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Minnesota Supreme Court declines to order state legislature funding

Nov 16 (Reuters) - Minnesota Governor Mark Dayton's line-item veto of money for the state legislature earlier this year was constitutional and courts lack the power to order funding, according to a ruling released on Thursday.

The Minnesota Supreme Court ruled that "although the constitution does not allow the judiciary to order funding for the legislative branch in the absence of an appropriation, the record establishes that the legislature has funding to sustain it until it reconvenes in regular session."

Leaders of the Republican-controlled legislature have warned that their chambers would run out of money before the new legislative session begins on Feb. 20, forcing them to shut down operations. On Thursday, the Legislative Coordinating Commission approved a plan giving the legislature access to about $20 million to keep operations going longer.

"It's important that the legislative branch has equal power with the governor and, under this situation, we don't," Senate Majority Leader Paul Gazelka told reporters following the state Supreme Court's move.

Dayton, a Democrat, said in a statement that the court's determination that the legislature has at least $26 million to fund operations underscores "there was no need for them to have initiated this lawsuit and imposed its costs on our state."

"So it is time for us all to agree that this dispute has been concluded and resume working together for the best interests of Minnesota," he said.

Dayton in May vetoed money for the legislature from the state's new two-year budget in an effort to pressure lawmakers to revise tax measures that he said will harm Minnesota's financial stability. The move touched off a legal battle with lawmakers, who claimed the elimination of nearly $130 million in funding was unconstitutional.

A Ramsey County District Court judge sided with legislators in July, and the dispute went to the Minnesota Supreme Court, which raised concerns over the ability of the legislature to survive without funding. The high court ordered the two sides into mediation, which ended in an impasse in September.

S&P Global Ratings said this week that it will be reviewing the funding situation and the impact on the state's overall credit profile. It also said it assumes the state will continue to make payments related to $80.1 million of certificates of participation issued in 2014 for a Senate office facility.

House Speaker Kurt Daudt told reporters that any impairment of the state's credit rating would be on Dayton's shoulders due to his veto action. (Reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)