The Minnesota Court of Appeals upheld a decision by Gov. Tim Pawlenty to use funds for Iron Range development to make up for last year's budget shortfall.
The suit, brought by legislators, taxpayers and towns from the Iron Range, argued that the administration's decision to take $49 million from the economic development account violated a 2002 law regarding the redirection of funds, or "unallotment," when the state faces a deficit. Claimants argued that the governor had no right to dip into it because the fund is separate from the state treasury.
The account, which was intended to promote business and education in the Iron Range, now holds about $10.6 million after the removal of funds.
The court held the governor's action legal; however, it affirmed the right of the Iron Range Association of Municipalities and Schools to sue over the issue. Plaintiffs said they would likely appeal to the Minnesota Supreme Court.
—Joe Mahon
