As Minnesota steers toward a shuttering of government on July 1, courts will have to choose among at least three competing legal claims
With two weeks left until the end of the biennial budget cycle, the largest question facing the state is increasingly not whether the government will be forced to shut down July 1, but just how much will be shuttered when it does.
The only precedent is 2005, when the state went through a partial shutdown that lasted eight days. But the circumstances this time are more fraught, practically and legally, than six years ago. During the 2005 partial closure, many of the budget bills had already been enacted and were shielded from any shutdown ramifications. In the current situation, virtually no finance legislation has been signed into law. This suggests, at least in theory, that the entire state government apparatus could be disabled.
In addition, there is a looming constitutional challenge to the authority of Minnesota courts to order any spending at all, essential or otherwise, in the event of a shutdown. A similar separation of powers challenge was brought in 2005, but it was mooted by the Legislature’s after-the-fact ratification of the spending that had been undertaken during the shutdown. In 2007 an appellate court ruling left the door open for a more timely future court challenge on the same grounds. And the attorney who brought that 2005 complaint, Erick Kaardal, has told Capitol Report that he intends to press the same question again this year, most likely filing a court action by the end of this week.
Further complications could stem from a manifest disagreement between the administration of Gov. Mark Dayton and the state’s top lawyer, Attorney General Lori Swanson, over the scope of government operations to be continued during a shutdown.
Back in 2005, GOP Gov. Tim Pawlenty and DFL Attorney General Mike Hatch filed substantially similar petitions regarding government operations in shutdown mode. This year, by contrast, the two offices appear to be at odds over their definitions of “core functions of government.” The shutdown plan unveiled this week by Swanson would shield large portions of the government from ramifications after July 1. In addition to the most basic public safety spending — to keep the prison system intact and to preserve certain statewide police functions — Swanson’s petition asks that human services, local government aid, tax collections, public health programs and K-12 education spending be given a reprieve in the event of a shutdown.
The Swanson petition also envisions a diminished role for the special master who would oversee the shutdown, instead suggesting that the state’s various government entities (not only executive branch agencies but county and municipal governments) be allowed to make their own determinations about the duties they would still perform in a shutdown.
DFL sources familiar with the administration’s shutdown planning efforts have been saying for weeks that Dayton was committed to a much more minimalistic definition of “core functions.” The objective, many observers believe, is to make the shutdown as broadly encompassing — and harsh — as possible in the interest of ensuring that it generates enough pressure to force a budget deal sooner rather than later.
One DFL source says the Dayton administration was taken off guard by the timing and expansive scale of Swanson’s shutdown petition. “The governor wants a very limited scope of government operations during a shutdown,” this source said, adding that the Swanson petition “screwed” the governor’s office: “If the terms of the shutdown are not a strong pressure-builder on Republicans, it’s not getting [the administration] anywhere [in budget negotiations].”
A lobbyist for units of local government seconded that reading. “The politics of this are so strange,” the source said. “It’s almost as if the party that most supports government functions is the one that’s looking for the hardest shutdown…. Dayton seems to believe the worst thing that could happen is a court order regarding core functions that Republicans could deem a victory. Then they don’t feel any urgency to come back to the bargaining table.”
Dayton response calls for mediator
On Tuesday, Dayton press secretary Katharine Tinucci declined to comment on the strategic divide between the governor’s office and the attorney general, saying only, “Our petition will speak for itself.”
And it does: The Dayton administration’s response, filed Wednesday morning in Ramsey County District Court by special counsel David Lillehaug, confirms a fundamental difference between Dayton’s office and Swanson’s, and finds the governor arguing for a narrower construction as expected.
The administration’s filing directly questions the authority of the courts to order spending by the state government, adding that the attorney general’s proposed shutdown plan “exceeds what the governor considers to be allowed by the Minnesota Constitution.” In particular, Dayton’s filing takes issue with the suggestion that each “government entity” should determine what constitutes core services that should continue to be funded. “Every ‘government entity’ does not, and cannot, have the power to draw money from the state treasury on its own determination and demand,” the brief reads.
Instead, Dayton calls for the court to withhold action on a shutdown plan for now and instead appoint a mediator to help negotiate a settlement with the Legislature before the June 30 deadline. The filing suggests two former Minnesota Supreme Court justices, Chief Justice Kathleen Blatz and Justice James Gilbert, as possible candidates, noting that neither was appointed to the bench by a member of Dayton’s party. “For the time being, the court should forego any order that would hold or suggest that the members of a co-equal department of government have failed to discharge faithfully their duties,” the filing continues.
But Dayton also asserts, citing the state Constitution, that in the event of a government shutdown, the executive branch has the authority to make decisions about which expenditures are necessary to protect the public and deliver critical services.
The Dayton filings break services into lists of critical areas. At the top are services that protect public health or public safety, which include health inspections, medical care for current patients, transportation safety and general security of state property, along with sufficient administrative staff to execute such duties.
Second would be those that, if stopped for a matter of days, could cause disorder or severe economic impact to the state: state borrowing and tax collection, contract executions and administrative staff to carry those tasks out. At the third and fourth level are activities that can be suspended for anywhere from six days to eight weeks without running afoul of any laws or mandates. In any court order, Dayton says in his filing, the decision should focus on services at the first and second level only.
Specifically, Dayton’s recommendations include the retention of more than 1,000 employees to staff the Corrections and Public Safety departments. The Revenue Department would continue its fiscal processing responsibilities, veterans homes would remain open, and the Minnesota Management and Budget office would retain staff to manage cash flow and debt payments. The courts would also be funded under Dayton’s proposal. But 46 other state agencies would be closed. In total, roughly 13,000 executive branch employees would remain on the job after June 30. Another 22,500 state agency employees would be laid off, along with a hard-to-determine number of staffers at institutions such as the courts and the Minnesota State Colleges and Universities system.
Dayton’s plan would keep more than 5,000 employees at the Department of Human Services. His recommendation would continue support for entitlement cash, and food and health programs for those eligible as of June 30. Those programs include general assistance, Medical Assistance, MinnesotaCare and similar programs.
Dayton’s Human Services recommendations, however, note that “related vendor/provider payments will not continue.”
Budget status different this year
Whatever the courts decide about the contours of a shutdown, the absence of enacted budget bills this time all but ensures a harsher scenario than in 2005. There are even questions over whether funds from the only budget bill that was ultimately signed, agriculture, could be disbursed.
The impact on state employees would be far more widespread in 2011. In 2005, fewer than 9,000 employees were temporarily locked out of their jobs by the time the impasse concluded. The Legislature and Pawlenty also were able to avert park closings and other shutdown-related public effects.
What remained to be resolved then were six finance bills, including K-12 education and human services, which represented roughly two-thirds of the overall budget. Importantly, however, the state government finance bill — which has the most direct impact on the entities charged with administering government functions during a shutdown — was enacted before the 2005 shutdown.
Practically speaking, any special master selected by a court to oversee state spending in 2011 would be tasked with creating a skeletal, yet functional, state government from scratch, agency by agency.
Toward that end, the blueprint laid out in 2005 by special master Ed Stringer is expected to be of limited help this year. “The range of issues this time are much, much wider,” said an attorney who was close to shutdown legal machinations in 2005. “The scale is just so much larger.”
Perhaps the most significant wild card this year will be a pending constitutional challenge to the arrangement that softened the blow of the 2005 shutdown.
After the impasse was settled, Kaardal represented a group of GOP legislators in a lawsuit claiming that the arrangement to allow spending on essential state services circumvented the Legislature’s authority.
On its face, the argument was sound; the Minnesota Constitution is unequivocal regarding the separation of powers issue: “No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law.” Put another way, the argument is that the state can’t spend money the Legislature has not appropriated — period, thus pre-empting any claims about essential versus nonessential services.
The case was never adjudicated because events had mooted that claim by the time it was filed. But in 2007 an appellate court opinion made reference to “legislators’ compelling argument” and urged them to raise the issue again “if the events of 2005 repeat themselves.”
This time, Kaardal — a member of the arch-conservative Federalist Society and a political ally of the Minnesota Majority — is ready. He is currently shopping for legislators to join a motion in Ramsey County District Court and plans to file an action this week seeking a declaratory judgment that Swanson’s proposed course of action is unconstitutional. The Minnesota Voters Alliance, a conservative advocacy group, has already joined him on the motion.
“The cure is worse than the illness,” Kaardal says of the budget-by-judiciary process. “If there weren’t a court-approved safety valve, the Legislature and the governor would have to reach a deal by July 1.”
Sen. Sean Nienow, R-Cambridge, was a plaintiff in the 2005 case and says he would have no problem adding his name to a legal filing challenging the court’s authority to order spending this time around. “To me it seems pretty clear,” Nienow says. “The Constitution says you’re not going to spend money unless there’s a law that says you’re going to spend money. I don’t know how you can get around that.”
How Kaardal’s motion will be received this time, though, is an open question. The experience of 2005 lays out a precedent, experts say, but ultimately the decision will come down to weighing the state’s constitutional separation of powers against other obligations, including federal and state law and the U.S. Constitution.
Prisoners, for example, have a constitutional right to be treated a certain way or released. The state’s Medical Assistance program is at least half-funded by federal dollars. State troopers who provide for public safety, the argument goes, represent an essential service.
“You come into a place where all options involve some violation of some standard,” says Fred Morrison, a constitutional law professor at the University of Minnesota. “Now pick the one that’s least offensive.”
But even if Kaardal isn’t successful on the question of zeroing out state spending absent an approved budget, his efforts could have the effect of shifting the goal posts in the legal debate.
Any arrangement to spend state money absent a ratified budget is in itself compromising state law and governmental norms, which judges are generally reluctant to do. What Kaardal’s suit could do, then, is shift the frame of the debate.
“For the Ramsey County District Court judge, you have to balance not taking advantage of or supplanting the checks and balances and making sure that people aren’t sacrificed in a life, health and safety way,” said the attorney involved in the 2005 dispute. “Last time, the center of gravity was over the rate of spigot. Now [Kaardal’s motion will] say that rate should be zero.
“That’s very different,” the attorney added. “One leg of the stool being zero: That’s a harder position.”