'Game of chicken' goes to wire

The state's ongoing budget impasse landed Thursday in Ramsey County District Court, where a packed courtroom of high-priced legal talent argued over whether and how much the court should intervene.

Chief Judge Kathleen Gearin said she would not issue a ruling this week, pushing final decisions into the last days before a massive state government shutdown would begin next Friday.

"There has never been such an extensive impasse regarding appropriations that I'm aware of at this stage in our history," Gearin said.

"It would be far better if this were resolved by the legislative and executive branches getting together," she said in her courtroom. From the outside, she said, it looks like "a game of chicken" with people's lives.

The state's constitutional dilemma has come to this: Attorneys for DFL Gov. Mark Dayton argued Thursday that the governor has the power to make spending decisions after the state's two-year budget ends June 30. The courts, they said, could do nothing without intruding on the separation of powers.

DFL Attorney General Lori Swanson made the case that people depend too heavily on government's critical functions to allow it to falter over a dispute between the Legislature and governor. Swanson has asked that the court appoint a "special master" who could administer the state's budget after next Friday.

Gearin on Thursday rejected Dayton's request for a court-appointed mediator in the dispute. She also turned aside a petition by four Republican senators who wanted the court to continue only government functions mandated by the Constitution, federal mandate or state statute.

"We're [facing] some excruciatingly painful decisions. This is a tough time for the state. People are anxious, people are concerned. ... They will be affected significantly by a government shutdown. The courts cannot make that better," Gearin said.

So far, a deal has proved elusive. Dayton and legislative leaders are scheduled to meet in negotiations on Friday and Saturday in another attempt to achieve a budget accord and avoid a shutdown. They remain $1.8 billion apart on the state's budget and cannot agree on how much the state should spend or whether it should raise new revenue.

A sign of the high stakes: The downtown St. Paul courtroom Thursday was jammed past overflowing by more than 200 people, including about four dozen lawyers representing Dayton, legislators, cities, nonprofits, school boards and state contractors crowded in the front of the courtroom and seated in the jury box.

The hearing was an odd assortment of arguments and backslapping from the state's top attorneys on one of the weightiest constitutional issues Minnesota has seen.

The lawyers included David Lillehaug, the DFL überlawyer representing Dayton; Hennepin County Attorney Mike Freeman; former Attorney General Mike Hatch, and Rep. Steve Simon, working for free on behalf of public defenders. In the mix: Eric Magnuson, a former chief justice of the state Supreme Court who decided -- and cited -- the last major constitutional spending issue. That case, over Republican Gov. Tim Pawlenty's 2009 unallotment, first came before Gearin and then was affirmed by the high court, with Magnuson in charge.

Despite the occasional titter, a current of intensity ran through the day as the lawyers tried to hash out how the state can function if lawmakers and the governor fail to agree on a budget.

Swanson said the court should simply order spending on core functions, even if the legal budget runs out, as was done during the partial government shutdown of 2005.

"We ask you in this court to step in to protect the constitutional rights of the people of Minnesota," Swanson said.

She said Gearin should order state money spent, even though the Constitution says only the Legislature can appropriate, because Minnesotans are also constitutionally promised that government exists "for the security, benefit and protection" of its citizens. Swanson's proposal would continue funding for schools and health care and would allow a special master to decide on individual requests.

Unlike the 2005 shutdown, when Pawlenty agreed with that basic premise from Hatch and a court complied, this time the governor disagrees.

Lillehaug said that if government shuts down, Dayton can make all the spending decisions the state needs.

"He will take executive action to protect the lives and safety of the people of Minnesota. ... As of now he is not asking a court for approval of that," Lillehaug said.

Gearin did not say how she might sort out the dispute between the governor and attorney general, but said that even if Swanson prevails, no one should expect all programs -- even valuable programs -- to be funded in a shutdown.

Gearin said a court-appointed special master "will have a far more restrictive" mandate than in 2001 or 2005.

"I'm not happy about this," Gearin said, saying such limits are dictated by the Constitution.

Politicians, she said, should figure out a political solution rather than relying on the courts.

"The clock is ticking," she said.

Concluding the morning session, Gearin urged the governor and legislators to keep their communications lines open. "Please," she urged, "keep talking."

Rachel E. Stassen-Berger • Twitter: @rachelsb Bob Von Sternberg • vonste@startribune.com