State government funding power grabs, part two: The auditor's case

Politics nowadays, even in Minnesota, is as bare-fisted as it is underhanded.

Another reminder came last week, when the Minnesota Supreme Court heard oral arguments in a constitutional showdown over DFL Gov. Mark Dayton's attempt to veto appropriations for the GOP-controlled Legislature.

Dayton's lawyer, complaining that Republicans started it by prescribing Dayton a legislative "poison pill," also dismissed as "hyperbole" suggestions that the governor had in turn "defunded" or "abolished" the Legislature.

The lawmakers' lawyer proposed "obliterated" as an alternative.

The mayhem — or at least the hyperbole — seems likely to continue. The high court has agreed to resolve yet another case this fall in which the Legislature collides with an executive branch official, State Auditor Rebecca Otto.

The chief judge of the state Court of Appeals protested in his opinion on that case that there is little "distinction between the demolishing of a constitutional office and the dismantling of that office ... ."

All together now: "You say dismantled; I say demolished. You say defunded; I say abolished ... ."

That's pretty much what's been going on in St. Paul. Dayton's case, which has gotten the most attention, did in fact arise after Republican lawmakers passed a tricked-up tax bill the governor didn't like. They wrote it in such a way that had Dayton vetoed the legislation, funding for the Revenue (tax-collecting) Department would have dried up. Then the lawmakers adjourned — which got Dayton to thinking.

He came up with an underhanded counterpunch of his own. He signed all the bills that wrapped up the state budget but used his line-item veto to cut off funding for ... the House and Senate, which by then could do nothing about it. His lawyer described this sweetly as an "invitation" for the Legislature to renegotiate the tax bill.

The GOP sent its regrets, filed suit and won a lower ruling that Dayton's maneuver unconstitutionally violates the "separation of powers" doctrine by effectively abolishing, obliterating, or making the Legislature go poof — until it does the governor's bidding.

Soon the state Supreme Court will settle the question.

But then it will have to turn to the state auditor case, which is curiously similar. Here again, the Republican Legislature opposes a DFL executive-branch official, in a dispute over whether one branch of government can "dismantle" the other. And here again, shrewd ploys to gain advantage may have backfired.

Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, calls this "a too-clever-by-half attempt to escape the vagaries of general fund" politics. "Everybody likes to have a dedicated funding stream," he adds.

Until the stream dries up. Within a few years, Republicans were back in charge at the Legislature. They soon granted a wish long expressed by county governments — to have more flexibility to hire private-sector auditors to inspect their finances, in place of the state auditor, presumably hoping to save money.

Trouble is, this just happened to have another effect. Since the 2013 changes gave the auditor's office its very own dedicated funding stream but reduced its general-fund revenue, it is now dependent on the very fees the GOP Legislature has since exposed to wide-open competition.

Auditor Otto has sued, arguing that by imperiling her office's funding the Legislature violated ... the very same "separation of powers" doctrine GOP lawmakers invoke to protest Dayton's veto of their appropriations.

Otto lost at the Court of Appeals, but Chief Judge Ed Cleary made her argument clearly in his dissent: "Having rendered the OSA largely dependent on the dedicated fund," Cleary wrote, "the legislature [is now] undermining the primary source of funding for the OSA" likely leading to "a death spiral for the constitutional office."

If Dayton were to win a ruling that governors are free to starve the Legislature into submission, it's hard to believe he would be the last empire-builder to try it.

And with demolition-derby politics endorsed, appropriations for, say, the governor's office would likely be held hostage from now on — as a standing "invitation" to surrender to the Legislature's wishes.

In any case, if DFLer Dayton wins — if one branch of government can ax another — then it seems DFLer Otto must lose.

But if Dayton loses, and the separation of powers is preserved, the auditor might just survive.