential for a government shutdown may be in the future, as Pawlenty as renewed his vow not to include revenue increases as part of the solution.

As the Health and Human Services budget is considered, this decision is going to play a significant role.  Many of the cuts made through the unallotment process were in this budget, and now must be renegotiated. We are already seeing strong signals that the Governor is unwilling to consider Medical Assistance expansion, even though hospitals have now refused to join in the replacement GAMC program.

Stay tuned and keep speaking up for mental health services in Minnesota.