ST. PAUL, Minn. — The Minnesota Supreme Court on Thursday upheld Gov. Mark Dayton’s line-item veto of the Legislature’s operating budget, declining to referee a political dispute between two co-equal branches of government that it said could resolve the issue themselves.

The 5-1 decision handed the Democratic governor a major legal victory as he seeks to roll back Republican-backed tax breaks and other measures he opposed but signed into law anyway this spring as part of a new state budget. And it left the Legislature on uncertain financial footing. Dayton welcomed the ruling while GOP lawmakers expressed dismay.

The ruling overturned a lower court decision that deemed Dayton’s action unconstitutional. But the high court said the state constitution does not allow the courts to order funding for the Legislature without an appropriation. And it said the Legislature has the authority to tap enough money to continue operating — at least $26 million and up to $40 million — until it reconvenes Feb. 20. So it rejected the argument that Dayton violated the constitution by effectively abolishing the Legislature.

“We conclude in these unprecedented circumstances that proper respect for our coordinate branches counsels judicial restraint,” Chief Justice Lorie Skjerven Gildea wrote for the majority.

Associate Justice G. Barry Anderson dissented, writing “this is not the occasion for judicial restraint.” He said he believed Dayton’s line-item vetoes were unconstitutional violations of the separation of powers between the executive and legislative branches, and that failing to act “permanently tilts the balance of power in favor of the Executive.”

Associate Justice David Stras did not participate.

The ruling puts to rest a nearly six-month legal battle that poisoned relationships between the Democratic governor and top Republican leaders — while leaving the state’s new budget that Dayton sought to rework untouched. But the political battle isn’t settled at all.

Dayton said it’s time for all sides to agree the dispute over his veto authority is settled and “resume working together for the best interests of Minnesota.” He said there was no need for GOP legislative leaders to sue him and impose the costs of their lawsuit on taxpayers.

But Republican leaders said the Supreme Court should have taken their side. Senate Majority Leader Paul Gazelka said he was “shocked” and that the high court didn’t recognize the difficult situation facing the Legislature as its money runs low.

Democratic House Minority Leader Melissa Hortman said the governor and Legislature need to return to the bargaining table as soon as possible.

If they don’t remedy the “toxic” political environment, Democratic Senate Minority Leader Tom Bakk warned, the upcoming legislative session will be “the biggest do-nothing session we’ve ever seen.”

Dayton zeroed out the Legislature’s $130 million operating budget while signing the rest of a roughly $46 billion, two-year budget in late May — a last-ditch bid to force lawmakers to scale back several expensive tax breaks like a cut for wealthy estates and freezing the state’s cigarette taxes. Dayton also wanted Republican leaders to retool changes to how teachers are licensed and remove a duplicative rule-making ban on issuing driver’s licenses to immigrants living in Minnesota illegally.

But top Republicans were steadfast in refusing to change the new budget and sued Dayton instead.

The Legislature took steps just before the ruling came down to free up enough money to continue paying its members and staff, but warned that funds may still run out in early 2018. Both the House and Senate had halted out-of-state travel, member per-diem payments and other expenses to stretch out their funding.

Taxpayers will pay heavily for the fruitless legal battle, fought by high-powered lawyers billing more than $300 hourly. As of Oct. 13, Dayton’s legal fees totaled nearly $330,000. But the Legislature’s legal fees are a massive question mark. Its legal team will soon collect a lump-sum payment for the entire lawsuit.


Karnowski reported from Minneapolis.