Legislature v. Dayton: Memos stake out funding positions

The Legislature can function through August 2018 even without a new appropriation to replace funding Gov. Mark Dayton vetoed away in May, according to a memo his attorney filed with the Supreme Court on Thursday.

While not directly disputing that, the Legislature’s attorney said in a separate Thursday memo that the issue is not nearly that simple.

Much of the money that the governor claims lawmakers have at their disposal already is spoken for, legislators argue. Besides that, the other branches of government lack authority to force lawmakers to exhaust their discretionary funds, their memo argues.

The memos were filed Thursday to meet a deadline imposed by the court on Sept. 28. It required both sides to identify how much money the House, Senate and Legislative Coordinating Commission (LCC) have on hand that could be used to keep the Legislature functioning without new appropriations for the House and Senate.

The memo signed by Dayton’s lead attorney, former Supreme Court Associate Justice Sam Hanson, contends the Legislature has almost $52 million at its disposal.

Hanson includes in that total $3.9 million in carryover funds from the Legislative Coordinating Commission, a 12-member panel that includes both House Majority Leader Kurt Daudt, R-Crown, and Senate Majority Leader Paul Gazelka, R-Nisswa. It oversees and funds panels like the Legislative Salary Commission and support offices like the Revisor of Statutes and the Legislative Auditor’s office.

Hanson also includes in his sum the entire unspent portion of the LCC’s 2018-19 biennial appropriation, which he says totals $31.7 million as of Oct. 2.

In addition, the lawyer told the court, the House is sitting on $10.7 million in unspent carryover funds from previous appropriations, while the Senate has $5.6 million.

“With this amount, even using the respondents’ statement of anticipated monthly expenses,” Hanson wrote, “the funds would not be exhausted until approximately into August 2018.”

Hanson allows that, if the already allocated portion of the LCC’s funds — essentially all of its 2018 appropriation — were excluded from that sum, the Legislature could still keep its lights on into May 2018.

The numbers from the Legislature’s attorney, Doug Kelley, roughly match Hanson’s. One exception is the LCC’s 2018 cash on hand.

Hanson says $14.2 million of the commission’s overall $17.4 million 2018 allocation remains unspent. Kelley says $14.1 million of what he says is the LCC’s $17.5 million 2018 appropriation has been spoken for. Both agree the commission’s 2019 funding is not yet allocated.

Kelley acknowledges in his memo that lawmakers can access House and Senate carryover funds as well as money appropriated to the LCC.

However, Kelley challenges several assumptions implied in the Hanson memo.

Most importantly, he asserts that neither the governor nor the courts have authority enough to demand how legislators spend money.

“The use of these funds lies solely within the discretion of the Legislature,” Kelley writes, “and so no branch may force the Legislature, directory or indirectly, to exercise that discretion.”

Kelley also asserts that the only “proper” funding available to the House and Senate are their respective appropriations, which Dayton took away with his vetoes.

“The governor used his line-item veto to eliminate the Legislature’s operational budget,” the Kelley memo states. “The governor now demands that the Legislature exhaust all of its carryforwards and all of the funding for the LCC.”

That, the lawyer contends, essentially would force the LCC to “voluntarily join the Legislature in plotting its own demise.”

Yet it’s not so clear that the LCC can even do that, Kelley indicates. For one thing, he writes, some of the LCC’s budget comes from constitutionally dedicated funds and much of it can only be spent on clean water, parks and trails, arts and the like.

Besides that, Kelley’s memo argues, the Legislature’s legal authority to access LCC money is limited to transfers of “unobligated balances among general fund appropriations.” If the Legislature spends the LCC’s money, Kelley said, the commission will be unable to meet its obligations.

Finally, he argues that the LCC acts by a majority vote of its members, who would have to approve any transfer of LCC funds for use by the Legislature. No one can tell those members how to vote, Kelley’s memo says.

“The Legislature respectfully requests that this court affirm the Legislature’s status as an independent, co-equal branch of government,” the Kelley memo concludes.

What’s next?

It’s anyone’s guess what the Supreme Court will do with the information — if anything. In their Sept. 8 order, justices upheld Dayton’s veto as constitutional while also affirming the Legislature’s right to exist.

Dayton said he used his veto power to reject an appropriation in order to force the Legislature back to the bargaining table in a second 2017 special session. Dayton line-item vetoed only the House’s and Senate’s funding, but otherwise approved the rest of the Legislature’s finance and tax bills.

Dayton said he would not call a special session unless lawmakers first agreed to get rid of several tax breaks and two policy provisions from those bills that he found objectionable. They refused and sued the governor.

Rep. Pat Garofalo, R-Farmington, said in an interview Friday that at this point he finds the governor’s strategy baffling.

Though Dayton argued in Ramsey County District Court that the judiciary has the power to provide emergency funding for the Legislature, now he seems to be saying that — because the Legislature has enough money to operate until the summer of 2018 — that the court doesn’t need to do anything.

“It’s the mother of all circular arguments,” Garofalo said. It’s also the demise of Dayton’s leverage, according to Garofalo.

Now that it is clear, he said, that the Legislature has money enough to operate at least until February — the start of the next legislative session — Dayton has no leverage left with which to force the Legislature’s hand.

“Either the courts are going to fund us, or we’re going to limp along until February, and then we’re going to pass a new bill for him to sign,” Garofalo said. “Or we’re going to pass a bill that he is going to veto — and then we’re going to override him.”

Either way, he said, Dayton’s leverage to force new negotiations is gone.

That, Garofalo adds, would seem to negate the rationale for using the line-item veto on the Legislature’s funding in the first place. “It just doesn’t make any sense,” he said.

David Schultz, the Hamline University political science professor and court watcher, agrees. “I think he lost that ability to bargain on the policy issues a long time ago,” Schultz said.

Schultz notes that in its Sept. 8 order, the court said “the other branches should resolve these doubts through the political process.” And while their order that day verified Dayton’s line-item veto authority, it left many questions open.

Its only active command — that the two sides head to mediation — came to nothing when the parties declared themselves at an impasse on Sept. 22. Now, Schultz said, it is unclear what the Supreme Court will do next.

“If they wanted to get out of it, they would actually have to issue a decision now that says, ‘This is non-justiciable, we are not ruling on the merits and that’s it — you guys are on your own,’” he said.

“Short of that,” Schultz added, “they are leaving everybody in confusion. I don’t think the court knows what their next step is at this point.”