Perhaps here is why many people thought that unallotment was an empty threat! Balancing the budget through unallotment would violate the rules under which federal dollars match state dollars, resulting in loss of federal matching dollars beyond the unallotment. In this case that meant $72 million of lost federal funding beyond the unallotment.
The amount of $72 million comes from Commissioner Hanson's letter. Check out the copy of MN Government letter from Hanson. An short excerpt is highlighted here from Appendix A.
All Republican Governor Pawlenty had to do was come to the bargaining table and give up something to reach a better overall outcome to keep that $72 Million in federal matching funds. I guess what was best for Minnesota would not have made a good sound bite in Pawlenty's 2012 campaign speeches!
