Unallotment verdict: an opportunity to ‘get it right’


The fiscal landscape of Minnesota shifted last Wednesday when Ramsey County District Court Judge Kathleen Gearin ruled that the July unallotment of the Minnesota Supplemental Aid (MSA) special diet program was unconstitutional. The direct impact of the ruling is on a $5 million program that helps to pay for medically prescribed diets for MSA recipients. However, the logic of the ruling places the entire $2.7 billion July unallotment in jeopardy. 

Governor Pawlenty complained that Judge Gearin has inserted the courts into “a political dispute.” Pawlenty’s observation is both correct and irrelevant. Going back to Marbury vs. Madison (1803), courts have inserted themselves into “political disputes.” The criterion for court involvement is not whether a dispute is “political,” but whether the dispute involves a legitimate legal question. There can be no doubt that there was a legitimate legal question regarding the July unallotments.

Gearin ruled that the unallotment authority could only be used when a financial crisis was either “unkown or unanticipated.” The July unallotment was used to address a deficit that was both known and anticipated during the 2009 legislative session. Gearin concluded that “The authority of the Governor to unallot is an authority intended to save the state in times of previously unforeseen budget crisis, it is not meant to be used as a weapon by the executive branch to break a stalemate in budget negotiations with the legislature or to rewrite appropriation bills.” As noted in the Star Tribune, University of Minnesota constitutional law professor Fred Morrison concluded the Gearin’s reasoning was sound.

Gearin’s ruling has profound implications for the 2010 legislative session, assuming that it survives appeal. Pawlenty and his “no new tax” allies in the legislature are likely to deliver ultimatums that they will consider no resolution to the budget deficit that involves a tax increase; in the aftermath of the ruling, Pawlenty stated that “I’m going to continue to fight against increased taxes.” Progressive legislators should not reward the intransigence of the anti-investment crowd through surrender. To paraphrase an old cigarette commercial, progressive legislators were elected to fight, not switch.

If progressives refuse to yield to the “no new tax” ultimatum, there will likely be threatened if not actual government shutdowns. So be it.  This would be a price worth paying in order to avoid yielding control of the state budget to a belligerent anti-tax minority. With the state and local effective tax rate of the wealthiest Minnesotans far below that of their fellow citizens, there is room for a tax increase. The flawed arguments of the “no new tax” crowd must not be allowed to carry the day. In the face of progressive resolve, the “no new tax” minority will ultimately be compelled to consider reasonable revenue increases.

In addressing the state’s budget deficit for the current biennium, which could be swelled through the cancellation of the $2.7 billion July unallotment, all options must be on the table, including spending cuts, spending reform, and revenue increases. The potential reversal of the July unallotments provides state policymakers with the opportunity for a fair and balanced resolution to the ongoing state budget crisis.