Gov. Pawlenty’s cash flow crisis


Minnesota is in the midst of “a severe cash flow crisis,” according the Governor Pawlenty – a crisis so severe that Pawlenty was forced to cancel an out-of-state political trip. The crisis is of the Governor’s own making, being the result of his illegal use of the executive unallotment authority.

Wednesday’s Supreme Court ruling on unallotment technically only struck down the unallotment of funding for Minnesota Supplemental Aid Special Diet Program. However, the logic of the ruling places all of the Governor’s unallotments in jeopardy. Other groups affected by the unallotment – from school districts to businesses – can challenge the harm done to them by unallotment with a strong likelihood of success.  If this happens, the state will not have the ability to pay its bills.

The cause of the crisis is that the Governor signed spending bills last Spring but vetoed the revenue needed to pay for them. The Governor tried to cancel the spending he signed into law using his unallotment power. However, the Governor’s unallotments were illegal.

Gov. Pawlenty’s complaint that the ruling was “a very misguided, unwise decision” is bogus. In a decision written by Chief Justice Eric Magnuson – a Pawlenty appointee – the Court wisely concluded that the unallotment authority was designed to redress an unanticipated budget shortfall that occurred after the Governor and Legislature enacted a compromise budget, not to allow the Governor to circumvent the need for compromise. In short, the ruling was based on solid constitutional grounds; any other outcome would have shifted appropriation authority to the executive branch in a way that is clearly unconstitutional.

State government has a cash flow crisis because Gov. Pawlenty chose to rely on an unlawful power play rather than sit down with the legislature and compromise.

Now that we have a cash flow crisis, the Governor is demanding that the legislature enact the budget cuts and shifts that he imposed illegally last Summer. The legislature should not allow the author of the cash flow crisis to dictate the terms of its resolution.

Legislative acquiescence to a short-term delay of payments may be unavoidable because the state does not presently have the money on hand to honor the commitments that the Governor signed into law. However, the long-term solution to Gov. Pawlenty’s cash flow crisis should involve a balanced approach of expenditure cuts and revenue increases. If the Governor refuses to compromise on a balanced solution, then the responsibility for the resulting government shut-down – like the current cash-flow crisis – will rest entirely on his shoulders.