Supreme Court Rules in Dayton's Favor in Veto of Legislature's Budget

November 16, 2017 06:23 PM

The Minnesota Supreme Court on Thursday upheld Gov. Mark Dayton's line-item veto of the Legislature's operating budget, declining to referee a political dispute between two co-equal branches of government that it said could resolve the issue themselves.

The 5-1 decision handed Dayton a major legal victory as he seeks to rework costly tax breaks and other measures that he signed into law this spring as part of a new state budget.

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And it left the Legislature on uncertain financial footing.

""My message to Minnesotans is that I'm sorry," House speaker Kurt Daudt said. "I am sorry that our Governor is embarrassing our state right now and I hope that we can quickly resolve this."

Daudt said the House and Senate needed to unite to defend the legislature - a branch he said should have the same power as the governor. 

"The ruling takes that away and I have lost my trust in him," said Daudt. "We need to get back to the table and work together." 

The ruling overturned a lower court decision that deemed Dayton's action unconstitutional. But the high court said the state constitution does not allow the courts to order funding for the Legislature without an appropriation. And it said the Legislature has the authority to tap enough money to continue operating — at least $26 million and up to $40 million — until it reconvenes Feb. 20. It rejected the argument that Dayton violated the constitution by effectively abolishing the Legislature.

RELATED: Dayton Blasts Legislators, Even as He Allows Budget Bills to Become Law

The Legislature took initial steps earlier Thursday to free up enough money to continue paying its members and staff. But top lawmakers said they may still run out of funds in early 2018. Both the House and Senate had halted out-of-state travel, member per-diem payments and other expenses to stretch out their funding.

Writing for the majority, Chief Justice Lorie Skjerven Gildea said this was the first time the court has had to resolve a lawsuit brought by the legislative branch against the executive branch.

"We conclude in these unprecedented circumstances that proper respect for our coordinate branches counsels judicial restraint," she wrote.

Associate Justice G. Barry Anderson dissented, writing "this is not the occasion for judicial restraint." He said he believed Dayton's line-item vetoes were unconstitutional violations of the separation of powers between the two branches of government, and that failing to act "permanently tilts the balance of power in favor of the Executive."

Associate Justice David Stras did not participate.

The ruling puts to rest a nearly six-month legal battle that poisoned relationships between the Democratic governor and top Republican leaders — while leaving the state's new budget that Dayton sought to rework untouched.

And taxpayers will pay heavily for the fruitless legal battle, fought by high-powered lawyers billing more than $300 hourly. As of Oct. 13, Dayton's legal fees totaled nearly $330,000. But the Legislature's legal fees are a massive question mark. The lawmakers' legal team will soon collect a lump-sum payment for the entire lawsuit.

Dayton zeroed out the Legislature's $130 million operating budget while signing the rest of a roughly $46 billion, two-year budget in late May — a last-ditch bid to force lawmakers to scale back several expensive tax breaks like a cut for wealthy estates and freezing the state's cigarette taxes. Dayton also wanted Republican leaders to retool changes to how teachers are licensed and remove a duplicative rulemaking ban on issuing driver's licenses to immigrant living in Minnesota illegally.

But top Republicans were steadfast in keeping the state's new budget unchanged, and sued Dayton instead. Dayton accused them of grandstanding for political purposes, saying the Legislature could easily access additional money.

Senate Majority Leader Paul Gazelka said he was shocked. He said the high court did not recognize the hardship ahead for the Legislature as the money dries up.

House Democratic leader Melissa Hortman says the governor and Legislature need to return to the bargaining table as soon as possible.

Dayton responded with this statement following the ruling:

"I am very pleased that the Supreme Court has upheld my line-item veto authority, which is established in the Minnesota Constitution. The Court has also found that the Legislature has access to at least $26 million to continue its full operations until it re-convenes in February. Therefore, there was no need for them to have initiated this lawsuit and imposed its costs on our state.
 
"Thus, the Legislature has no reason to resume negotiations to restore its vetoed funds and to correct its excessive special interest tax reductions, which will jeopardize Minnesota's future financial stability. So it is time for us all to agree that this dispute has been concluded and resume working together for the best interests of Minnesota."

Meanwhile, legislative auditor James Nobles said reserve funding will not be enough for his office to continue operating through February. 

"I will have to lay off 63 LOA staff," he said. "Shutting down LOA would undermine legislative oversight, damage the state's credit rating and put at risk the ability for the state to receive federal funds." 

KSTP's Cleo Greene contributed to this story
 

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Associated Press

(Copyright 2017 by The Associated Press. All Rights Reserved.)

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