Gov. Pawlenty announced his plan to close the state’s $2.7 billion budget shortfall today. Since the DFL-controlled legislature and Republican governor were unable to come to a negotiated budget agreement at the end of the 2009 session, Gov. Pawlenty exercised his executive authority to unallot state appropriations. Gov. Pawlenty stated that in these tough economic times, state government would be expected to function at a 96% level of what it is operating on now. “State government must tighten its belt in hard times just as families and businesses do.” Gov. Pawlenty said the cuts he is making now will make Minnesota more competitive, not less, and is the only alternative to raising taxes on Minnesota’s hard-working families.

As part of his targeted plan, $300 million will come from cuts in local government aid, $236 million from health and human services, $100 million from higher education, and $1.8 billion in deferred payments to K-12 schools. He also reduced funding for state agencies by 2.25%, in addition to the 5% cuts they received during the session. Gov. Pawlenty  stated that a number of the reductions were weighted to the second year of the biennium so that the legislature would have an opportunity to address some of the unallotments during the 2010 legislation session. 

The Legislative Advisory Committee is scheduled to meet this Thursday to discuss Gov. Pawlenty’s unallotment strategy. By law, the governor has to consult with legislative leaders about his plan but does not have to get their approval. According to Speaker of the House Margaret Anderson-Kelliher,(DFL-Minneapolis), the meeting will focus on the impacts of the cuts to Minnesotans. Gov. Pawlenty has stated that the cuts were not finalized and that he would use the Legislative Advisory Committee meeting to hear additional concerns and make any necessary changes.

The unallotment tool, established in 1936, was designed to give the governor the chance to balance the budget near the end of a fiscal cycle when revenues fall below expectations due to an emergency or extenuating circumstance. It has since rarely been used and a number of organizations are questioning the constitutionality and legality of unalloting in order to balance the budget at the starting of the budget cycle. The League of Minnesota Cities and other health and human services organizations  are looking into the possibility of a lawsuit against the state or Gov. Pawlenty himself in an effort to stop the cuts.