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Minneapolis, MN, June 25, 2009 -- Bob Carney Jr., editor, publisher and owner of www.republicancontract.com, and Minnesota Republican activist, called on Minnesota Governor Tim Pawlenty yesterday, to ask him to reverse his announced decision to unallot the Minnesota Political Contribution Refund.  The Governor was not in his office when Mr. Carney visited.  Mr. Carney left with the Governor's receptionist: a two page letter, two enclosures, and gifts (his recent book; a documentary excerpts dvd; "A Minnesota Republican State Legislator's Contract With Voters" coffee mug).  

The Minnesota Political Contribution Refund program provides individual Minnesota taxpayers annual refunds of up to a $50 per person ($100 per couple) for contributions to eligible state political campaigns and political organizations. According to a June 23rd Star Tribune article: "It is the only such dollar-for-dollar refund program in the country."

"Governor Pawlenty is being challenged, and threatened with lawsuits, by many individuals and organizations, for the unprecedented scope and timing of his attempt to use unallotment provisions of Minnesota law to balance the state's budget for the new biennium, commencing July 1, 2009," Carney said. "However, aside from all the general and constitutional arguments against what Governor Pawlenty is attempting to do -- and they are powerful arguments -- we need to recognize the Political Contribution Refund is a tax refund -- something fundamentally different from the other unallocation targets," Carney added.

Carney addressed these points in his letter to Governor Pawlenty:

Standing to sue -- Because government programs typically affect everyone, and the amount each taxpayer contributes for any program is insignificant, courts typically hold that individual citizens lack legal standing to sue governments over questions of tax and spending policy.  "But this is not true for the Political Contribution Refund program," Carney said.  "If I meet the conditions of the program, the $50 rebate is my money. I have a right to sue if anyone illegally tries to seize it."  Carney met for an hour on June 23rd with the head of a major Twin Cities law firm that specializes in class action lawsuits.  "This attorney is checking for conflicts within his firm, and studying how the firm will be paid if an injunction is obtained.  Other than these issues, he accepts my theory on legal standing, and we're good to go with a class action lawsuit if Governor Pawlenty does not unequivocally commit himself, and his administration, to not attempt to unallocate any funds that are taxpayer refunds," Carney added.

A dangerous precedent -- In Minnesota state law, tax refunds are privileged in many ways, and these privileges appear to extend to prohibiting the unallocation process from being used to seize, or delay, tax refunds.  In his letter to the Governor, Carney stated: "Suppose for the sake of argument you do succeed in unalloting the campaign contribution refund.  What is to prevent a future Governor from seizing everyone’s property tax refund?  Or all tax refunds of all kinds?  Or selected tax refund percentages -- based on income?  Note the language of the unallotment statute: '…the commissioner may consider other sources of revenue available to recipients of state appropriations and may apply allotment reductions based on all sources of revenue available.'  How would any tax refund unallottment scheme -- including decisions to proportionately unallot tax refunds based on income -- be different in principle from what you are proposing to do with respect to the campaign contribution refund?  Is this a precedent you want to establish?"

A call for reconsideration and an offer of support -- Carney recommended in his letter to Governor Pawlenty: "... you should do the right thing: state unequivocally that under no circumstances will you attempt to apply unallotment to the campaign contribution refunds due to Minnesota taxpayers according to law, and more generally, to any refund due to any Minnesota taxpayer according to law.  I would be happy to meet with you, and/or your staff, to discuss this issue further.  I would be happy to appear with you at a news conference where you announced you will not unallot the campaign contribution refund.  At such a conference, I would be prepared explain the reasoning I am presenting to you.  I would thank you for recognizing the way in which taxpayer refunds are fundamentally different from all other appropriations, and I would applaud you for your decision to place all taxpayer refunds off limits from unallotment.  After all, consider this: isn’t any unallotment of a taxpayer refund fundamentally equivalent in effect to a tax increase?"  

Danger of a class action lawsuit -- Carney wrote to Governor Pawlenty as follows: "I have to tell you that if you don’t place all taxpayer refunds off limits from unallotment, I feel I will have no choice but to proceed with a class action lawsuit, and to seek an injunction against what you are proposing to do with respect to the campaign contribution refund...  I think such a cost would be unfortunate (the attorney I’m talking with sees this a little differently), but in my view it would be better for Minnesota to bear that cost now, than to have a precedent by which future Governors might claim a general power to unallot any and all taxpayer refunds, according to whatever scheme a future Governor might deem to be reasonable."

Additional information --

A copy of Carney's letter to Governor Pawlenty, and two enclosures, will be available at www.republicancontract.com by noon June 25th, 2009.