Pawlenty to appeal ruling

Gov. Tim Pawlenty said Thursday he will appeal a judge's ruling that he overstepped his authority by unilaterally cutting the budget last spring.

Pawlenty made the announcement less than one day after Ramsey County Judge Kathleen Gearin ruled the governor "crossed the line" between his unallotment authority and interference with legislative powers. Gearin ordered the reinstatement of a $5 million food program the governor cut last summer.

Pawlenty said Judge Gearin "has inserted herself in the middle of a political dispute," and that she misapplied and misinterpreted the unallotment statute.

"That degree of involvement by the court is concerning, to say the least," Pawlenty said during a news conference at the State Capitol.

Pawlenty used his unallotment authority in July to cut $2.7 billion of state spending to balance the budget, after he and the Democratic-controlled Legislature failed to reach agreement on the state budget. The Democrats had wanted to balance the budget through a combination of spending cuts and raising taxes, but Pawlenty vetoed their tax bill.

Following the unallotment, pro-bono lawyers working on behalf of six people enrolled in the Minnesota Supplemental Aid Special Diet program sued over the $5.3 million reduction. The program supplies cash grants to elderly and disabled people on fixed incomes to help them with special dietary needs stemming from other health concerns.

Gearin ordered the Pawlenty administration to reinstate payments for the food program from Nov. 1 and leave them in place until further notice. The next hearing in the case is set for March.

"If we can't use unallotment now, I don't know how or when we could."

Pawlenty didn't give an exact timing for the appeal, saying he is working with his general counsel and the Attorney General's Office to file it "as quickly as possible."

Pawlenty said he will work with the Legislature on solutions to a $1.2 billion budget shortfall during the upcoming legislative session, which starts Feb. 4. But he said he believes unallotment is justified under certain circumstances and wouldn't rule out using it again.

Gearin said unallotment should only be used in cases of unforeseen economic crisis, but Pawlenty said that's exactly what Minnesota is experiencing.

"If we can't use unallotment now, I don't know how or when we could," Pawlenty said.

Gearin's ruling only affects the special diet program, but other groups affected by Pawlenty's cuts could file their own lawsuits. That could include K-12 education, local governments, human services agencies and higher education.

The judge's ruling is prompting at least one group, the League of Minnesota Cities, to reevaluate an earlier decision not to challenge Pawlenty's cuts in court. Pawlenty cut $64 million in aid payments to cities in 2009, and the cities are scheduled to lose $128 million more in 2010, the league's lobbyist Gary Carlson said.

But Carlson said cities are not necessarily looking at the judge's ruling as a promising sign, because it could add uncertainty to local budgets.

"You could have a victory in the courts and yet the state budget still has an immense deficit," he said. "Everything that is overturned in the governor's unallotment will mean that the deficit that has to be resolved in 2010 is going to grow."

Perhaps anticipating the possibility that some of his other cuts would be challenged, Pawlenty planned to send a letter Thursday to legislative leaders proposing that they work out a plan to ratify one of the cuts --- delayed payments to K-12 education.

Pawlenty was hopeful that because legislative leaders had also included the payment shift in their budget proposal, they would work to ratify the action so that up to $1.7 billion was no longer in question. He suggested he could call a one-day special session to address the issue if an agreement is reached.

House Speaker Margaret Anderson Kelliher, a Democrat from Minneapolis who is running for governor, said she's willing to consider Pawlenty's proposal, but only if he finds the money to pay for the shift over the long term.

"We're all going to look at it if the governor has a new idea around this to pay back the payment shift and it's something that is real and is going to help our kids in the classroom," Kelliher said.

Kelliher said she thinks a majority of Minnesotans favor a mix of spending cuts and tax increases to balance the budget. But Republican House Minority Leader Kurt Zellers said voters will punish DFLers if they continue to push tax increases. He said the state can't afford it.

"If their only solution is 'we have to raise taxes,' I think it's going to be a tough legislative session," Zellers said. "I think the voters, the taxpayers of Minnesota are going to have to go to them and say 'Here's what we prefer.'"

A spokesman for DFL Senate Majority Leader Larry Pogemiller said Pogemiller and other DFLers won't comment on Pawlenty's statement because they haven't received anything in writing and didn't see his news conference.

As for Gearin's ruling, experts and legislators from both parties, agreed it could have major implications for the upcoming legislative session and how the $1.2 billion deficit is resolved.

State Rep. Marty Seifert, R-Marshall, who is running for governor, said the judge's ruling will "raise the stakes" again for discussions of tax increases and spending cuts.

"I hope we don't get into the back and forth, but sit down and put a tough pencil down on paper and ask -- what in the 21st century can we do differently in government to downsize, right-size and economize those programs," Seifert said on MPR's Midmorning program Thursday.

Assistant Senate Majority leader Tarryl Clark, DFL-St. Cloud, said leaders are already looking for ways to make cuts to balance the budget.

"We're going to end up having to need shared sacrifice from everyone," Clark told Midmorning.

Steven Schier, a political science professor at Carleton College, said the judge's decision could lead to a budget stalemate if Democrats continue to insist on tax increases, and Pawlenty continues to veto any tax increases. But Schier said the decision puts more of a burden on Pawlenty.

"The governor is not going to be able to avoid dealing with the Legislature," Schier said.

(MPR's Elizabeth Dunbar and The Associated Press contributed to this story.)

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