Limiting a governor's use of unallotment most likely will see debate in 2010, local lawmakers said Tuesday.
While Democrats said doing away with unallotment is preferred, no governor of any party would allow such action to become law. Instead, Rep. Larry Howes, R-Walker, said the powers should be limited.
"Even if it's a Democrat governor and a Republican-controlled House, I would still want the governor to have that little bit of an ace up his sleeve," Howes said Tuesday night. "I really think that does help. Putting a limit on what they can unallot would stop them from taking that process to the next level because they can't complete the job. They'd have to call a special session."
Howes and other local legislators answered questions from about 10 people who attended a Bemidji Area Chamber of Commerce-sponsored forum at Bemidji City Hall.
He would limit the amount the governor could unallot to 4 percent or less of the General Fund, and specify which agencies the money could be taken.
"Changing it a little bit and limiting the power would be a good idea," Howes said. "Taking it away would be vetoed by a governor."
Democrats were critical of Gov. Tim Pawlenty, saying they sent him a balanced budget -- which called for $1 billion in new revenue -- but that he vetoed the tax bill funding their spending.
As a result, Pawlenty used his line-item veto to ax $300 million from a health program for destitute adults and will unallot the remaining $2.7 billion gap between the spending bills he signed and the tax bill he vetoed.
The governor has powers to unallot, or take back legislatively appropriated funds, only in an emergency situation toward the end of a biennium to balance the budget, said Sen. Rod Skoe, DFL-Clearbrook. It has never been used before to balance a new budget as a biennium begins.
Pawlenty instead wanted to borrow $1 billion, to be repaid by the annual tobacco settlement the state receives. Lawmakers soundly trounced that idea, saying it was bad fiscal policy to borrow money to pay for operational costs, said Sen. Mary Olson, DFL-Bemidji.
"I could not see a compromise coming from the governor's office," she said. "I have to wonder if this wasn't the governor's plans from the very beginning. ... It's hard to understand, because he didn't propose those cuts in his initial budget."
She cited Tuesday's press conference at which Pawlenty announced he would not seek a third term, "he was saying in an almost nonchalant tone of voice that these cuts really weren't going to make that much of a difference to people. That may be true of some of the people in this state, particularly people that the governor's policies tend to favor, but there are going to be a lot of people, particularly in our district, who are going to be devastated by the cuts at the level he's proposing."
Rep. John Persell, DFL-Bemidji, said "not one constituent said they would go along with" borrowing for ongoing expenses and repaid by the tobacco money. "I was going with the voters here."
Use of unallotment is an example of the erosion of the legislative branch's power, not only in Minnesota but nationally, Skoe said. "The executive is there year round, with the agencies year round, and they tend to need powers to fill in the times when the Legislature isn't there."
The Legislature drafts modest powers for those times, and the current potential use of unallotment to balance the budget is the erosion, he said, adding he always votes against bills that usurp legislative authority, including last year's constitutional amendment to raise the state's sales tax for outdoors and cultural/heritage spending.
"It's a continual erosion of the Legislature's jurisdiction," Skoe said. "There will be efforts to change this in the future. Whoever is governor, no matter the party, is going to veto it."
There was a bill submitted in the last days to change the governor's powers of unallotment, but it didn't get anywhere, said Rep. Brita Sailer, DFL-Park Rapids.
"Already there was indignation and a bill to do this," Sailer said. "I think we will be looking at it again because the unallotment was put in place ... to be a stopgap, to deal with a problem in between sessions. This clearly is not what happened this time around."
Aside from a possible constitutional challenge, Sailer said that "it doesn't seem to be the way that people in Minnesota want to have their finances decided. If we wanted one person making all the decisions, that is how we would have our Constitution. But we don't"
Olson said the five months' work the Legislature did to provide a budget was not a suggestion for Pawlenty, it was a budget based on what Minnesotans wanted.
Skoe said the DFL-controlled Legislature compromised by accepting a school payment shift of nearly $2 billion and lowering tax increases from $2.2 billion in the Senate bill to $1 billion. The governor refused to accept any new revenues.
"Absolutely no way over my dead body" is how Howes characterized both the governor's view over new taxes and the DFLers' view over borrowing for ongoing expenses.
But Howes said a bill was floated in the final days offering $500 million in bonding and $500 million in new taxes. "The compromise would be to borrow $500 million and you tax half of it ... that's a compromise."
A bill to do that was left at the House speaker's desk , he said. "It did not make the muster in the final day, but it's something I think the governor might have just slide by."
Pawlenty, in his news conference Tuesday, said he will target most of hi s unallotments to the second year of the biennium.
A constitutional balanced budget provision is really "a prohibition against interbiennial borrowing," he said, "but nonetheless it functions as a balanced budget requirement. We don't want to get too far into the biennium and not have a certain plan about how this budget is going to balance."
As time goes on, there are fewer options, he said. "You want to have a pretty clear picture on the front end of the biennium rather than on the back end, because your options become more limited.
"But it is also true for many of the unallotments, we will make them effective for the second year of the two-year budget cycle so that if the Legislature chooses to take a different approach or do something different, they'll have that chance," Pawlenty added.
Howes believes that will be true also for the cut health care spending under the General Assistance Medical Care program, saying any improvement in the economy will fuel more tax dollars to restore the program.
Olson, however, was leery. "You restore it, you have to have money, and we have no money."
Skoe's fear is the $3.8 billion potential deficit at the end of the next biennium, which remains unsolved through unallotment this coming biennium.