November 17, 2017

Minnesota Legislative Update: Supreme Court Upholds Governor's Vetoes

In a decision issued yesterday, the Minnesota Supreme Court concluded that Governor Dayton’s line-item vetoes of the operating appropriations for the Minnesota Senate and House of Representatives did not violate a Governor’s authority to line-item legislative appropriations as provided for in Article IV, Section 23 of Minnesota’s Constitution. The Court also concluded that these line-item vetoes did not violate separation of powers principles contained in Article III of Minnesota’s Constitution by effectively abolishing the Legislature. Citing judicial restraint, the Court declined to resolve at this time the question of whether the line-item vetoes violated Article III as being unconstitutionally coercive. This decision means the current impasse between the Governor and Legislature will not be resolved until the Legislature reconvenes in February 2018. As noted by the Senate Majority Leader last night, this impasse will likely result in a more difficult and less productive session. From a long-term perspective, the decision has significant implications for services and functions previously considered essential when disputes between the Executive and Legislative branches result in a government shutdown. 

The Supreme Court’s decision in what it considered to be unprecedented circumstances — a lawsuit brought by one coordinate branch of government against another — addressed a number of issues with respect to a governor’s line-item veto authority and the separation of powers. With respect to appropriations Article IV, Section 23 of Minnesota’s Constitution gives the Governor authority to “veto one or more items while approving the bill.” Because the appropriations of funding for the House and Senate were an item of appropriation, and appropriations for coordinate branches of government are not expressly excluded, the Court concluded that Governor Dayton’s vetoes did not violate the plain language of Article IV, Section 23.

Based on the Legislature’s statutory authority to access previously appropriated funds sufficient to pay its estimated expenses and continue as an independent, functioning branch of state government until it convenes again, the Court concluded that the Governor’s line-item vetoes do not violate Article III of the state’s constitution by effectively abolishing the Legislature. The Court estimates that the Legislature needs approximately $26 million to fund its interim expenses from October 1, 2017 (the date the interim stipulation providing for funding from MMB expired) and February 2018 (when the Legislature reconvenes). Based on submissions to the Court, the Legislature currently has access to at least $26 million and up to $40 million in appropriated, unencumbered funds. Thus, in the Court’s view, it can sustain itself as an independent functioning branch of state government until it convenes again in regular session. 

Finally, the Court declined to decide at this time whether the vetoes violate Article III as unconstitutionally coercive. The Court views the impasse between the Governor and Legislature as primarily political — one the state’s Constitution compels them to resolve through the legislative process, including the process of appropriations. While that has yet to occur, the Legislature has access to the funding it needs to continue its legislative functions until it reconvenes next February, at which time it can exercise its constitutional powers unrestrained by the Governor’s conditions for a special session. While principles of judicial restraint restrained the Court at this time, the decision appears to leave open the possibility of revisiting this issue should the current impasse not be resolved during the 2018 regular session.

Legislature’s Response

Concurrent with the announcement of the Court’s decision yesterday’s morning, the Legislative Coordinating Commission (LCC), a bicameral commission that coordinates activities of and provides administrative and staffing support for the Legislature, met to discuss the implications of reduced or eliminated funding resulting from the Governor’s line item vetoes and the implications of the Court’s decision. A number of entities funded by the LCC testified to the detrimental effects of reduced or eliminated funding. Cal Ludeman, Secretary of the Senate, stated that absent an appropriation, the Senate would be out of money by December 1, and all staff would be furloughed. 

After learning of the Court’s decision, the LCC passed three resolutions. The first (LCC 3) transferred the LCC’s carryforward funds along with their 2019 appropriation of $17 million to the House and Senate to fulfill their constitutional obligations. An oral amendment was added prohibiting any of these funds to be used for payments on the Minnesota Senate Building (MSB). While concerns were raised about the impact to the state’s bond rating of not making debt payments on the MSB, members ultimately concluded that there are consequences from Governor Dayton’s decisions and that he must be held responsible for his choices. The second (LCC 2) suspends any benefits during staff reductions or furloughs in the event no legislative appropriation is authorized. 

The final resolution (LCC 1) restricts the Revisor from doing work for the Executive Branch. Members of the House majority were adamant that the Legislature not do work for the Executive Branch as long as the impasse continues. In response to concerns voiced by Senate leadership that the House and Senate be united in their approach to working through the impasse with Governor Dayton, a motion was made to table the resolution. However, this motion failed 5-6, and the resolution was adopted. 

With the adoption of these resolutions, the Legislature now has sufficient funding to operate at least until the regular Session convenes in February 2018 without furloughs or staff layoffs. However, the LCC no longer has FY2019 funding and, absent a resolution to the current impasse, all LCC operations will cease on July1, 2018. House and Senate legislative leadership intends to send Governor Dayton a bill early next session restoring funding for the Legislature and the LCC, and replenish carryforward accounts. 

Long-Term Implications for Future Government Shutdowns

In past disputes between the Executive and Legislative Branches resulting in a partial or complete government shutdowns, the Judiciary has authorized funding as needed for critical, core functions of a constitutional body. For example, during the 2011 state government shutdown, critical state operations impacting programs that directly affect life, safety and protection of property were ordered to continue by a district court judge. A special master was appointed to review petitions by affected parties. MMB estimates that approximately 80 percent of state funding was temporarily authorized in 2011, including state support to major health and human services programs, corrections and public safety functions and aid to educational institutions. Yesterday’s decision expressly rejects the “core function” approach, holding that Article XI, Section 1 of the constitution prohibits any money to be paid out of the state treasury in the absence of an appropriation. In the face of this unambiguous constitutional prohibition, the Court declined to order funding, even in instances where constitutional rights are at stake. Long-term, yesterday’s decision has significant implications for these critical services and programs when disputes between the Executive and Legislative branches result in a government shutdown.

Below are links to the Supreme Court ruling and responses from Governor Dayton and legislative leaders:

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