Tim Pawlenty threatens state government shut down

Gov. Tim Pawlenty appears to be walking perilously close to shutting down huge swaths of Minnesota's state government after the state Supreme Court earlier this week shot down one portion of his 2009 effort to balance the state budget unilaterally.

The court's decision only addressed a $5.5 million nutrition program when it said Pawlenty overstepped his authority with the budget knife in the unallotment process. But if other parties hit by unallotment come forward and successfully sue to get some of their funding back because they now see a ray of hope based on the court's decision, the state could face a massive cash flow problem.

And that's separate from the $536 million shortfall lawmakers already faced before the end of the session.

All in all, we could be looking at $3 billion the state just doesn't have.

The problem is that the Legislature can't agree on where to cut the state budget to any serious degree. And Pawlenty has famously said he won't raise taxes to balance the budget -- indeed, his position is a mainstay of what many politicos assume will be a run at the White House in 2012.

DFL House Majority Leader Tony Sertich told MPR he blames the governor:

"This is absolutely a place where the governor has put himself. He signed all of the checks last year and didn't have money in the bank and tried to go it alone and in an illegal way," Sertich said. "The chickens are coming home to roost with this Supreme Court case. We're looking for a way out of it, though. We want to make sure that the state of Minnesota doesn't run out of money."

So just ratify the cuts, especially the governor's $1.8 billion school aid payment shifts, Pawlenty spokesman Brian McClung said.

And now we have a stalemate and a lot of political posturing.

On Friday, the Star Tribune reported, Pawlenty called an emergency cabinet meeting to talk about "planning in the event of a government shutdown or a reduction of government services.

He also issued an executive order on Friday directing the Commissioner of Minnesota Management and Budget to plan for emergency cash management prioritization of core government services.

Here's the text of the order:

Emergency Executive Order 10-07:


I, TIM PAWLENTY, GOVERNOR OF THE STATE OF MINNESOTA, by virtue of the authority vested in me by the Constitution and the applicable statutes, including Minnesota Statutes 2009, Section 4.035, do hereby issue this Executive Order:

WHEREAS, Article XI of the Constitution of the State of Minnesota requires that the State balance its budget for each fiscal biennium; and

WHEREAS, the Minnesota Legislature has not enacted an acceptable and appropriate balanced budget for the current Fiscal Year 2010-2011 biennium; and

WHEREAS appropriations enacted for the Fiscal Year 2010-2011 biennium during the 2009 legislative session were $2.7 billion in excess of available revenues for the biennium; and

WHEREAS, continued deterioration of the fiscal climate as a result of the historic economic challenges facing the nation have resulted in an additional deficit of $536 million for the current biennium; and

WHEREAS, the Minnesota Supreme Court issued on May 5, 2010, its opinion in the matter of Brayton et al. v. Pawlenty et al., Appellate Court File No. A10-64, which stated that "[b]ecause the legislative and executive branches never enacted a balanced budget for the 2010-2011 biennium, use of the unallotment power to address the unresolved deficit exceeded the authority granted to the executive branch by the [unallotment] statute" and thus held that the unallotment authority in Minnesota Statutes 2009, Section 16A.152 cannot be used to address the budget deficit created by the appropriations enacted by the Minnesota Legislature during the 2009 legislative session; and

WHEREAS, individuals and organizations seeking the restoration of government funding affected by the 2009 unallotment actions have threatened to seek litigation for a restoration of the unalloted funds in light of the Supreme Court's ruling in Brayton v. Pawlenty; and

WHEREAS, restoration of the previously-reduced allotments would result in payment obligations for the current fiscal biennium greatly in excess of the State of Minnesota's ability to pay for them; and

WHEREAS, the State of Minnesota is facing an imminent and severe cash flow crisis as a result of the potential restoration of previously-reduced allotments; and

WHEREAS, the Minnesota Legislature is scheduled for adjournment on May 17, 2010, but has still not enacted an acceptable and appropriate balanced budget plan for the biennium; and

WHEREAS, the Ramsey County District Court's 2005 order in In re Funding of Core Functions of the Executive Branch of the State of Minnesota, District Court File No. C9-05-5928, directed that the State of Minnesota prioritize performance of core functions of government during the 2005 government shutdown when state obligations exceeded appropriated spending authority; and

WHEREAS, it is imperative that Minnesota Management & Budget identify and develop comprehensive criteria to guide in the prioritization of payment of State obligations, including those relating to the life, health, and safety of Minnesota citizens, in the event that appropriated and allotted obligations continue to exceed the ability of the State of Minnesota on a cash-flow basis to pay for those obligations.

NOW, THEREFORE, I hereby order that:

1. The Commissioner of Minnesota Management & Budget is directed to undertake emergency cash management planning as necessary to plan for the prioritization of core government services.

2. The Commissioner of Minnesota Management & Budget shall immediately prepare and review its operational plans for the identification of core government functions which would be funded on a funds-available basis should the current fiscal crisis result in appropriated and allotted spending obligations continuing to exceed funding available in the State general fund.

Pursuant to Minnesota Statutes 2009, Section 4.035, Subdivision 2, this Order is effective immediately and shall remain in effect until the conclusion of the emergency.

IN TESTIMONY WHEREOF, I have set my hand this 7th day of May, 2010.

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