Fear of reprisal tempers suits over budget cuts

Hospitals, cities, schools and social agencies all have a stake in the outcome of a legal fight over Gov. Tim Pawlenty's power to cut their budgets.

But whether they join the battle depends on a variety of considerations, including one intangible: fear of reprisal.

Organizations and government agencies that depend on state money are mindful that they could win a court battle over Pawlenty's unconventional budget cuts, but suffer more conventional cuts by the governor later.

"I could certainly understand why institutions or organizations would be reluctant to sue the governor because of concerns regarding retaliation in the future," said Dr. Michael Belzer, the medical director of Hennepin County Medical Center, which was hurt by cuts in subsidized care.

"There's always that possibility in the political realm that, I suppose, you could be penalized for acting," said Gary Carlson, a lobbyist for the League of Minnesota Cities.

Pawlenty spokesman Brian McClung said Wednesday that there would be no such retaliation.

"If we cut anybody's budget or funding, it won't be in retaliation for a lawsuit," McClung said. "It will be because Governor Pawlenty is fighting to force government to live within its means."

Carlson said a bigger concern is that a series of suits that succeeded in nullifying Pawlenty's budget cuts could become merely symbolic victories. Because restoring Pawlenty's cuts, known as unallotments, might swell the projected budget deficit from $1.2 billion to $3.9 billion, creating pressure for even more cuts in the near future.

"And we're right back where we were and we've spent hundreds of thousands of dollars in litigation," Carlson said.

More suits possible

Organizations began assessing strategy after Ramsey County District Judge Kathleen Gearin ruled last week that Pawlenty overstepped his authority last year when he cut $2.7 billion on his own after the Legislature had adjourned.

The case involved a suit filed by recipients of a $5.3 million nutrition program for impoverished Minnesotans, but the ruling has potentially wider consequences.

Gearin said the unallotment law is intended to allow a governor to cut the budget when faced with an unanticipated emergency, not the expected shortfall Pawlenty faced in 2009.

Carlson said the recent disclosure of a projected $1.2 billion deficit could give Pawlenty the power under Gearin's ruling to unallot soon. That could make cities more vulnerable.

"The governor's not signing tax increases," said Carlson. "It's going to mean deep cuts throughout the state budget and probably deep cuts for cities and counties."

League of Minnesota Cities officials will meet this month to discuss a possible suit.

Pawlenty's $2.7 billion in unallotments included $1.8 billion in delayed state aid to school districts. Instead of challenging the deferral, Minnesota School Boards Association executive director Bob Meeks said his organization decided a better strategy was to support Pawlenty's push to get the Legislature to ratify them.

"We look at this as a loan ... our helping balance the budget," Meeks said. "And now we would like to get it into law as to how they're going to pay it back."

Hennepin County Medical Center has also decided against filing suit, concluding that it lacks legal standing because the cuts directly affect patients denied subsidized care.

HCMC feared reprisal

Belzer said HCMC was concerned about retaliation when it first considered suing after Pawlenty made the cuts.

"It was certainly part of a discussion ... when the initial idea of taking legal action against the governor for the unallotment was discussed," Belzer said. "We just decided not to do it, and that weighed in the equation."

"It occurred to us," he said of possible retaliation. "So I assume, human nature being human nature, it would occur to other people."

While the unallotments cost HCMC money for subsidized health care, it lost far more funding last year from Pawlenty's conventional line-item.

Others apparently are still considering following the lead of six nutrition program recipients who brought the lawsuit.

"There are a number of governments and organizations that are looking very carefully at joining the Legal Aid lawsuit in which unallotment was ruled to be illegal," said Minneapolis attorney David Lillehaug.

"I have counseled organizations on unallotment," he said, "and the intensity of those inquiries has racheted up in the aftermath of the district court decision."

Pat Doyle • 651-222-1210