Legal battle over budget veto rests with Supreme Court

ST. PAUL, Minn. (AP) - Gov. Mark Dayton and top Republican lawmakers took their legal battle to the state's highest court Monday, arguing before the Minnesota Supreme Court in a case that will determine whether the Legislature will receive its funding and could set major precedents surrounding the governor's authority.

It's the latest in the continuing fallout from the messy end to this year's legislative session. Dayton line-item vetoed the $130 million operating budget for the House and Senate while signing the rest of a $46 billion budget in May, in what was a bid to force lawmakers to reduce a $650 million tax bill and other measures.

But the Legislature sued, calling it a blatant violation of the separation of powers - and a lower court agreed, striking down the veto and restoring lawmakers' funding earlier this summer. Dayton appealed and put the squabble before the Supreme Court.

It was unclear when a ruling may come. But the court is tilted heavily in Dayton's favor: The Democratic governor has appointed four of its seven justices, and one of the three Republican appointees, Justice David Stras, has recused himself from the case.

"It's my hope in the end that they do the job they're supposed to," Republican Senate Majority Leader Paul Gazelka said after the hearing.

Monday's arguments took place in the Supreme Court's ornate chambers inside the Capitol, just down the hall from House and Senate floors and above the governor's office. The six justices barely allowed attorneys to introduce themselves before grilling both sides with questions about the ramifications of overturning the lower court's decision or allowing it to stand.

Dayton's attorney, Sam Hanson, called his line-item veto the most "surgical" option to extract concessions from top Republican lawmakers. Hanson said vetoing the full tax bill instead could have forced layoffs of 1,300 employees at the Department of Revenue due to a "poison pill" in that bill. Dayton has objected to several massive tax breaks in that bill, as well as provisions that changed teacher licensure and a ban on issuing driver's licenses to immigrants living in the state illegally.

"It was the least disruptive solution," Hanson said. "It was an invitation to come back and negotiate."

Chief Justice Lorie Skjerven Gildea quickly quipped: "How can one side come back to negotiate without funding?"

Doug Kelley, the attorney for the Legislature, called Dayton's action an improper use of the line-item veto that would effectively abolish the Legislature. But several justices prodded Kelley on whether lawmakers should have stuck around the Capitol rather than adjourn soon after passing the final budget, giving them an option to renegotiate the bills or override Dayton's veto.

And at least two Dayton appointees questioned whether the so-called poison pill was wise.

"This situation is a little bit of the Legislature's own making, isn't it?" asked Justice Natalie Hudson.