Minnesota Lawyer
Special Master Kathleen Blatz and Ramsey County Judge Kathleen Gearin have taken a relatively hard line in balancing a limited budgetary role for the judiciary and the need to keep certain services operating. (Submitted photos)
By all accounts, the Dayton administration’s shutdown playbook went something like this: Limited to only the most essential, core services, a hard but short-lived shuttering of state government would ramp up the pressure on intransigent Republicans and push the Legislature toward compromise.
Two weeks into the shutdown, that plan has been turned on its head.
With a large swath of state government still operational, more petitioners lining up every day to plead their cases for funding, and no budget deal in sight, it seems likely that the increasingly porous 2011 government shutdown could carry on for quite some time. (Noting the large and growing list of services exempted from the shutdown, one lobbyist recently likened the court orders in the case to a piece of Swiss cheese.) Political pressure on Republican lawmakers to deal with the administration has been substantially relieved, and Gov. Mark Dayton has been left with little besides the gubernatorial bully pulpit and a series of so-far fruitless offers suggesting different tax hike proposals.
At first, a near-lights-on shutdown like the state’s seeing now was almost assured not to occur. This was not 2005, many pointed out, noting that only the agriculture budget had been signed this time; in 2005, several major finance bills had already been enacted when the shutdown began.
And this time, Attorney General Lori Swanson and Dayton found themselves squarely in opposition to each other: Swanson wanted a soft shutdown that would allow much of the state to remain operational. Dayton, on the other hand, sought orders decreeing a much more limited range of essential services. His plan included withholding not only payments to health care providers but likewise a pair of scheduled July payments to local governments and the state’s school districts.
But it took just days for the Dayton administration to renege on its hard line with medical providers. Then a June 29 ruling from Ramsey County Judge Kathleen Gearin, while adopting much of the Dayton administration’s approach, approved the LGA and school payments — a significant broadening of the shutdown in just one decision.
“Gearin put a big parachute on the back of this thing,” GOP attorney Fritz Knaak said this week, “and it’s dropped to the earth pretty gently.”
But significant differences still existed between the Dayton and Swanson positions on funding for a host of nonprofits, businesses and social service providers. When those groups subsequently went to court to plead with shutdown Special Master Kathleen Blatz, the Dayton administration found itself in the awkward position of arguing against programs that help those with HIV, residential services for the vulnerable and battered women’s shelters.
”I’m certainly very sympathetic to the testimony of these folks,” said Dayton attorney David Lillehaug on July 1, sitting in an adversarial position across the mock courtroom from Swanson and Solicitor General Alan Gilbert. “There is also, however, Chief Judge Gearin’s order, where she is essentially adopting the governor’s list.”
By the following Monday, though, the administration had backed away from that stance. It now supported funding many of those programs, with more to come. In less than two weeks, the Dayton administration had substantially reversed itself and a soft shutdown was in motion.
Judicial backstops
While the shutdown is softer than many anticipated, the two judges at the heart of the legal wrangling over what is and isn’t essential have turned away the pleas of many groups seeking the reinstatement of dollars or state-provided services.
Faced with dozens of petitions from business, trade associations, nonprofits, private citizens and more, Blatz and Gearin have taken a relatively hard line when it comes to balancing a limited role for the judicial branch in budgeting and the need to keep certain services online.
“Clients may suffer hardships and fail to make the progress of which they are capable without the assistance of these nonprofits,” Gearin wrote in her original ruling. “Neither the good services they provide nor the fact that they may cease to exist without state funding is sufficient cause to deem their funding to be a critical core function of government.”
They have denied funding for residential services for the vulnerable, substance abuse programs and commercial licensing. Rest stops will remain closed, they ruled, despite the commercial concerns voiced by the state’s trucking association. Canterbury Park is on the verge of closure, its advocates claim, because Gearin has refused to allow state inspectors to work, bringing live racing to a standstill.
But at the same time, the big-ticket items such as health care providers, school payments, special education aid and local government aid were all sheltered from the shutdown. The Minnesota Zoo successfully made the case that it should remain open. And though the state lottery is closed, budget experts have pointed out that it enjoys the same kind of standing appropriation that allowed the zoo to reopen, and thus could be the subject of more legal wrangling.
To date, the political interests hit hardest by the shutdown are some of Dayton’s strongest backers: public employees, about 22,000 of whom were laid off. Those people are set to receive their final paychecks this week.
Still, through all the rulings made thus far, Blatz and Gearin have yet to expand the original June 29 order to any program or service outside of what was originally deemed essential, reasonably construed to fall under that umbrella or acquiesced to by the Dayton administration.
Broad appeals to general principles of public safety have been turned away. An appeal for funding from community rehabilitation clinics serving 5,000 severely disabled adults was rebuffed not necessarily on the merits of the program but because it was simply not seen as critical.
Blatz made it clear in one recent hearing. “I’m drawing some lines here,” she said, telegraphing coming rulings, “court-ordered lines.”
Questions remain
Even two weeks into the shutdown, though, there remain significant questions about the shape it will assume if the standoff proves to be a long one. First is a constitutional challenge brought by six GOP lawmakers and conservative attorney Erick Kaardal. The case takes a strict-constructionist line in arguing that no state spending can occur in the absence of a legislative appropriation, pursuant to Article 11 of the Minnesota Constitution. The hearing in that case is scheduled for July 27.
A few more pressing petitions before Gearin this week could also alter the shutdown landscape as it prepares to enter week three this Friday.
Polymet Mining, which is pursuing a controversial Iron Range mining project, has looked to the courts to order the state to continue work on its environmental review under a shutdown. Loggers from northern Minnesota have sought to overturn a suspension of contracts and land sales as well.
But a hearing Wednesday had the most potential chance to alter the calculus. A petition brought by legislative Transportation Committee chairmen Mike Beard and Joe Gimse looks to gain approval for more than $100 million in transportation projects around the state. The Associated General Contractors have advanced a similar case in their court filings, while the Dayton administration filed a brief this week arguing against such a move.
The chances that Gearin would agree with such an expansive approval of state spending appear slim, based on her prior rulings that even existing state contracts and possible economic hardship fail to outweigh constitutional considerations.
If the funding were approved, however, it would further diminish shutdown-related political pressures.
“If [Gearin] does something as significant as [approving] transportation projects, it’s over,” GOP attorney Knaak said. “At that point, come on — let’s put the [public] employees back to work and dicker at the Capitol for the rest of the summer.”
