CHICAGO — A Minnesota judge last week ruled that budget cuts ordered by Gov. Tim Pawlenty last summer were unconstitutional — a ruling that could have a big impact on the state’s current $57 billion budget and on how lawmakers tackle a fresh $1.2 billion deficit heading into 2010.

Ramsey County District Court Judge Kathleen Gearin last week issued a temporary restraining order against enforcing Pawlenty’s budget cuts — also called unallotments — and ordered that the state restore $5.3 million in funding to a small state nutrition program that provides cash grants to elderly and disabled Minnesotans to help them with special dietary needs.

“The court’s decision was based on the way he unalloted, not what he unalloted,” Gearin wrote in her ruling. “The governor crossed the line between legitimate exercise of his authority to unallot and interference with the legislative power to make laws.” 

In a press conference held Thursday morning, Pawlenty said he would appeal the ruling to the state Supreme Court or Appeals Court.

He added that he “respectively disagreed” with Gearin and that she had “inserted herself into the middle of a political dispute.”

The ruling immediately affects only the nutrition program, but opens the door to a challenge to all $2.7 billion in cuts imposed by Pawlenty last summer to balance the state’s two-year $57 billion budget and impact how lawmakers tackle a $1.2 billion deficit in 2010.

Pawlenty, a Republican, and the Democratic-controlled Legislature last year tried for months to agree on how to eliminate an estimated $4.6 billion shortfall in order to craft a final $57 billion, two-year budget by the start of the state’s fiscal year on July 1. 

But Pawlenty and lawmakers were unable to reach an agreement before a mandated adjournment date for the Legislature in mid-May.

In June he ordered $2.7 billion of cuts to balance the budget. The action made good on his pledge to balance the budget on his own, using his statutory unallotment power.

Gearin noted that a 2004 court ruling established the constitutionality of the governor’s unallotment authority and that earlier unallotments remained unchallenged.

“It was the specific manner in which the governor exercised his unallotment authority [in 2009] that trod upon the constitutional power of the Legislature, and the Legislature alone, to make laws that, in the court’s opinion, was unconstitutional,” Gearin wrote.

“The authority of the governor to unallot is an authority intended to save the state in times of a previously unforeseen budget crisis; it is not meant to be used as a weapon by the executive branch to break a stalemate in budget negotiations with the Legislature or to rewrite the appropriations bill.”

In a statement, Democratic Speaker of the House Margaret Anderson Kelliher said: “This is an important case about the separation of powers in state government. The legislative and executive branches of government need to be equal partners in addressing Minnesota’s budget crisis.”

Another hearing on the matter is scheduled for March 1.

Pawlenty’s budget-balancing plan cut $300 million in local government aid and $110 million in state aid late last year to deal with a budget shortfall for fiscal 2009.

 He cut $236 million in health and human services programs and $100 million from higher education aid. He also moved to have the state defer $1.8 billion in payments owed to primary and secondary public schools.

Minnesota has $4.65 billion of outstanding GOs that are rated Aa1 by Moody’s Investors Service and AAA by Fitch Ratings and Standard & Poor’s, although Fitch assigns a negative ­outlook.

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