Governor will unallot to balance the state budget

On Tuesday morning, the day after the legislature adjourned, the Governor held a press conference to announce that he is already in discussions with state commissioners to put together an unallotment plan to bring the state’s budget back into balance for FY 2010-11. The Governor intends to veto the legislature’s last-minute attempt to resolve the state’s budget deficit, which leaves a $2.7 billion deficit projected for the next biennium.

The Governor says his unallotment actions are likely to mimic the K-12 education shift proposed during the session, and target for cuts aids to local governments, welfare services and human services more broadly. The Governor is asking the public to e-mail him ideas for how to balance the budget at budgetideas@state.mn.us. He hopes to announce his unallotment plan well in advance of the July 1 start of the biennium to give those impacted an opportunity to prepare. However, some of his unallotment decisions will not take effect until the second year of the biennium.

Of course, there are lots of questions surrounding the Governor’s unallotment authority – so here is the information we have found so far:

The House Session Weekly published an interesting history of unallotment last May. Of note, the unallotment power has been used by Governors just four times in history: Quie unalloted $195 million in 1980, Perpich unalloted $110 million in 1986, and Pawlenty unalloted $281 million in 2003 and $271 million in in 2008.

The House Research Department also wrote up a more comprehensive brief on unallotment. It gets into issues like unallotment procedures, items subject to unallotment and the effects of unallotment on future budgets. A few facts from that document:

  • The Governor does notappear to have the authority to unallot from the legislative and judicial branches.
  • The Governor’s unallotment authority applies to any fund with a projected deficit for the current biennium – not just the general fund (note: look out for the Health Care Access Fund which could end up with a deficit in the FY 2010-11 biennium if the Governor’s line-item veto of General Assistance Medical Care is not reversed).
  • Unallotments made in the FY 2010-11 biennium may impact base funding in the following biennium. In other words, it’s possible that the Governor’s unallotments could turn into permanent reductions.

A few other things to remember:

  • The Governor does nothave to unallot to solve the budget deficit (although he said in during his press conference that it is his duty). The usual way of resolving such an impasse is for the Governor to call the legislature back into special session. Special sessions are relatively common; there have been 45 in Minnesota’s history, many of them to called to resolve budget issues not completed during the regular session. In contrast, Governors have only used their unallotment authority four times, and never at the beginning of the biennium.
  • The Governor cannot begin unalloting until the biennium begins on July 1, although he says he will announce his unallotment plans prior to then.
  • The Governor must consult with the Legislative Advisory Commissionbefore implementing any unallotments. The Commission does not have any authority to approve or reject the Governor’s choices. The Commission has just four permanent members: the majority leader of the Senate (Sen. Pogemiller), the chair of the Senate Finance Committee (Sen. Cohen), the speaker of the House (Speaker Kelliher) and the chair of the House Ways and Means Committee (Rep. Solberg). Other members may sit on the commission depending on which budget areas are being discussed.
  • The Governor must also notify the Senate Tax and Finance committees and the House Tax and Ways and Means committees within 15 days of making any unallotments.

There will be legislative hearings in the coming days, and we’ll pass along any new information.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
This entry was posted in Action Opportunity, Budget Process, Unallotment and tagged , , , , . Bookmark the permalink.

2 Responses to Governor will unallot to balance the state budget

  1. Minke says:

    Thank you so much for this and for the site in general. It is extremely helpful, and nothing I’m reading in the Strib or anywhere else makes what is going on so accessible in such detail. You have a real talent, and this is an invaluable resource.

  2. DJ says:

    When the Governor unallots funds must he account for the cost impacts to other parts of the state budget in the same way as the legislature has to when their bills are fiscal noted?

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