The Minnesota Supreme Court holds oral arguments Monday on a case that could impact how the state's budget gets balanced.
Gov. Tim Pawlenty is appealing a ruling that said his decision to unilaterally cut the budget last year crossed a constitutional line separating the powers of the governor's office and the Legislature.
The legal dispute has the potential to make an already difficult budget situation much worse.
WITH LOSS, STATE IS IN "DIFFICULT SPOT"
The argument before the Supreme Court centers on a relatively small budget cut to a food program, but the outcome could have big implications. Gov. Pawlenty is appealing a lower court judge's ruling, and the Minnesota Supreme Court will decide the issue.
"We have gone through 10 different scenarios including one where we lose the lawsuit, win the lawsuit," said Pawlenty, a Republican. "The possibility of losing the lawsuit would put Minnesota in a difficult spot."
It would be a difficult spot because it could add another $2.7 billion to the state's nearly $1 billion deficit in the current two-year budget cycle.
The case centers around whether Pawlenty overstepped his authority when he cut spending unilaterally last year, because he had plenty of time to work with the Legislature to resolve the budget stalemate.
In May, Pawlenty decided to accept all of the spending bills sent to him by the DFL-controlled Legislature in the closing hours of the session, but vetoed the last-minute tax bill that paid for the spending.
Using what's known as his unallotment authority, he then unilaterally cut $2.7 billion from the state's budget to make up for the imbalance.
JUDGE RULED PAWLENTY CROSS THE LINE
Ramsey County Chief District Judge Kathleen Gearin blocked the cut to the food program at the heart of the lawsuit, ruling that Pawlenty "crossed the line between legitimate exercise of his authority to unallot and interference with the legislative power to make laws."
She wrote that the unallotment provision was meant for an unforeseen crisis and "is not meant to be used as a weapon by the executive branch to break a stalemate in budget negotiations with the Legislature."
Democrats, who have submitted briefs in the case, argue that Pawlenty created his own emergency by signing spending plans while striking down the tax plan to pay for it.
They accuse the governor of trampling on the separation of powers in the Constitution. Pawlenty argues that a shortfall in revenue created an emergency, even if it was foreseeable for some time.
NO CONTINGENCY PLANS YET
DFL House Speaker Margaret Anderson Kelliher says if the court agrees with her caucus, it will make the end of the legislative session even more difficult. Still, she says her caucus is not making any contingency plans in case the court reinstates Pawlenty's cuts.
"We are first focused on the $1 billion gap that we face right now," said Kelliher. "Our first job is to balance that part of the budget. And we will wait to hear what the court has to say."
Republicans in the Minnesota House say Democrats should be watching the case closely. Gov. Pawlenty has been urging the Legislature to put into law the cuts he made through unallotment. Lawmakers have been reluctant to do so, preferring to let Pawlenty pay the political price for cutting spending.
House Republican Minority Leader Kurt Zellers says Democrats will have to do some heavy lifting if the court rules against Pawlenty.
"They own this issue now," said Zellers. "If you truly believe -- like they said time and time again -- that this is unconstitutional, then it's up to them to find the $2.7 billion."
Zellers says his caucus has not made any contingency plans for the ruling.
DFL Senate Majority Leader Larry Pogemiller says his caucus also hasn't considered the impact of a ruling, saying his focus is on the current budget deficit.
Even some interest groups who filed friend of the court briefs opposing Pawlenty's action aren't optimistic they'll ever see any more money.
Gary Carlson, a lobbyist for the League of Minnesota Cities, said his members filed a brief in hopes of restricting such action in the future. But he expects the $192 million Pawlenty cut from aid to cities is gone for good.
"Even if the court were to overturn the entirety of what he did, with the immense hole that that would create in the budget, I just have to personally believe that the first thing legislators would do would be to reinstitute exactly what the governor did," said Carlson.
Peter Knapp, a professor at William Mitchell College of Law in St. Paul who follows the high court closely, said the justices would likely try to decide the case on the wording of the statute if possible, and would address whether the law is constitutional only if necessary.
Pawlenty appointed four of the seven justices on the court, including Chief Justice Eric Magnuson, but Knapp noted that it's the same court that declared Democrat Al Franken the winner of Minnesota's protracted U.S. Senate race recount last year over Republican Norm Coleman. Magnuson announced last week that he is leaving the court at the end of June.
"It's conservative in the sense that it's cautious, it's conservative in the sense that it's not activist, but it's not conservative in the sense that it's ideological," Knapp said.
CASE COULD IMPACT PAWLENTY'S PRESIDENTIAL AMIBITIONS
The ouctome of the case may also have implications for Pawlenty's presidential ambitions.
A victory would cement his ingenuity in handling Minnesota's budget problem, which has only grown worse since then. But a loss could hand his national political opponents an issue by casting him as an executive who overstepped the law and exceeded his authority.
Either way, Pawlenty's assertive use of executive power will be a focus of attention in any campaign.
"He really doesn't want to be dealing with this," said University of Minnesota political scientist Larry Jacobs. "What he wants is a clean exit from being governor and a clear runway to run for president."
It isn't certain when the court will rule on the appeal, but the Supreme Court agreed to take the case on an expedited basis. That could be a signal that the Supreme Court justices intend to act quickly on the case.
Associated Press Writer Brian Bakst in St. Paul contributed to this report.