In Part 1, I described how the Executive Branch has a decided advantage in budget timing and development over the Legislature. (See post from October 18, 2012) The Legislature is not, however, without advantages of its own in the back-and-forth dance of passing a biennial budget.

The Legislature’s biggest advantage is the most obvious. Article XI, Section 1 of the Minnesota State Constitution says, “No money shall be paid out of the treasury of this state except in the pursuance of an appropriation by law.” In other words, the Governor cannot spend any money unless it is approved by legislation passed by the House and Senate.

The House and Senate have, over the years, utilized this power as negotiating leverage with the

Governor. When a Governor opposes a specific item or items in an appropriation bill, the Legislature can refuse to pass the bill or pass the bill with the offending items included. The Governor then has the choice of vetoing the whole bill over the offending provision or signing the bill despite opposition to the provision. The usual outcome of this scenario is a give-and-take negotiating process between the Governor and key legislators.

The most recent high profile example of the Legislature using this power was the 2011 budget showdown between the Republican Legislature and DFL Governor Mark Dayton. The Legislature wanted a budget that did not raise taxes while the Governor wanted to raise taxes to support additional spending. The result was a government shutdown followed by a negotiated settlement. The Governor received much of the spending he advocated (except the level) and the Legislature got a budget that did not raise state taxes.

The Legislature’s second advantage can be found in Minnesota Statutes 16A.11, Subdivision 1 which directs the Governor to submit a budget to the Legislature before the “fourth Tuesday in January” in the odd-numbered year. With this deadline, the Governor is always forced to produce a budget before the Legislature and even before the February Economic Forecast yields the budget surplus or deficit number.

With the Governor’s budget announced first, the Legislature has the luxury of holding a couple of months of public hearings to determine which proposals are popular or unpopular and which ones will work or not work. During this time, particularly when there is a deficit, the Governor will absorb criticism for his proposals which will likely include some unpopular revenue increases, spending reductions, or both. The Legislature can use this process to jettison the most unpopular of the Governor’s proposals and look good in the process, particularly if the subsequent February Economic Forecast reduces the deficit.

The Executive and Legislative Branch differences in the budget development process are more pronounced when their occupants are controlled by different political parties. The 2013 Legislative Session will be the first time since the Governor Rudy Perpich Administration that one party has been in control of the Legislature and the Governor’s Office. It will be interesting to see how the ebb and flow of budget-making will be impacted in the months to come.