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Shutdown funding explained

  • Article by: FRED L. MORRISON
  • June 23, 2011 - 9:20 PM

With no budget agreement in sight and only a week until deadline, it's beginning to look like all the Minnesotans who have wondered what a government shutdown would really mean will soon find out.

In a nutshell, the Minnesota Constitution provides that no money can be spent without a legislative appropriation (Article 11, Section 1).

The provision seems absolute, but as with most things, it's not that simple.

The U.S. Constitution is the "supreme law of the land," and its provisions prevail in a conflict with a state constitution. Even if no appropriations legislation is passed in Minnesota, certain federal requirements will provide for some of the state's pressing needs.

The due process clause of the U.S. Constitution's Fourteenth Amendment and several provisions of the Bill of Rights require that the state provide at least minimum standards of care for anyone in its custody.

Therefore, having assumed responsibility for residents of state prisons and mental institutions, the state has a duty to provide for them and cannot plead the absence of an appropriations act.

The contracts clause of the U.S. Constitution prohibits the state from unilaterally altering contracts. The federal obligation to honor a contract outweighs any state legal requirement of an appropriation, so if the state has contracted for goods or services, it has to pay.

Also, the state must comply with any valid federal legal requirements, including grant agreements between the federal government and the state, such as social welfare programs and highway construction projects.

Each agreement would require careful examination to determine whether it obligates the state to provide a service in return for federal funding or is simply an offer of matching funds. The federal law creating the grant program overrides state law, including requirement of an appropriation.

Even some provisions of the Minnesota Constitution itself conflict with the appropriations clause. Article 1 contains the Bill of Rights, which parallels the protections discussed for citizens in the custody of the state or its officials.

Article 6 (Section 5) provides that judges continue to receive salaries during their term of office. Since it is a more specific requirement, it would override the appropriations provision, thus protecting judges (but not their staff members).

Article 14 creates a Highway User Tax Distribution Fund that receives gasoline taxes and vehicle registration fees. It is distributed to the Trunk Highway Fund that supports the Department of Transportation and to counties and cities in accordance with a constitutional formula.

While the Legislature has some role in this process, the Minnesota Constitution seems to make this distribution automatic, so MnDOT may have an independent constitutional source of funding (the intention when the article was added to the Constitution early last century).

Schools also may have a claim to funds (Article 13, Section 1), since the state Constitution places a duty on the Legislature to establish and provide funding for a system of public education. The courts can step in if the Legislature fails to fund.

As for parts of state government not covered by federal Constitutional and legal requirements, an absence of appropriations legislation might not be as dire as anticipated.

First, the governor, members of the Legislature, other constitutional officers and probably commissioners continue to be officers of the state, whether or not they are being paid. They have taken oaths to fulfill the duties of their offices, and no clause excuses them if their checks don't arrive.

In fact, the absence of pay for these individuals during the budget impasse may be conducive to reaching a final settlement. This rule does not apply to state workers who are not officers of the state.

Second, as fallback protection, many services can be (and frequently are) provided by county and municipal governments. Sheriffs provide police protection and city and county health departments inspect food, for example.

Many agencies rely on state support to pay for their services, so some painful choices may be necessary during the budget impasse.

Third, when the budget impasse is resolved -- and it will be -- many provisions can be retroactive, compensating local governments, school districts and even individuals for services they provided during the shutdown.

A final word of caution for those addressing the budget crisis: Be wary of interim solutions that may encourage its continuation.

Funding a broad range of interim services may cause both sides in the conflict to harden their positions. The temporary fix could become a semipermanent solution -- the worst of all possible outcomes.

The author is professor of constitutional law at the University of Minnesota Law School. He was the Research Director of the Minnesota Constitutional Study Commission when the current version of the Minnesota Constitution was readopted in the early 1970s.

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